CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of January 24, 2000 is
entered into by and between Omni Nutraceuticals, Inc., a Utah corporation
(herein referred to as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS,
INC., a California corporation (herein referred to as the "Consultant").
RECITALS:
WHEREAS, Company is a publicly held corporation with its common stock traded on
Nasdaq NMS; and
WHEREAS, Consultant has experience in investor communications and financial and
investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to assist, consult
and represent the Company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Term of Consultancy. Company hereby agrees to retain the Consultant to
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act in a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing immediately and ending on the second
anniversary of the date hereof ("Termination Date"). Company may terminate
Consultant's services prior to the Termination Date at any time following 30
days written notice of termination to Consultant ("Company's Early Termination
Date"), subject to the Remuneration provisions of Section 4 herein. Consultant
may terminate the provision of services at any time following the first
anniversary of the effective date hereof following 30 days written notice of
termination to Company ("Consultant's Early Termination Date"), subject to the
remuneration provision of Section 4 herein.
2. Duties of Consultant. The Consultant agrees that it will generally
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provide the following specified consulting services through its officers and
employees during the term specified in Section 1.:
(a) Advise and assist the Company in developing and implementing appropriate
plans and materials for presenting the Company and its business plans, strategy
and personnel to the financial community, establishing an image for the Company
in the financial community, and creating the foundation for subsequent financial
public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness during the
term of this Agreement of the Company's plans, strategy and personnel, as they
may evolve during such period, and advise and assist the Company in
communicating appropriate information regarding such plans, strategy and
personnel to the financial community;
(d) Assist and advise the Company with respect to its (i) stockholder and
investor relations, (ii) relations with brokers, dealers, analysts and other
investment professionals, and (iii) financial public relations generally;
(e) Perform the functions generally assigned to investor/stockholder
relations and public relations departments in major corporations, including
responding to telephone and written inquiries (which may be referred to the
Consultant by the Company); preparing press releases for the Company with the
Company's involvement and approval or reviewing press releases, reports and
other communications with or to shareholders, the investment community and the
general public; advising with respect to the timing, form, distribution and
other matters related to such releases, reports and communications; and
consulting with respect to corporate symbols, logos, names, the presentation of
such symbols, logos and names, and other matters relating to corporate image;
(f) Upon the Company's approval, disseminate information regarding the
Company to shareholders, brokers, dealers, other investment community
professionals and the general investing public;
(g) Upon the Company's approval, conduct meetings, in person or by
telephone, with brokers, dealers, analysts and other investment professionals to
advise them of the Company's plans, goals and activities, and assist the Company
in preparing for press conferences and other forums involving the media,
investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategies, mission
statements budgets, proposed transactions and other plans for the purpose of
advising the Company of the investment community implications thereof; and,
(i) Otherwise perform as the Company's financial relations and public
relations consultant.
3. Allocation of Time and Energies. The Consultant hereby promises to
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perform and discharge faithfully the responsibilities which may be assigned to
the Consultant from time to time by the officers and duly authorized
representatives of the Company in connection with the conduct of its financial
and investor public relations and communications activities, so long as such
activities are in compliance with applicable securities laws and regulations.
Consultant and staff shall diligently and thoroughly provide the consulting
services required hereunder. Although no specific hours-per-day requirement
will be required, Consultant and the Company agree that Consultant will perform
the duties set forth herein above in a diligent and professional manner. The
parties acknowledge and agree that a disproportionately large amount of the
effort to be expended and the costs to be incurred by the Consultant and the
benefits to be received by the Company are expected to occur within or shortly
after the first two months of the effectiveness of this Agreement. It is
explicitly understood that Consultant's performance of its duties hereunder will
in no way be measured by the price of the Company's common stock, nor the
trading volume of the Company's common stock. It is also understood that the
Company is entering into this Agreement with Liviakis Financial Communications,
Inc. ("LFC"), a corporation and not any individual member of LFC, and, as such,
Consultant will not be deemed to have breached this Agreement if any member,
officer or director of LFC leaves the firm or dies or becomes physically unable
to perform any meaningful activities during the term of the Agreement, provided
the Consultant otherwise performs its obligations under this Agreement.
4. Remuneration. As full and complete compensation for services described
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in this Agreement, the Company shall compensate LFC as follows:
4.1 (a) The Shares. For undertaking this engagement and for other good and
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valuable consideration, the Company agrees to issue and deliver to the
Consultant one million two hundred thousand (1,200,000) shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock"). The
Shares shall be issued and delivered to the Consultant immediately following
execution of this Agreement and shall, when issued and delivered to Consultant,
be fully paid, non-assessable, and a pre-payment for the provision of services
In accordance herewith.
(b) Non-returnable, Non-apportionable Portion of the Shares. The Company
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understands and agrees that Consultant has foregone significant opportunities to
accept this engagement and that the Company derives substantial benefit from the
execution of this Agreement and the ability to announce its relationship with
Consultant. Accordingly, eight hundred thousand (800,000) shares of the Shares
shall constitute payment for Consultant's agreement to consult to the Company
and are a nonrefundable, non-apportionable, and non-ratable retainer. If the
Company decides to terminate this Agreement prior to the Termination Date for
any reason whatsoever, it is agreed and understood that Consultant will not be
requested or demanded by the Company to return any of the 800,000 shares.
(c) Pro-ratable Portion of the Shares. Four hundred thousand (400,000)
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shares of the Shares shall constitute payment for Consultant's agreeing to
continue to consult the Company during the second year of the term and are a
retainer which is apportionable and pro-ratable to a limited extent, as follows:
If at any time during the second year of the Agreement, Company gives Consultant
a properly noticed Company's Early Termination Date, Consultant shall return to
Company the proportionate amount of the 400,000 shares that corresponds to the
period remaining of the second year after the noticed Company's Early
Termination Date, except that, if less than 90 days remain of the second year at
the time the Company gives Consultant the notice of Early Termination,
Consultant may retain the entirety of the Shares. If at any time during the
second year, Consultant elects an Early Termination Date, Consultant shall
return to the Company the proportionate amount of the 400,000 shares that
corresponds to the portion of the second year remaining following the properly
noticed Consultant's Early Termination Date.
(d) The Shares issued pursuant to this Agreement shall be issued
in the name of Liviakis Financial Communications, Inc. and shall not be
transferable until the earlier to occur of (i) the second anniversary of the
effective date hereof or (ii) the Company's Early Termination Date or (iii) the
Consultant's Early Termination Date.
4.2 Upon issuance of the Shares, Company shall cause to be issued a
certificate representing the required number of Shares and a written opinion of
counsel for the Company stating that said Shares are validly issued, fully paid
and non-assessable and that the issuance of them to Consultant has been duly
authorized by the Company. Company warrants that all the Shares issued to
Consultant pursuant to this Agreement shall have been validly issued, fully paid
and non-assessable and that the issuance of them to Consultant shall have been
duly authorized by the Company's board of directors.
4.3 Consultant acknowledges that the Shares have not been registered under
the Securities Act of 1933, as amended (the "Act") and accordingly are
"restricted securities" within the meaning of Rule 144 of the Act. As such, the
Shares may not be resold or transferred unless the Company has received an
opinion of its counsel reasonably satisfactory to the Company that such resale
or transfer is exempt from the registration requirements of the Act.
4.4 In connection with the acquisition of Shares hereunder, the Consultant
represents and warrants to the Company as follows:
(a) Consultant acknowledges that the Consultant has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning an investment in the
Shares, and any additional information which the Consultant has requested.
(b) Consultant's investment in restricted securities is reasonable in
relation to the Consultant's net worth, which is in excess of ten (10) times the
Consultant's cost basis in the Shares. Consultant has had experience in
investments in restricted and publicly traded securities, and Consultant has had
experience in investments in speculative securities and other investments which
involve the risk of loss of investment. Consultant acknowledges that an
investment in the Shares is speculative and involves the risk of loss.
Consultant has the requisite knowledge to assess the relative merits and risks
of this investment without the necessity of relying upon other advisors, and
Consultant can afford the risk of loss of his entire investment in the Shares.
Consultant is (i) an accredited investor, as that term is defined in Regulation
D promulgated under the Act, and (ii) a purchaser described in Section 25102 (f)
(2) of the California Corporate Securities Law of 1968, as amended.
(c) Consultant is acquiring the Shares for the Consultant's own account for
long-term investment and not with a view toward resale or distribution thereof
except in accordance with applicable securities laws.
5. Financing "Finder's Fee". It is understood that in the event Consultant
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introduces Company, or its nominees, to a lender or equity purchaser, not
already having a preexisting relationship with the Company, with whom Company,
or its nominees, ultimately finances or causes the completion of such financing,
Company agrees to compensate Consultant for such services with a "finder's fee"
in the amount of 2.5% of total gross funding provided by such lender or equity
purchaser, such fee to be payable in cash. This 2.5% will be in addition to any
fees payable by Company to any other intermediary, if any, which shall be the
subject of separate agreements negotiated between Company and such other
intermediary. It is also understood that in the event Consultant introduces
Company, or its nominees, to an acquisition candidate, either directly or
indirectly through another intermediary, not already having a preexisting
relationship with the Company, which Company, or its nominees, ultimately
acquires or causes the completion of such acquisition, Company agrees to
compensate Consultant for such services with a "finder's fee" in the amount of
2% of total gross consideration provided by such acquisition, such fee to be
payable in cash. This 2% will be in addition to any fees payable by Company to
any other intermediary, if any, which shall be the subject of separate
agreements negotiated between Company and such other intermediary. It is
specifically understood that Consultant is not and does not hold itself out be a
Broker/Dealer, but is rather merely a "Finder" in reference to the Company
procuring financing sources and acquisition candidates.
5.1 It is further understood that Company, and not Consultant, is
responsible to perform any and all due diligence on such lender, equity
purchaser or acquisition candidate introduced to it by Consultant under this
Agreement, prior to Company receiving funds or closing on any acquisition.
However, Consultant will not introduce any parties to Company about which
Consultant has any prior knowledge of questionable, unethical or illicit
activities.
5.2 Company agrees that said compensation to Consultant shall be paid in
full at the time said financing or acquisition is closed, such compensation to
be transferred by Company to Consultant within seven (7) business days of the
execution of the financing of acquisition closing document. Payment of said
compensation, will be a condition precedent to the closing of such financing or
acquisition, and Company shall execute any and all documents necessary to effect
said compensation.
5.3 As further consideration to Consultant, Company, or its nominees, agrees
to pay with respect to any financing or acquisition candidate provided directly
or indirectly to the Company by any lender or equity purchaser covered by this
Section 5 during the period of one year from the date of this Agreement, a fee
to Consultant equal to that outlined in Section 5 herein.
5.4 Consultant will notify Company of introductions it makes for potential
sources of financing or acquisitions in a timely manner (within approximately
three (3 ) business days of introduction) via facsimile memo. If Company has a
preexisting relationship with such nominee and believes such party should be
excluded from this Agreement, then Company will notify Consultant immediately
within two (2) business days of Consultant's facsimile to Company of such
circumstance via facsimile memo.
6. Expenses. Consultant agrees to pay for all its expenses (phone, mailing,
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labor, etc.), other than extraordinary items (travel required by/or specifically
requested by the Company, luncheons or dinners to large groups of investment
professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, print advertisements in publications,
etc.) approved by the Company prior to its incurring an obligation for
reimbursement.
7. Indemnification. The Company warrants and represents that all oral
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communications, written documents or materials furnished to Consultant by the
Company with respect to financial affairs, operations, profitability and
strategic planning of the Company are accurate and Consultant may rely upon the
accuracy thereof without independent investigation. The Company will protect,
indemnify and hold harmless Consultant against any claims or litigation
including any damages, liability, cost and reasonable attorney's fees as
incurred with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials excluding any such
claims or litigation resulting from Consultant's (i) communication or
dissemination of information not provided or authorized by the Company or (ii)
breach any warranties set forth in this Agreement.
8. Representations and Warranties. Consultant represents that it is not
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required to maintain any licenses and registrations under federal or any state
regulations necessary to perform the services set forth herein. Consultant
represents, warrants and agrees that, to the best of its knowledge, the
performance of the services set forth under this Agreement will not violate any
rule or
provision of any regulatory agency having jurisdiction over Consultant or any
SEC rules or regulations or federal or any state securities laws (collectively,
"Securities Laws"). Consultant represents, warrants and agreesthat, to the
best of its knowledge, Consultant and its officers and directors are not the
subject of any investigation, claim, decree or judgment involving any violation
of any Securities Laws. Consultant further represents, warrants and agrees that
it is not a securities Broker Dealer or a registered investment advisor.
Company represents, warrants and agrees that, to the best of its knowledge, that
it has not violated any rule or provision of any regulatory agency having
jurisdiction over the Company. Company represents, warrants and agrees that, to
the best of its knowledge, Company is not the subject of any investigation,
claim, decree or judgment involving any violation of any Securities Laws.
9. Legal Representation. The Company acknowledges that it has been
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represented by independent legal counsel in the preparation of this Agreement.
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Consultant represents that it has consulted with independent legal counsel
and/or tax, financial and business advisors, to the extent the Consultant deemed
necessary.
10. Status as Independent Contractor. Consultant's engagement pursuant to
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this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the consideration provided hereinabove is a
gross amount of consideration and that the Company will not withhold from such
consideration any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other such payment shall be made
or provided for by Consultant and the Company shall have no responsibility or
duties regarding such matters. Neither the Company or the Consultant possess
the authority to bind each other in any agreements without the express written
consent of the entity to be bound.
11. Attorneys' Fees. If any legal action or any arbitration or other
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proceeding is brought for the enforcement or interpretation of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in
connection with or related to this Agreement, the successful or prevailing party
shall be entitled to recover reasonable attorneys' fees and other costs in
connection with that action or proceeding, in addition to any other relief to
which it or they may be entitled.
12. Waiver. The waiver by either party of a breach of any provision of this
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Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
13. Notices. All notices, requests, and other communications hereunder
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shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:
To the Company:
Omni Nutraceuticals, Inc.
0000 Xxxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
To the Consultant:
Liviakis Financial Communications, Inc.
Xxxx X. Xxxxxxxx, President
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
With a copy to:
Xxxxx Xxxxxxx Law Offices
Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
It is understood that either party may change the address to which notices for
it shall be ad-dressed by providing notice of such change to the other party in
the manner set forth in this paragraph.
14. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed
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by, construed and enforced in accordance with the laws of the State of
California. The parties agree that San Francisco County, CA will be the venue
of any dispute and the state and federal courts of competent jurisdiction
sitting in such County will have jurisdiction over all parties, subject to the
Arbitration Clause of Section 15 of this Agreement.
15. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement, or the alleged breach thereof, or relating to Consultant's
activities or remuneration under this Agreement, shall be settled by binding
arbitration in California, in accordance with the applicable rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator(s) shall be binding on the parties and may be entered in any court
having jurisdiction as provided by Paragraph 14 herein. The provisions of Title
9 of Part 3 of the California Code of Civil Procedure, including section
1283.05, and successor statutes, permitting expanded discovery proceedings shall
be applicable to all disputes that are arbitrated under this paragraph.
16. Complete Agreement. This Agreement contains the entire agreement of the
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parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the
date first above written by their representatives, thereunto duly authorized.
"Company" OMNI NUTRACEUTICALS, INC.
By: /s/ Xxxx Xxxxx
Name and Title: Xxxx Xxxxx, President
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, President
