EXHIBIT 99.1
CORPORATE CONSULTING AGREEMENT
This Agreement is entered into this 16th day of October, 2001, by and
between Universal Automotive Industries, Inc. (the "Company") and Xxxxxxxxx
Securities, Inc. (the "Consultant").
WHEREAS, Company is seeking advice as to various business matters; and
WHEREAS, Company desires to engage Consultant to advise it with regard
to such matters, and
WHEREAS, Company and Consultant desire to enter into this Agreement
upon the terms and conditions hereof.
NOW THEREFORE, upon the consideration of the mutual promises and
agreements contained herein, the parties agree as follows:
AGREEMENT
1. ENGAGEMENT OF CONSULTANT. The Company hereby engages Consultant and
Consultant hereby agrees to render services to the Company as set forth
below.
2. SERVICES. During the term of this Agreement, Consultant shall place at
the disposal of the Company its judgment and experiences and provide
advice to, and consult with, the Company concerning:
- business and financial planning;
- corporate organization and structure;
- capital structure;
- business plans and projections;
- valuation of the Company;
- enhancement of the depth and breath of the market for
the Company's securities;
- alternatives for raising capital;
- review of merger and acquisition opportunities;
- meetings with members of the financial community;
- relations with its securities holders;
- management needs;
- preparation and distribution of periodic reports.
The Consulting shall be provided to the Company in such form, manner
and place as the parties reasonably agree. The Consultant shall devote
as much time as may be reasonably necessary to provide the consulting
services. Consultant shall not by this Agreement be prevented or barred
from rendering services of the same or similar nature, as herein
described, or services of any nature whatsoever, for, or on behalf of,
persons, other than Company. Similarly, Company shall not be prevented
or barred from seeking or requiring services of a same or similar
nature from persons other than Consultant.
3. ACCURACY OF INFORMATION. Consultant may rely on all information
provided by the Company and Consultant may disclose such information to
third parties with the Company's consent. The Company shall be solely
responsible for obtaining confidentiality agreements from any person;
provided, however, Consultant, at the request of the Company, shall
obtain such an agreement from a person in the form proscribed by the
Company.
4. TERM. The term of this Agreement shall be for a twelve (12) month
period commencing on the date of this Agreement. During the term of
this Agreement, a party may terminate the Agreement should there be a
material breach of this Agreement by the other party that is not
corrected within ten (10) days of notice being given by the
non-breaching party. The Agreement may be extended for another term of
one year upon written consent of the parties.
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5. COMPENSATION. The Company shall pay to the Consultant $2,500 per month
payable quarterly in advance, the first installment payable upon the
signing of this Agreement. An initial, one time fee of $10,000 is also
to be paid to the Consultant by the Company upon the signing of this
Agreement. Additionally, the Company will grant to Xxxxxxxxx Securities
warrants (the "Warrant") to purchase 200,000 shares of the Company's
common stock, 100,000 Warrants with an exercise price of $2,000 per
common share, and 100,000 Warrants with an exercise price of $2.50 per
common share, exercisable not less than twelve (12) months from the
date of this Agreement for a period of 36 months thereafter. The
Company shall reimburse the Consultant for all out-of-pocket expenses
incurred on behalf of the Company within thirty (30) days of submission
of a statement of said expenses by the Consultant. Expenses shall
require prior written approval of the Company. In the event of
termination of this agreement, all cash fees that would accrue after
the date of termination would lapse and all warrants granted hereunder
shall be reduced by the percentage of the year's term remaining
following the termination.
The Company also agrees to grant to the Consultant, subject to the
conditions listed below, the right to demand registration of the Common
Stock issuable upon exercise of the Warrant referred to above, on one
(1) occasion with all expenses of the registration to be borne by the
Company; provided, however, that such demand registration rights shall
be exercisable after twelve (12) months from the date of the Agreement,
and the expense borne by the Company does not exceed $5,000.
The Company will, subject to the conditions listed below, to the extent
necessary to permit the sale of such shares, grant "piggy back"
registration rights to include the shares of Common Stock issueable
upon exercise of the Warrant in any registration statement filed by the
Company under the Securities Act of 1933 relating to any underwriting
of the sale of Common stock or other security. Inclusion of such shares
is subject to the willingness of the managing underwriter(s) to include
said shares.
6. MERGER AND ACQUISITION. The Company may, in its sole discretion which
shall be deemed exercised only if a written request for such service is
provided by the Company, engage Consultant to assist it in negotiating,
structuring and evaluating a potential merger or acquisition and shall
pay a fee to Consultant for its services calculated as follows:
-5% of the value of the Transaction to the Company up to and including
$2,000,000;
-4% of the value of the Transaction to the Company greater than
$2,000,000 and up to and including $4,000,000;
-3% of the value of the Transaction to the Company greater than
$4,000,000 and up to and including $6,000,000;
-2% of the value of the Transaction to the Company greater than
$6,000,000 and up to and including $8,000,000;
-1% of the value of the Transaction to the Company in excess of
$8,000,000.
Value of the Transaction (consideration) is defined as:
a. The total proceeds and other consideration (including cash,
securities or installments) issued in connection with an asset
purchase, acquisition, merger, joint venture or investment.
b. If a portion of such consideration includes contingent
payments (whether or not related to future earnings or
operations), aggregate consideration will be paid as the
payments are made.
c. In the event that the aggregate consideration for the
Transaction consists in whole or in part of securities, for
the purpose of calculating the amount of aggregate
consideration, the value of such securities will be the
average bid of closing prices for five consecutive business
days preceding the consummation of the Transaction or, in the
absence of a public market thereof, the fair market value
thereof shall be as the Company and the Consultant agree on
the day preceding the consummation of the Transaction.
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7. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY. The obligations of
the Consultant described in this Agreement consist of consulting
services to the Company. In no event shall Consultant be required by
this Agreement to act as the agent of Company or otherwise to represent
or make decisions for Company. All final decisions with respect to acts
of Company or its affiliates, whether or not made pursuant to or in
reliance on information or advice furnished by Consultant hereunder,
shall be those of Company or such affiliates, and Consultant shall
under no circumstances be liable as a consequence of such decisions.
8. INDEMNITY. The Company agrees to indemnify and hold Consultant, its
affiliates, control persons, officers, directors, employees, agents and
sureties harmless from and against all losses, claims, damages,
liabilities, cost or expenses (including reasonable attorneys and
accountants fees and the cost of any of Consultant's personnel involved
in any such matter) arising out of Consultant's entering into or
providing services under this Agreement, including costs arising out of
any dispute whether or not Consultant is a party to such dispute
provided that such indemnity shall not extend to acts of willful
misconduct or malfeasance by consultants.
If for any reason the foregoing indemnification is unavailable to
Consultant and/or the other indemnified persons, or insufficient to
hold them harmless, then the Company shall contribute to the amount
paid or payable by Consultant and/or the other indemnified persons as a
result of such loss, claim, damage, liability, cost or expense in such
proportion as is appropriate to reflect not only the relative benefits
received by the Company and its affiliates, control persons, officer,
directors, employees, agents and sureties ("Associated Persons") on the
one hand and Consultant and/or the other indemnified persons on the
other hand but also the relative fault of the Company and its
Associated Persons and Consultant and/or the other indemnified persons,
as well as any relevant equitable considerations. The reimbursement,
indemnity and contribution obligations of the Company under this
Section shall be in addition to any liability which the Company may
otherwise have and shall be binding upon and insure to the benefit of
any successor, assigns, heirs and personal representatives of the
Company, Consultant and any such indemnified person. The provisions of
this Section shall survive the termination and expiration of this
Agreement.
9. AMENDMENT. No amendment to this Agreement shall be valid unless such
amendment is in writing and is signed by authorized representatives of
all the parties to this Agreement.
10. WAIVER. Any of the terms and conditions of this Agreement may be waived
at any time and from time to time in writing by the party entitled to
the benefit hereof, but a waiver in one instance shall not be deemed to
constitute a waiver in any other instance. A failure to enforce any
provision of this Agreement shall not operate as a waiver of this
provision or any other provision hereof.
11. SEVERABILITY. In the event that any provision of this Agreement shall
be held to be invalid, illegal or unenforceable in any circumstances,
the remaining provisions shall nevertheless remain in full force and
effect and shall be construed as if the unenforceable portion or
portions were deleted.
12. ASSIGNMENT. This Agreement shall be binding upon and insure to the
benefit of the parties and their respective successors and permitted
assigns. Any attempt by either party to assign any rights, duties or
obligations which may arise under this Agreement without the prior
written consent of the other party shall be void.
13. GOVERNING LAW. The validity, interpretation and construction of this
Agreement and each part thereof will be governed by the laws of the
State of Colorado.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which
together will constitute one and the same instrument.
15. ARBITRATION. The parties agree that all controversies which may arise
between them concerning any transaction, the construction, performance
or breach of this Agreement shall be determined by arbitration in
accordance with the rules of the National Association of Securities
Dealers, Inc. This shall ensure to the benefit of and be binding on the
Company, its affiliates, control persons, directors, officers,
employees, agents and sureties and on the Consultant, its affiliates,
control persons, directors, officers, employees,
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agents and sureties. Any award rendered in arbitration may be enforced
in any court of competent jurisdiction.
16. Any notices required under this Agreement shall be deemed to be in
compliance if mailed Certified Mail/Return Receipt Requested to the
addressee as hereafter listed.
Xxxxxxxxx Securities, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000
Universal Brake Parts
00000 Xxxxx Xxxxxxx Xxx.
Xxxxx, XX 00000
Universal Automotive Industries, Inc.
(The "Company")
By: /s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx
President
Xxxxxxxxx Securities, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Vice President - Investments
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