EXHIBIT 10(cc)
SERVICES AGREEMENT
This Services Agreement ("Agreement") is entered into this _____ day of
July, 1997 (the "Effective Date") between Computerized Thermal Imaging, Inc.,
a Nevada corporation ("CTI") and Liberty Capital Group, Inc., a Washington
corporation ("Consultant").
W I T N E S S T H:
WHEREAS, CTI desires to have the Consultant act as an independent agent
for the purpose of providing certain services to CTI; and
WHEREAS, Consultant is qualified and willing to provide such services
pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and other consideration,
the sufficiency of which is hereby acknowledged, the parties do hereby covenant
and agree as follows:
1. SCOPE. CTI hereby engages and retains the Consultant as an independent
contractors to provide the services set forth herein. The Consultant
hereby agrees to provide all reasonable and necessary services associated
with the following: (i) the development of a comprehensive business plan;
(ii) future acquisition strategies; and (iii) any other ancillary services
relating to the aforementioned (collectively, the "Services"). The parties
acknowledge that none of the Services shall involve the performance of
capital development or fund-raising services.
2. REPRESENTATIONS. Consultant hereby agrees to use its best efforts in
providing the Services and loyally representing the interests of CTI in
accordance with CTI's reasonable requirements and objectives. Consultant
and CTI acknowledge that Consultant is experienced in providing the
Services and will provide such Services with the diligence and care of
others in the industry. Consultant further represents that it has not, and
shall not, enter into any agreement during the term of this Agreement which
might prevent it from performing its obligations hereunder.
3. FEES AND EXPENSES. In full consideration of the Services provided
hereunder, CTI hereby grants to Consultant options (the "Options") to
purchase all or any portion of 300,000 shares of common stock of the
Company (the "Shares") at a purchase price equal to $0.60 per Share (the
"Exercise Price") in accordance with the provisions below.
4. AMOUNT AND DATES EXERCISABLE. The Options may be exercised in whole or in
part by Consultant based on the following schedule:
(a) The Options for up to 100,000 Shares shall become exercisable on or
after the first date, following the effective date, that the "Stock
Price" (defined as the Low Bid Price for the Company's common stock
over three consecutive business days) reaches a level of $2.00 per
share;
(b) The Options for up to an additional 100,000 Shares shall become
exercisable on or after the first date thereafter that the Stock Price
reaches a level of $3.00 per share; and
(c) The Options for up to an additional 100,000 Shares shall become
exercisable on or after the first date thereafter that the Stock Price
reaches a level of $5.00 per share.
(d) In the event, CTI terminates this Agreement for "cause" (defined as
the breach of any covenant of this Agreement by Consultant and/or
Consultant's negligence or failure to perform services in accordance
with reasonable industry standards) then (i) any Options that are
exercisable as of the date of such termination shall be deemed earned
by Consultant, surviving termination and exercisable on or before
three (3) years after the effective date, and (ii) any Options that
are not yet
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exercisable as of the date of such termination of employment will
terminate automatically without notice and be of no further force or
effect.
(e) Notwithstanding anything in this Agreement to the contrary, the
Options will terminate automatically without notice and be of no
further force or effect to the extent the Options are not yet
exercised within three (3) years after the effective date.
5. EXERCISE OF OPTIONS. The Options may be exercised on one or more
occasions, but can only be exercised for whole Shares. The Options shall
be exercised by Consultant by delivering to the Company (i) written
notification that any or all of the Options are exercisable, including
evidence reasonably satisfactory to the Company to that effect, (ii) the
cash required to pay in full an amount equal to the total Exercise Price
for the number of Shares so exercised. Then, the Company shall deliver to
Consultant certificate(s) for said Shares (collectively, the "Option
Shares"). Consultant shall execute such documents and instruments as
requested by counsel of the Company to satisfy securities laws or evidence
the issuance and receipt and performance for the Option Shares, including
acknowledgment of all investor representations deemed necessary by Company
counsel.
6. TRANSFERABILITY OF OPTIONS. Except as herein set forth, the Options shall
not be transferable by Consultant and shall be exercisable only by
Consultant.
7. REQUIREMENTS OF LAW.
(a) COMPLIANCE WITH LAWS. The Company shall not be required to sell or
issue any Option Shares under this Agreement if the issuance of such
Option Shares shall constitute a violation by Consultant or the
Company of any provisions of any law or regulation of any governmental
authority. The Company represents that this Agreement does not
violate its by-laws. The Company shall not be obligated to take any
affirmative action other than that which is specifically set forth in
this Section 5 in order to cause the exercise of the Options or the
issuance of Option Shares pursuant hereto to comply with any law or
regulation of any governmental authority.
(b) FEDERAL AND STATE SECURITIES LAWS. Upon exercise of the Options,
unless a registration statement under the Securities Act of 1933, as
amended (the "'33 Act"), is in effect with respect to the Option
Shares covered hereby, the Company shall not be required to issue such
Option Shares unless the Company has received evidence reasonably
satisfactory to it that such issuance is exempt from registration
under the '33 Act and all applicable state securities laws. The
Company shall be obligated to register the Option Shares, if permitted
by applicable state securities laws. Unless registered or exempt from
restriction, the certificate(s) issued representing the Option Shares
shall bear a legend in substantially the following form:
The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under the securities laws of any state and may not be sold
or transferred except upon such registration or upon receipt
by the Company of an opinion of counsel reasonably
satisfactory to the Company that registration is not
required for such sale or transfer.
(c) OBLIGATION TO REGISTER SHARES. If an event has occurred which would
permit the Consultant to exercise the Options and purchase the Shares,
the Consultant has the right to demand registration of the Shares when
issued. In addition, if Option Shares have been exercised but not
yet registered, the Consultant shall have piggy back registration
rights to require the Shares which have been issued be registered in
the event the Company is filing any other registration statement to
register any other shares of stock of the Company.
(d) INVESTMENT INTENT. Consultant hereby represents and warrants that the
Options and Option Shares are being acquired solely for the account of
Consultant for investment purposes only and not with a view to or for
the resale, distribution, subdivision, or fractionalization thereof;
Consultant has no
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contract, understanding, undertaking, agreement, or arrangement
with any person to sell, transfer or pledge to any person the
Options or Option Shares or any part thereof; Consultant has no
present plans to enter into any such contract, undertaking,
agreement or arrangement; Consultant understands the legal
consequences of the foregoing representations and warranties to
mean that Consultant must bear the economic risk of the investment
in the Option Shares for an indefinite period of time; Consultant
has such knowledge and experience in financial and business
matters that Consultant is capable of evaluating the merits and
risks of acquiring the Option Shares; and Consultant acknowledges
that the acquisition of the Option Shares involves a HIGH degree
of risk that may result in the loss of the total amount of
Consultant's investment in the Options and Option Shares.
(e) DUE DILIGENCE. Consultant acknowledges that it has for a reasonable
amount of time had an opportunity to ask questions and receive answers
concerning the terms and conditions of the issuance of the Options and
Option Shares and the actual and proposed business and affairs of the
Company, and is satisfied with the results thereof, and been given
access, if requested, to all documents with respect to the Company or
this transaction, as well as to such other information that Consultant
has requested to evaluate an investment in the Options and Option
Shares. Consultant has made its own determination of the value of the
Options and has not received or relied upon any statements,
representations, or warranties of the Company or its agents or
representatives.
8. NO RIGHTS AS SHAREHOLDER. Consultant shall have no rights as a shareholder
of the Company with respect to the Option Shares until the date of issuance
of a certificate for such Option Shares; no adjustment for distributions,
or otherwise, shall be made if the record date therefor is prior to the
date of issuance of such certificate.
9. CHANGES IN THE COMPANY'S STRUCTURE.
(a) CHANGES IN STRUCTURE. The existence of the Options shall not affect
in any way the right or power of the Company, directors, or its
shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, or any other security
or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or
otherwise.
(b) CHANGES IN NUMBER OF SHARES. If, while the Options are outstanding,
the Company shall effect a subdivision or consolidation of Shares or
other capital readjustment, the payment of a Share dividend, or other
increase or reduction of the number of Shares outstanding, without
receiving compensation therefor in money, services, or property, then
(i) in the event of such an increase in the number of Shares
outstanding, the number of Option Shares then subject to the Options
shall be proportionately increased, and the Exercise Prices shall be
proportionately reduced and (ii) in the event of such a reduction in
the number of Shares outstanding, the number of Option Shares then
subject to the Options shall be proportionately reduced, and the
Exercise Prices shall be proportionately increased.
(c) CHANGES IN CORPORATE STRUCTURE. After a merger of one or more
corporations into the Company or after a consolidation of the Company
and one or more corporations in which the Company shall be the
surviving corporation, Consultant shall, at no additional cost, be
entitled upon exercise of the Options to receive (subject to any
required action by shareholders) in lieu of the number of Option
Shares as to which the Options shall then be so exercisable, the
number and class of shares or other securities to which Consultant
would have been entitled pursuant to the terms of the agreement of
merger or consolidation if, immediately prior to such merger or
consolidation, Consultant had been the holder of record of a number of
Shares equal to the number of Option Shares as to which the Options
shall be so exercised. In the event the Company agrees to be merged
with or consolidated
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into one or more corporations or other entities in which the
Company shall not be the surviving entity then, the Company shall,
prior to such merger or consolidation, obtain the full and
unconditional agreement of such surviving entity to assume all of
the obligations of the Company under this Agreement.
(d) ISSUANCE OF SHARES. Except as hereinbefore expressly provided, the
issuance by the Company of shares of any class, or securities
convertible into shares of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares
or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of the Shares then
subject to the Options.
10. EXPENSES. All expenses, including travel and lodging, incurred by the
Consultant in the performance of Services shall be the sole responsibility
of the Consultant, unless otherwise agreed in writing. During the
continuance of this Agreement, Consultant shall certify as regular and
guarantee Consultant's situation towards all relevant tax authorities,
social administrations and professional organizations, if applicable, as
being in conformity with Consultant's status as an independent contractor.
11. CONFIDENTIAL INFORMATION. During the term of consultation with CTI, the
Consultant will have access to and become acquainted with sensitive and
confidential information regarding CTI and its business. Consultant
acknowledges that the confidential information has been developed or
acquired by CTI through the expenditure of substantial time, effort and
money and serves to provide CTI with an advantage over it competitors.
Consultant hereby agrees that such confidential information may not be
disclosed to third parties unless otherwise agreed to in writing by CTI.
The Consultant further agrees not to use any information made available to
or coming into its possession or knowledge in a manner that is adverse to
the business of CTI. This provision shall survive the termination of this
Agreement.
12. LIMITATION OF LIABILITY. CTI hereby agrees to indemnify, defend and hold
harmless Consultant for any and all claims, causes of action, penalties,
fines, settlements, and judgements against Consultant which arise out of or
relate to the Consultant's performance of Services, with the exception of
any gross negligence or willful misconduct of Consultant.
13. DURATION. This Agreement shall remain in effect for a period of one (1)
year commencing on the Effective Date, unless it appears from the context
of a provision that it is intended to survive the termination of this
Agreement. CTI may terminate this Agreement for "cause" by providing five
(5) days written notice to the other party.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach, termination, or validity thereof, shall be
settled by final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA Rules") in
effect as of the effective date of this Agreement. The American Arbitration
Association ("AAA") shall be responsible for (i) appointing a sole
arbitrator, and (ii) administering the case in accordance with the AAA
Rules. This Agreement and all other documents executed pursuant hereto
shall be governed by and construed in accordance with the substantive laws
of the State of Washington, without regard to any conflicts of laws
principles thereof. The situs of the arbitration shall be Seattle,
Washington. Any order or judgement rendered by the arbitrator may be
entered by any court having jurisdiction.
15. ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
upon the parties, their respective successors and permitted assigns. This
Agreement may not be assigned by any party without the prior written
consent of the other parties.
16. HEADINGS. Headings used in this Agreement are used for convenience only and
do not constitute substantive matters to be considered in construing the
terms of this Agreement.
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17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter thereof and
supersedes all documents, verbal consents, or understandings made before
the conclusion of this Agreement. The terms of this Agreement may be
amended or modified only by written agreement signed by all of the parties
hereto. All changes, supplements or amendments to this Agreement will be
valid only when agreed upon by the parties and made in writing.
18. NOTICES. Any notices or consents required or permitted by this Agreement
shall be in writing and shall be deemed to have been sufficiently given if
delivered in person, or if sent by certified mail, return receipt
requested, or telexed or telefaxed to the party entitled thereto with
confirmation of transmission, addressed as set forth on the signature pages
hereto, unless such address is changed by written notice hereunder. If so
mailed the same shall not be deemed effective until three (3) business days
after posting.
19. WAIVERS. No waiver of any term or condition of this Agreement shall be
valid except by an instrument in writing expressly waiving such term or
condition signed by the waiving party. A waiver by any party of any term
or condition of this Agreement in any one instance shall not be deemed or
construed as a waiver of such term or condition for any similar instance in
the future or of any subsequent breach hereof. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall
be cumulative and none of them shall be a limitation of any other remedy,
right undertaking, obligation or agreement of either party.
20. SEVERABILITY. Should any part or provision of the Agreement be judicially
held to be unenforceable or in conflict with the law of any jurisdiction,
the validity of the remaining parts or provisions shall not be affected by
such holding and shall remain in full force and effect.
21. GENERAL ASSURANCES. The parties agree to execute, acknowledge, and deliver
all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of
this Agreement.
22. DUPLICATE ORIGINALS. This Agreement may be executed in one or more
counterparts, each of which shall be treated and deemed an original, but
all of which together shall constitute one and the same document.
23. CONSTRUCTION OF AGREEMENT. The parties hereto acknowledge and agree that
neither this Agreement nor any of the other documents executed in
connection herewith shall be construed more favorably in favor of one than
the other based upon which party drafted the sane, it being acknowledged
that all parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the documents executed in connection
herewith.
24. NO THIRD PARTY BENEFICIARIES. Except as otherwise expressly forth in this
Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
25. RELATIONSHIP OF PARTIES. Consultant is providing services on an
independent contractor basis. Notwithstanding anything to the contrary
herein, this agreement shall not in any manner be construed to create a
joint venture, partnership, agency or other similar form of relationship,
and neither party shall have the right or authority to: (i) commit the
other party to any obligation or transaction not expressly authorized by
such other party, or (ii) act or purport to act as agent or representative
of the other, except as expressly authorized in writing by such other
party.
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CTI:
COMPUTERIZED THERMAL IMAGING, INC.
ADDRESS:
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
(000) 000-0000 By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxx,
Chief Executive Officer
Dated: July 21, 1997
CONSULTANT:
LIBERTY CAPITAL GROUP, INC.
ADDRESS:
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
(000) 000-0000 Telecopier By: /s/ Xxx Xxxxx Xxxxx
--------------------------------------
Xxx Xxxxx Xxxxx
Title:
-------------------------------
Dated: July 20, 1997
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