CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is entered into this 4th day of
August 1995, but made effective as of the 1st day of March 1995 by and between
BRIA Communications Corporation, a New Jersey corporation (and its designees)
(collectively referred to as "Client") with principal offices at 000 Xxxx 000
Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, and Karston Electronics, Ltd.
("Consultant").
PREMISES
WHEREAS, Consultant is familiar with business conditions and contacts
in BRIA's industry in China and Europe.
WHEREAS, Client desires to secure the services of Consultant and to
protect its interest in obtaining comprehensive covenants from Consultant not to
compete with Client nor to divulge Client's confidential information.
WHEREAS, Consultant desires to enter into a written agreement to serve
as a consultant to Client for the purpose of introducing Client to persons and
entities for potential acquisitions, joint venture partnerships, or other
business alliances in China and Europe.
AGREEMENT
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the receipt and adequacy of which is hereby
expressly acknowledged, Client and Consultant agree as follows:
Section 1- Engagement of Consultant and Term of Agreement.
A. Client retains Consultant to assist Client in general business
consulting, including the introduction in China and Europe of
Client to persons and entities that will enhance the value of
Client's stock by establishing and maintaining the stock quote
on the bulletin board market system and developing a market
and market makers, as well locating potential acquisition
candidates in China or Europe and performing other services
that Client's board of directors reasonably requests from time
to time ("Consulting Services").
B. The term of this Agreement ("Term") shall, subject to earlier
termination as described herein, be one (1) year from the
execution of this Agreement, unless Consultant provides Client
at least 30 days or Client provides to Consultant at least 14
days written notice of its decision to terminate this
Agreement.
Section 2 - Compensation
Client shall compensate Consultant in the following manner:
A. Client shall compensate Consultant one hundred twenty thousand
(120,000) post-reverse shares of Client's common stock, par
value $0.02 per share ("Common Stock") pursuant to Regulation
S of the Securities Act of 1933. Payment of shares shall be
made immediately with the formal of this Agreement.
B. Consultant shall be granted an option to purchase two hundred
fifty thousand (250,000) post-reverse shares of Client's
common stock at the exercise price $0.50 per share. The
options under this paragraph 2(B) are to be exercise, if at
all, within one (1) year of the execution of this Agreement
(Requisite Option Agreement and Notice of Exercise are
attached as Annex A hereto and incorporated herein by this
reference) and issued pursuant to Regulation S of the
Securities Act of 1933.
C. All shares of stock that are issued to Consultant under
this Agreement shall, when issued, be validly issued,
fully paid and nonassessable.
Section 3 - Client's Representations
Client represents, warrants and covenants to Consultant that each of
the following is true and complete as of the date of this Agreement:
A. Client's Authority for Agreement. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by
the Client. This Agreement has been duly executed and
delivered by Client and constitutes the valid and legally
binding obligation of Client enforceable in accordance with
its terms, except to the extent that enforceability may be
subject to or limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally. To the best of Client's
knowledge, after due inquiry, the execution and delivery of
this agreement and the consummation of the transaction
contemplated herein will not conflict with any mortgage,
indenture, lease, contract, commitment, agreement, or other
instrument, permit, concession, grant, franchise, license,
judgement, order, decree, statute, law, ordinance, rule or
regulation applicable to Client or any of its properties or
assets.
B. Consents and Authorizations. No consent, approval, order or
authorization of, or registration, declaration, compliance
with or filing with, any governmental or regulatory authority
is required in connection with the execution and delivery of
this Agreement to permit the consummation by Client of the
transactions contemplated herein or to prevent the termination
of any material right, privilege, license or agreement of
Client or to prevent any material loss to Client or the
Client's business, by reason of the transactions contemplated
herein.
Section 4 - Non-Circumvention
Client agrees that Client will not enter into any merger with or
acquisition of a Target Company, raise any funds for which Consultant
provided services, or enter into any transaction involving a business
opportunity or asset introduced to Client by Consultant, without
compensating Consultant pursuant to this Agreement. Neither will Client
terminate this Agreement solely as a means to avoid paying Consultant
compensation earned or to be earned, or in any other way attempt to
circumvent Consultant.
Section 5 - Termination of Agreement by Consultant and by Client
Consultant may terminate this Agreement if the following occurs:
A. Payments due under this Agreement are not timely made.
B. Consultant makes a bona fide decision to terminate its busin-
ess and liquidate its assets.
C. An unanticipated material change in either the market, Client
or Consultant makes continued performance under this Agreement
unreasonable.
D. Breach of any provision of this Agreement.
E. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.
Client may terminate this Agreement under the following conditions:
A. Consultant fails to follow Client's reasonable instructions.
Client must advise Consultant that his actions or inactions
are unacceptable and give Consultant thirty (30) days for
which to comply. If Consultant fails to comply within thirty
(30) days, Consultant may be terminated hereunder by Client's
service of notice of termination to Consultant.
B. If, in the judgment of the Board of Directors of Client,
Consultant's actions or conduct would make it unreasonable to
require Client to retain Consultant. Such acts include, and
are in the nature of, dishonesty, illegal activities,
activities harmful to the reputation of the Client, and
activities which create civil or criminal liability for the
Client.
C. Notwithstanding the termination of this Agreement, Consultant
shall be entitled to receipt of all compensation owed pursuant
to Sections 2(A)-2(D) up to the time of termination of this
Agreement.
Section 6 -Nondisclosure of Confidential Information
In consideration for the Client entering into this Agreement,
Consultant agrees that the following items used in the Client's
business are secret, confidential, unique, and valuable, were developed
by Client at great cost and over a long period of time, and disclosure
of any of the items to anyone other than Client's officers, agents, or
authorized employees will cause Client irreparable injury.
A. Non-public inancial information, accounting information,
plans of operations, possible mergers or acquisitions prior to
the public announcement.
B. Customer lists, call lists, and other confidential customer
data;
C. Memoranda, notes, records concerning the technical and
creative processes conducted by Client;
D. Sketches, plans, drawings and other confidential research and
development data or;
E. Manufacturing processes, chemical formulae, and the compos-
ition of Client's products.
Consultant shall have no liability to the Client with respect to the
use or disclosure to others not party to this Agreement, of such
information as Consultant can establish to:
A. have been publicly known;
B. have become known, without fault on the part of Consultant,
subsequent to disclosure by Client of such information to
Consultant;
C. have been otherwise known by Consultant prior to communication
by the Client to Consultant of such information, or
D. have been received by Consultant at any time from a source
other than Client lawfully having possession of such in-
formation.
Section 7 - Best Efforts
Consultant agrees that it will at all times faithfully and to the best
of its experience, ability and talents, perform all the duties that may
be required of and from Consultant pursuant to the terms of this
Agreement. Consultant does not guarantee that its efforts will have any
impact on Client's business or that any subsequent financial
improvement will result from Consultant's efforts.
Section 8 - Client's Right to Approve Transaction
Client expressly retains the right to approve, in its sole discretion,
each and every transaction introduced by Consultant that involves
Client as a party to any agreement. Consultant and Client mutually
agree that Consultant is not authorized to enter into agreements on
behalf of Client.
Section 9 - Client Under No Duty or Obligation to Accept or Close on any
Transactions
It is mutually understood and agreed that Client is not obligated to
accept or close any transaction submitted by Consultant.
Section 10 - All Prior Agreements Terminated
This Agreement comprises the entire agreement and understanding between
the parties hereto at the date of this Agreement as to the subject
matter hereof and supersedes and replaces all proposals, prior
negotiations and agreements, whether oral or written, between the
parties hereto in connection with the subject matter hereof. None of
the parties hereto shall be bound by any conditions, definitions,
warranties or representations with respect to the subject matter of
this Agreement other than as expressly provided in this Agreement
unless the parties hereto subsequently agree to vary this Agreement in
writing, duly signed by authorized representatives of the parties
hereto.
Section 11 - Consultant is not an Agent or Employee of Client
Consultant's obligations under this agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be
considered to act as the employee or agent of Client or otherwise
represent or bind Client. For the purposes of this Agreement,
Consultant is an independent contractor. All final decisions with
respect to acts of Client or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by
Consultant hereunder, shall be those of Client or such affiliates and
Consultant, its employees or agents shall under no circumstances be
liable for any expense incurred or loss suffered by Client as a
consequence of such action or decisions.
Section 12 - Miscellaneous
A. Authority. The execution and performance of this Agreement have
been duly authorized by all requisite corporate action. This
Agreement constitutes a valid and binding obligation of the
parties hereto.
B. Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by
the parties hereto.
C. Waiver. No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. No
consent, waiver or excuse by either party, express or implied,
shall constitute a subsequent consent, waiver or excuse.
D. Assignment:
(i) The rights and obligations of the Consultant under this
Agreement shall inure to the benefit of and shall be binding
upon its successors and assigns. There shall be no rights of
transfer or assignment of this Agreement by Client except with
the prior written consent of the Consultant.
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted
by this Agreement must be in writing and shall be deemed to be
properly given when delivered in person to an officer of the
other party, when deposited in the Unites States mails for
transmittal by certified or registered mail, postage prepaid, or
when deposited with a public telegraph company for transmittal or
when sent by facsimile transmission, charges prepaid provided
that the communication is addressed:
(i) In the case of Consultant to:
Karston Electronics, Ltd.
Xxxx Xxxxx Building, Xxxxxxx Xxx #1
Road Town, Tortola, British Virgin Islands
(ii) In the case of Client to:
BRIA Communications Corporation
ATTN: Xxxxxxx Xxxxxxxxx
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
(000) 000-0000
or to such other person or address designated by Client in
writing to receive notice.
F. Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading
and the text of this Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with
respect to the transaction contemplated by the Agreement. It may
be executed in any number of counterparts but the aggregate of
the counterparts together constitute only one and the same
instrument.
H. Effect of Partial Invalidity. In the event that 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 of this Agreement, but this
Agreement shall be constructed as if it never contained any such
invalid, illegal or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be governed by the laws of the State of
Utah, without regard to its law on the conflict of laws. Any
dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in Salt Lake County, Utah. The parties
exclude any and all statutes, laws and treaties which would allow
or require any dispute to be decided in another forum or by other
rules of decision than provided in this Agreement.
J. Attorneys' Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be
entitled to recover actual attorneys' fees, court costs, and
other costs incurred in proceeding with the action from the other
party. The attorney's fees, court costs or other costs, may be
ordered by the court in its decision of any action described in
this paragraph or may be enforced in a separate action brought
for determining attorneys' fees, court costs, or other costs.
Should either party be represented by in-house counsel, all
parties agree that party may recover attorneys' fees incurred by
that in-house counsel in an amount equal to that attorney's
normal fees for similar matters, or, should that attorney not
normally charge a fee, by the prevailing rate charged by
attorneys with similar background in that legal community.
K. Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute
such other and further documents and take such other and further
actions as may be necessary or convenient to effect the
transactions described herein.
M. Indemnification. Client and Consultant agree to indemnify, hold
harmless and, at the party seeking indemnification's sole option,
defend the other from and against all demands, claims, actions,
losses, damages, liabilities, costs and expenses, including
without limitation, interest, penalties, court fees, and
attorneys' fees and expenses asserted against or imposed or
incurred by either party by reason of or resulting from a breach
of any representation, warranty, covenant condition or agreement
of the other party to this Agreement. Neither party shall be
responsible to the other party for any consequential or punitive
damages.
0. No Third Party Beneficiary. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under
or by reason of this Agreement, unless this Agreement
specifically states such intent.
P. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile as a signed original of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.
BRIA Communications Corporation Karston Electronics, Ltd.
/s/ Xxxxxxx Xxxxxxxxx /s/Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx, President First Directors, Inc., President
Represented by: Xxxxx Xxxxxx
EXHIBIT A
SUITABILITY LETTER
TO: BRIA Communications Corp.
c/o Xxxxxxx Xxxxxxxxx
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Karston Electronics, Ltd. ("Karston") makes the following representations
with the intent that they may be relied on by BRIA Communications Corp. (the
"Company"), in determining Karston's suitability as a purchaser of securities of
the Company (the "Shares").
1. Karston has received and read the Company's quarterly report on Form
10-QSB for September 30, 1994 and the annual report on Form 10-KSB for the year
ended December 31, 1993, and any amendments to such reports (the "Annual and
Quarterly reports") and Karston is familiar with all terms and provisions
thereof.
2. Karston has adequate means of providing for its current needs and
possible contingencies and have no need in the foreseeable future for liquidity
of any investment in the Company.
3. For Foreign Investors Only:
(a) Offshore Transaction. Karston confirms that the offer and sale
of the Shares occurred in an "offshore transaction" in that:
(i) Karston [ ]is [ ]is not a "person" in the United States.
(ii)At the time the Subscription Agreements were entered into,
Karston was outside the United States.
[ ] Yes [ ] No
(b) Non "U.S. Person." Karston is not a U.S. Person, as defined
below. For purposes of the above representation, "U.S. Person"
means:
(i) any natural person resident in the United States;
(ii)any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) any estate of which any executor or administrator is a U.S.
Person;
(iv) any trust of which any trustee is a U.S. Person;
(v) any agency or branch of a foreign entity located in the
United States;
(vi)any non-discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in
the United States; and
(vii) any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction;and
(B) formed by a U.S. person principally for the purpose of
investing in securities not registered under the Securities
Act, unless it is organized or incorporated, and owned, by
accredited investors (as defined in Rule 501(a) under the
Securities Act) who are not natural persons, estates or
trusts.
4. Karston has previously been advised that Karston would have an
opportunity to review all the pertinent facts concerning the Company, and to
obtain any additional information which Karston might request, to the extent
possible or obtainable, without unreasonable effort and expense, in order to
verify the accuracy of the information contained in the Annual and Quarterly
Reports.
5. Karston has personally communicated or been offered the opportunity
to communicate with executive officers of the Company to discuss the business
and financial affairs of the Company, its products and activities, and its plans
for the future. Karston acknowledges that if it would like to further avail
itself of the opportunity to ask additional questions of the Company, the
Company will make arrangements for such an opportunity on request.
6. Karston has been advised that no accountant or attorney engaged by
the Company is acting as Karston's representative, accountant, or attorney.
7. Karston is a bona fide resident of Tortola, British Virgin Islands
with its principal offices in the Tortola, British Virgin Islands. The address
below is the true and correct principal place of business.
DATED this 1st day of March 1995.
Karston Electronics, Ltd.
/s/ Xxxxx Xxxxxx
First Directors, Inc., President
Represented by Xxxxx Xxxxxx
Karston Electronics, Ltd.
Xxxx Xxxxx Building, Xxxxxxx Xxx #1,
Road Town, Tortola, British Virgin Islands
NOTICE OF EXERCISE
[To be signed only upon exercise of Option]
TO: BRIA Communications Corp.
The undersigned, the owner of the Attached Option, hereby irrevocably
elects to exercise the rights to purchase thereunder ______________ shares of
Common Stock of BRIA Communications Corp. and herewith pays for the shares in
the manner specified in the Option. The undersigned requests that the
certificates for such shares be delivered as per instructions indicated below.
If such shares are not all of the shares available under the Option, the
undersigned further requests that a new option certificate be issued and
delivered to the undersigned for the remaining shares purchasable under the
Option.
DATED this 1st day of March 1995.
By: /s/ Xxxxx Xxxxxx
Instructions for delivery:
