Oak Tree Medical Systems, Inc.
0 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
December 20, 1996
Xx. Xxxxxxx X. Xxxxxxx
Gotham City Corporate Relations Group, Inc.
0000 000xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Dear Xx. Xxxxxxx:
This letter sets forth the terms and conditions upon which Gotham City Corporate
Relations Group, Inc. (the "Consultant") will act as a public relations
consultant to Oak Tree Medical Systems,Inc.
(the "Company").
1. Scope of Engagement. Consultant will act a public relations
advisor and consultant to the Company and, in such capacity,
will perform such public relations services as shall be
appropriate to acquaint the financial community with the
Company, its business and prospects.
2. Responsibilities and Services Provided. With respect
to the scope of assignment and at all times subject to
Section 7 hereof, Consultant will:
a. Familiarize itself with the business, operations,
management, financial condition, and future
prospects of the Company;
b. Meet and communicate concerning the Company with
brokers, dealers, financial advisors, publicists,
investors and other members of the financial
community;
c. Arrange meetings and other avenues of communica-
tion between the Company's executives and members
of the financial community; and
d. Advise the Company on the formulation, preparation
and delivery of its presentations to the financial
community.
3. Compensation to Consultant.
a. As compensation for Consultant's services not
later than sixty (60) business days following
execution of this Letter Agreement, the Company
will issue ten thousand (10,000) shares of its common
stock, par value $.01 (the "Stock"), to Consultant,
against the payment therefor of $100 in cash. Prior
to issuance the company will file a registration
statement of Form S-8 under the Securities Act of
1933, as amended with respect to the Stock.
Consultant represents and warrants that it will be
providing bona fide services, not in connection with
the offer or sale of securities in a capital raising
transaction, within the meaning of Rule 401 under the
Securities Act, as compensation for which the Stock
will be issued.
b. As additional compensation for Consultant's
services hereunder, not later than twenty (20)
business days following the date of execution of
this Letter Agreement by the Company, the Company
will issue 200,000 warrants (the "Warrants") to
Consultant exercisable for the purchase of up to
200,000 shares of the Company's common stock, par
value $.01 ("Common Stock"), in three (3)
tranches, upon the following terms:
(i) 66,667 of the Warrants shall be immediately
exercisable for one share of Common Stock at
an exercise price per share equal to $5.00;
these Warrants shall be exercisable until
January 1, 1998;
(ii) 66,667 of the Warrants shall be immediately
exercisable for one share of Common Stock at
an exercise price per share equal to $6.00;
these Warrants shall be exercisable until
January 1, 1998;
(iii) 66,667 of the Warrants shall be immediately
exercisable for one share of Common Stock at
an exercise price per share equal to $7.00;
these Warrants shall be exercisable until
January 1, 1998;
c. The Company agrees to include the shares of Common
Stock underlying the Warrants in its Registration
Statement on Form SB-2, which has heretofore been
filed with the Securities and Exchange Commission but
has not yet been declared effective.
4. Reimbursement of Expenses. The Company agrees to
reimburse Consultant on a monthly basis for all
reasonable out-of-pocket expenses which have been pre-
approved.
5. Terms of Engagement. The engagement of Consultant
pursuant to the terms of this Letter Agreement shall be
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effective commencing on the date hereof and shall continue
until December 31, 1997; provided, however, that the Company
may terminate this Letter Agreement at any time, for any
reason, by giving 15 days, prior written notice of such
termination to Consultant.
6. Confidentiality. Each of the parties agrees to keep
any information with respect to each other and this
agreement confidential and not make use thereof except
as may be required by applicable law or judicial
process. Each party will not be identified or referred
to in any public release or communication prepared by
either party or any of their affiliates or associates
without the other party's prior written consent.
7. Company's Obligations. The Company will continuously
and timely apprise Consultant of material matters
relevant to the Company's business.
The company recognizes, agrees and confirms that Consultant
(i) will be using and relying on information available from
the Company and generally recognized public sources (the
"information"), without having independently verified the
same, and; (ii) does not assume responsibility for the
accuracy of completeness of the information. The Company will,
in addition to any other duties of indemnification set forth
in this Letter Agreement, indemnify and hold Consultant
harmless for any claim, suit or judgment arising out of
Consultant's use of any information concerning the Company
furnished by the Company to the Consultant.
8. Limitation of Liability; indemnification. In performing its
services under this Agreement, neither Consultant nor any
officer, director, employee, shareholder, attorney, or agent
of Consultant will be liable to the Company or its creditors
for errors or judgment or for any other acts, except for acts
of negligence of Consultant.
Notwithstanding anything contained in this Letter Agreement,
in the event that Consultant incurs any liability or
obligations in connection with the performance of its services
under this Letter Agreement, the Company shall indemnify
Consultant for all of such liabilities, obligations, expenses,
or costs arising therefrom, including reasonable legal fees
incurred by Consultant, except for (i) actions of Consultant
which have not been authorized by the Company and (ii) acts of
negligence of Consultant.
9. Relationship of the Parties. Nothing in this Letter
Agreement shall be construed to place Consultant and
the Company in the relationship of partners or joint
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venturers. Neither Consultant nor the Company shall represent
itself as the agent or legal representative of the other for
any purpose whatsoever. Consultant, in performing its service
hereunder, shall at all times be an independent contractor.
10. Miscellaneous. Notwithstanding anything to the
contrary contained herein, the provisions concerning
confidentiality, indemnification and the Company's
obligations to reimburse expenses obtained herein shall
survive any expiration or termination of Letter
Agreement. The Letter Agreement may not be amended or
modified except in writing and shall be governed by and
construed in accordance with the laws of the State of
New York without reference to principles of conflicts
of law thereof.
If the foregoing conforms to your understanding, please sign, and date and
return to us the enclosed copy of this letter.
Very truly yours
OAK TREE MEDICAL SYSTEMS, INC.
---------------------------
Xxxxxxx Xxxxxxxx
Chief Executive Officer
The foregoing is in conformity with our understanding:
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Print Name:
Title:
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