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THIS CONTRACT IS SUBJECT TO ARBITRATION UNDER THE TEXAS
GENERAL ARBITRATION STATUTE
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POWER OF ATTORNEY
AND CONTINGENT FEE CONTRACT
This agreement is made between Client, SEDONA CORPORATION (including its
present, former, or successor directors or officers in their official capacity
for Sedona Corporation and Xxxxxx X. Xxxxx (referred to as "Client")) whose
address for all purposes is 0000 Xxxx 0xx Xxxxxx, 0xx xxxxx, Xxxx xx Xxxxxxx, XX
19406) and XXXXXX X. XXXXX, of the firm, Christian, Xxxxx & Jewel, L.L.P. (as
"Attorney"). This Agreement is binding on Client and any successor or assign and
any person or business that acquires or merges with Client. The Agreement is
further binding on Attorneys and any assign.
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
I. PURPOSE OF REPRESENTATION
1.01 Client believes that Client may have legal claims and/or causes of
action to recover damages and compensation pertaining to the financing
transaction entered into by Client Sedona Corporation ("Client's claims")
against some or all the following named entities and individuals and/or other
persons not yet known:
LADENBURG XXXXXXXX & CO., INC.
PERSHING LLC
WESTMINSTER SECURITIES CORPORATION
XX X. XXXXXXX & CO.
RHINO ADVISORS, INC.
MARKHAM HOLDINGS LIMITED
ASPEN INTERNATIONAL LTD.
THE CUTTYHUNK FUND LIMITED c/o OPTIMA FUND MANAGEMENT L.P.
THE XXXXXX X. XXXXX 1995 CHARITABLE REMAINDER TRUST
XXXXXX XXXXXX
XXXXXX XXXX
XXXXX XXXXX
XXXXXXX XXXXXXXXXXX
Client hereby retains and employs Attorneys to investigate whether Client has a
legal claim or cause of action relating to such matters, analyze and evaluate
the strengths of Client's legal claims and causes of action in question, gather
facts and legal research in connection with Client's legal claims and causes of
action in question, advise and assist
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Client in connection with the retention of X'Xxxxx, Xxxxxxxx & Xxxxxx, L.L.P.
(X'Xxxxx), and assist X'Xxxxx in the preparation and presentation of any
litigation relating to Client's legal claims and causes of action in question,
for which Client acknowledges that Attorneys will receive a portion of the fees
paid to such trial counsel directly from X'Xxxxx.
II. ATTORNEYS' FEES
2.01 In consideration of the services rendered and to be rendered to
Client by Attorneys, Client does hereby agree to pay the following fees to
Attorneys:
The sum of $25,000.00 simultaneously with the signature of
this agreement, for referring all due diligence in connection
with Clients Claims and paying all expenses in connection
therewith that Attorney's are obligated to pay, which amount
shall be deemed to be a fixed amount for all due diligence
services provided by the Attorneys prior to the retention of
X'Xxxxx (in addition to the $25,000.00 previously paid), and
The sum of $220,000.00 upon the earlier of the filing of the
complaint or the retention of X'Xxxxx which amount will be
deemed to be a fully-earned sum and compensation for the
completion of all services required by the Attorneys in
connection with the investigation, analysis, research, advice,
and reports compiled prior to such date, including Attorney
and\or X'Xxxxx paying expenses in connection with Client's
Claims. Such amount shall be paid as is set forth on Exhibit
"A" attached hereto.
III. ASSOCIATION OF OTHER ATTORNEYS
3.01 Attorneys may, at their own expense, use or associate other
attorneys in the representation of the aforesaid claims of the Client. Client
understands that Attorneys, are a limited liability partnership with a number of
attorneys. Various of those attorneys may work on Client's case, and Client
agrees that Xxxxx X. Xxxxxxxxx himself is not personally undertaking the
representation of Client by virtue of this contract. However, Xxxxx X. Xxxxxxxxx
shall be primarily responsible for prosecution and Client communications of the
case.
3.02 Client acknowledges that Attorneys will enter into a Fee Division
Agreement with X'Xxxxx and will receive some of the contingent fees that are
paid to such trial counsel as compensation for additional work performed by
Attorneys after such retention. In addition, Client acknowledges that Attorneys
may enter into fee division agreements with other attorneys licensed to practice
law in Texas or other jurisdictions in connection with the assignment to them of
specific areas or research or representation or other work to be performed by
such other attorneys. In this regard,
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once the X'Xxxxx Power of Attorney is executed by the Client, this Power of
Attorney and Contingency Fee Contract shall terminate with the exception of 3.01
of this agreement. Thereafter, Attorneys will perform services for Client based
upon the Fee Division Agreement with O'Quinn.
IV. TEXAS LAW TO APPLY
4.01 This Agreement shall be construed under and in accordance with the
laws of the State of Texas, and the rights, duties and obligations of Client and
of Attorneys regarding Attorneys' representation of Client and regarding
anything covered by this Agreement shall be governed by the laws of the State of
Texas.
V. ARBITRATION
5.01 Any and all disputes, controversies, claims or demands arising out
of or relating to (1) this Agreement or (2) any provision hereof or (3) the
providing of services by Attorneys to Client or (4) the relationship between
Attorneys and Client, whether in contract, at law or in equity, for damages or
any other relief, shall be resolved by binding arbitration pursuant to the
Federal Arbitration Act in accordance with the Commercial Arbitration Rules then
in effect with the American Arbitration Association unless such dispute is
caused from any fraudulent, unethical, or illegal acts by Attorneys or their
representatives or agents. Client shall not file a class action against
Attorneys or seek to assert any claim or demands against Attorneys by or through
a class action, either as the named plaintiff or as a member of the class, but
rather shall submit his/her claims or demands to binding arbitration pursuant to
the provisions of this Paragraph XI. Any such arbitration proceeding shall be
conducted in Xxxxxx County, Texas. This arbitration provision shall be
enforceable in either federal or state court in Xxxxxx County, Texas, pursuant
to the substantive federal laws established by the Federal Arbitration Act. Any
party to any award rendered in such arbitration proceeding may seek a judgment
upon the award and may be entered by any federal or state court in Xxxxxx
County, Texas, having jurisdiction.
VI. LITIGATION SUPPORT SERVICES
6.01 Client has advised Attorneys that Client has signed a contract
with LITIDEX(R) to provide Litigation Support Services and other services for
Client under the direction and as the representative of Attorney. All fees and
other charges due pursuant to the agreement entered into of even date between
LITIDEX(R) and Client relating to such litigation support and other services
provided by LITIDEX(R) will be paid by Client to LITIDEX(R) in connection with
the Client's case. Client acknowledges that payment of such services are
critical and necessary in order to prosecute Client's claims. Client shall be
reimbursed all expenses it has paid hereunder and to LITIDEX(R).
6.02 Client acknowledges that the Attorneys have not represented Client
or LITIDEX in connection with the contract between Client and LITIDEX(R) or the
fairness of the amount or types of services provided; or compensation paid
thereunder. Client
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acknowledges that it has been advised to seek the assistance of an independent
counsel in connection with such contract and has either relied on the advice of
other counsel or elected, in its sole discretion and without the advice of the
Attorneys, not to engage counsel in connection with such contract.
6.03 The Attorneys have not and will not receive any of the
compensation paid to LITIDEX(R) pursuant to the contract between Client and
LITIDEX(R) and will not be required to pay any amounts to LITIDEX(R) in
connection with the services provided by them.
VII. CONFLICTS OF INTEREST
7.01 The Attorneys have reviewed the list of potential defendants and
other persons that may have an interest adverse to the interest of the Client in
the Client's legal claims and Client's causes of action in question and is not
aware that any conflict of interest exists or may arise. In the event that any
such conflict arises or becomes known to the Attorneys, the Attorneys will
promptly notify the Client and determine the appropriate course of action,
including the resignation of the Attorneys from any matters in which a conflict
exists or may arise. However, Client acknowledges, that: (1) Attorneys and
X'Xxxxx represent ITIT Holdings, Inc. (the company of LITIDEX(R)) in related
litigation; and 2) Attorneys represent other plaintiffs in similar causes of
action against related and similar defendants. Accordingly, the amount available
to pay all plaintiffs may be limited. To the extent any of the above is a
conflict, Client waives and consents to such conflict.
VIII. BANKRUPTCY PROVISIONS
8.01 Client represents to Attorneys that he or she is not presently
filing, nor contemplating filing, for protection under the United States
Bankruptcy Code. Client agrees that in the event he or she files a petition in
bankruptcy, Attorneys will be promptly notified of any such event and that the
lawsuit or cause of action covered by this Power of Attorney and Contingent Fee
Contract will be properly scheduled as an asset by the Client in accordance with
the Bankruptcy Code and its rules of procedure. Because a bankruptcy filing by
Client could require Attorneys to engage special counsel or to otherwise perform
legal services in addition to those services for which Attorneys were retained
under this Power of Attorney and Contingent Fee Contract (e.g. special
retentions by Client or Trustee; issues relating to waiver of privilege and
assumption of executory contracts; application and payment of Attorney's fees
and approval of settlements; etc.), Client agrees that Attorneys shall be fully
reimbursed by Client, or reimbursed out of Client's share of the recovery for
the costs incurred for these extra services. Client agrees that any costs
incurred by Attorneys in connection with a bankruptcy proceeding will be paid
out of Client's share of the recovery. Client expressly consents to Attorneys
retaining such other special counsel and/or incurring such costs as reasonably
necessary to address additional matters in bankruptcy, as raised herein and such
retention shall be considered a cost to be deducted from Client's share of the
recovery.
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IX. PARTIES BOUND
9.01 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators, legal
representative, successors and assigns.
X. LEGAL CONSTRUCTION
10.01 In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provisions thereof and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision had never been contained
herein.
XI. PRIOR AGREEMENTS SUPERSEDED
11.01 This Agreement constitutes the sole and only Agreement of the
parties hereto and supersedes any prior understandings or written or oral
agreement between the parties respecting the within subject matter.
Signatures on Following Page
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I certify and acknowledge that I have had the opportunity to read this
Agreement. I further state that I have voluntarily entered into this Agreement
fully aware of its term and conditions.
Signed and accepted this ______ day of ______________, 2003.
_____________________________
Signature of Client
______________________________
Printed Name of Client
______________________________
______________________________
______________________________
______________________________
Address, Phone, Fax, Email
_______________________________
XXXXXX X. XXXXX
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THIS CONTRACT IS SUBJECT TO ARBITRATION
UNDER THE TEXAS GENERAL ARBITRATION STATUTE
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ACKNOWLEDGEMENT
STATE OF ___________ '
'
COUNTY OF ________ '
BEFORE ME, the undersigned Notary Public in and for said County and
State, on this day personally appeared ____________________________, whose
name[s] appears above and who is/are known to me as the person[s] whose names
are subscribed to the foregoing instrument as Client, and acknowledged to me
that the document was executed for the purposes and consideration therein
expressed.
GIVEN UNDER MY HAND and seal of office, this ____ day of _________, 2003.
_________________________
Notary Public in and for
the State of ____________
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EXHIBIT "A"
TO THE POWER OF ATTORNEY
AND ATTORNEY CONTINGENT FEE CONTRACT
BETWEEN
SEDONA CORPORATION
AND
XXXXXXX X. XXXXX of the firm
XXXXXXXXX XXXXX & XXXXXX, L.L.P.
A fee in the amount of Two Hundred Twenty Thousand and No/100 Dollars
($220,000.00) to be paid at the rate of not less than Six Thousand One Hundred
Dollars and 00/100 Dollars ($6,100.00) per month, in free trading shares of
common stock of the Company (S-8 shares) with the Company having the right to
elect to pay the monthly amount in stock, stock and cash, or all cash. If in
shares of stock, conversion price shall be based on the "closing price" of the
stock on the five (5) trading days prior to the date shares are issued (paid)
under the Agreement.
If paid in shares, such shares will be issued in the name of Xxxxxxx X.
Xxxxx, with the understanding that Xx. Xxxxx will qualify under the rules to
receive S-8 registered shares.
All sums paid in connection with this Exhibit shall be considered an
expense of litigation and shall be reimbursed simultaneously with all other
expense reimbursements from any proceeds from settlements or judgments prior to
any distribution to Attorney or Client in connection with fees on Client's share
of settlements.
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