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Medical Technology Systems, Inc./de Jong & Associates Inc. Agreement
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Consulting Agreement
This agreement ("Agreement") is made effective as of January 2, 2001, by and
between de Jong & Associates, Inc., a California Corporation ("Consultant"), and
Medical Technology Systems, Inc., a Delaware Corporation (the "Company").
Witnesseth:
Whereas, Consultant is engaged in the business of providing business consulting
services, promotion and investor relations services to companies for investors,
stock brokerages, and the investment community, and:
Whereas Consultant will provide such services and perform promotion and investor
relation's services for Company, all on the terms and condition contained
herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. Engagement. Company hereby engages Consultant and Consultant hereby accepts
engagement from Company as a consultant. Consultant shall perform services for
Company for the period and upon the terms and conditions set forth in this
Agreement.
2. Scope of Services and Duties of Consultant
2.1. Consultant shall:
2.1.1. Advise Company and provide assistance in the area of investor
relations, and bring the Company to the favorable attention of the
investment community;
2.1.2. Promote meetings and communications in which the public and
securities industry professionals shall be introduced to the Company as
circumstances may require;
2.1.3. Assist Company in the development of due diligence packages for
brokers, investors and analysts if needed;
2.1.4. Assist Company in the development of a corporate recognition
program that identifies Consultant as the point of contact for brokers and
investors;
2.1.5. Coordinate it's services with other outside consultants engaged
by the Company during the term of this agreement;
2.1.6. Assist Company in identifying and contracting with required
professionals as needed;
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Consultant will perform these services understanding that the
above-referenced services will be performed in various parts of the United
States and that Company will have the option of making presentations at any
meeting arranged for the Company.
Consultants and Company acknowledge that it is the Company's
responsibility to provide Consultant with monthly DTC sheets.
2.2 Performance of Services and Duties. Consultant shall serve Company
faithfully and to the best of its ability and devote such time, attention,
skill and effort as is required to effectively discharge its duties
hereunder, consistent with the standards of conduct and professionalism
applicable to the securities industry. The manner, means and methods of
conducting the Services are under the joint control of Consultant and
Company, requiring the knowledge and approval of Company, which shall not
be unreasonably withheld so long as they are lawful and consistent with the
terms of this Agreement.
2.3 Use of Services or Advice. It is understood that there may be
times when Company does not use the services or advice of Consultant. The
failure of Company to use, or seek in writing Consultant advice and/or
services and/or assistance, as set forth in this paragraph 2, shall not be
deemed as non-performance of Consultant.
3. Term.
3.1. Term. The term of this agreement shall commence as of January 2nd
2001, and shall continue for twelve months. This agreement may be
terminated by either party without cause after 90 days from the signing of
this agreement.
4. Compensation.
4.1 The Company agrees to issue to the Consultant a warrant to
purchase 80,000 shares of the Company's common stock exercisable at a price
per share equal to the closing price of the Company's common stock on
January 2, 2001 as follows:
30,000 shall vest 90 days from the signing of this agreement
as long as consultant has not terminated the agreement
pursuant to Section 3.1;
25,000 shall vest on the date that the price of the stock
reaches $2.00 per share, as long as consultant has not
terminated the agreement pursuant to Section 3.1;
15,000 shall vest on the date that the price of the stock
reaches $2.50 per share, as long as consultant has not
terminated the agreement pursuant to Section 3.1; and
10,000 shall vest on the date that the price of the stock
reaches $3.00 per share, as long as consultant has not
terminated the agreement pursuant to Section 3.1.
Thesewarrants shall expire on the third anniversary of the date when they
become exercisable. Company shall execute an agreement confirming the
granting of these warrants to Consultant. The Company agrees to include the
registration of all shares and underlying warrants issued under the terms
of this Agreement in the first and, if necessary any subsequent
registrations undertaken by the Company.
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4.2 Delivery of the above-mentioned warrants granted in terms of this
agreement to de Jong & Associates will be completed within 90 days from the
signing of this agreement.
4.3 Right to Convert Warrant. In addition to the right to exercise the
Consultant Warrant for cash pursuant to Section 4.1, Consultant shall have
the right to convert the Consultant's Warrant (in whole but not in part) by
the surrender of the Consultant's Warrant at the office of the Company at
any time during the term of the Consultant Warrant, into shares of Common
Stock as provided for in this Section 4.3. Upon exercise of this conversion
right, Consultant shall be entitled to receive that number of shares of
Common Stock of the Company equal to the quotient obtained by dividing
[(A-B)(X)] by (A), where:
(A) = the Market Price of one share of Common Stock on the date of
conversion of the Consultant's Warrant.
(B) = the Common Stock Exercise Price for one share of Common Stock
under the Consultant's Warrant.
(X) = the number of Shares issuable upon exercise of the Consultant's
Warrant.
If the above calculation results in a negative number, then no shares
of Common Stock shall be issued or issuable upon conversion of the
Consultant's Warrant.
Upon conversion of the Consultant's Warrant, the Consultant shall be
entitled to receive a certificate for the number of shares of Common Stock
determined under this Section 4.3.
4.4 Cash Compensation. Company shall pay Consultant $15,000 upon the
signing of this Agreement and a monthly consulting fee of Five Thousand
Dollars per month ($5,000), on the first day of each month commencing April
1, 2001. Company, at its option, may pay this fee in free trading stock.
4.5 Expenses. Expenses shall be negotiated on a case-by-case basis.
Postage and printing expenses for Company shall be reimbursable on a
monthly basis, upon receipt by the Company of acceptable document support.
4.6 Office Facilities. Consultant shall be responsible for its office
facilities, as well as such staff equipment and materials as Consultant may
deem necessary for Consultant, agents and representatives to fulfill its
duties under this Agreement.
5. Confidentiality. Consultant shall, and shall cause its directors, officers
and employees to hold confidential and not to publish, disclose or make
accessible to any other person not bound by an obligation of confidentiality all
information which (i) Company provides to Consultant, its officers and employees
in relation to Company's financial condition, results of operations, business,
property, assets or liabilities, and (ii) which Company specifically designates
or marks as being confidential. Any information that is provided orally shall be
considered confidential if Company provides Consultant with written notice of
its intention that such information remain confidential within five business
days of the date of disclosure of such information.
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Notwithstanding the foregoing, information shall not be deemed confidential
if (i) it becomes public knowledge, (ii) Consultant is aware of the information
prior to its disclosure by Company, or (iii) Consultant learns of the
information through a third party not under an obligation of confidentiality to
Company.
6. Indemnification.
6.1 Company's Indemnification. Consultant shall have no liability with
respect to decisions made or actions taken by Company in reliance on advice
or recommendations given by Consultant or transactions presented to Company
by Consultant. Company agrees to indemnify and hold harmless Consultant and
its Affiliates, the respective members, agents and employees and each other
person, if any, controlling Consultant or any of their Affiliates
(collectively, the "Consultant Parties"), to the full extent lawful, from
and against all losses, claims, damages, liabilities and expenses incurred
by them (including attorney's fees and disbursements) that result from
actions taken or omitted to be taken (including any untrue statements made
or any statements omitted to be made) by Company, its agents or employees.
6.2 Consultants Indemnification. Company shall have no liability with
respect to decisions made or actions taken by Consultant in reliance on
advice or recommendations given by Company or transactions presented to
Consultant by company. Consultant agrees to indemnify and hold harmless
Company, and the respective directors, officers, agents and employees or
Company, to the full extent lawful, from and against all losses, claims,
damages, liabilities and expenses incurred by them (including attorney's
fees and disbursements) that results from actions taken or omitted to be
taken (including any untrue statements made or any statements omitted to be
made) by Consultant, its agents or employees.
6.3 Process of Indemnification. Each person or entity seeking
indemnification hereunder (the "Indemnified Party") shall promptly notify
the other (the "Indemnifying Party") of any loss, claim, damage, or expense
for which the Indemnifying Party may become liable pursuant to this
Section. The Indemnifying Party shall have the opportunity to defend any
claim for which it may be liable hereunder, provided it notifies the
Indemnified Party within fifteen days of notice of the claim.
The Indemnified Party shall not pay, settle or acknowledge liability
under any such claim without consent of the Indemnifying Party, and shall
permit the Indemnifying Party a reasonable opportunity to cure any
underlying problem or to mitigate actual or potential damages. The rights
stated pursuant to this Section shall be in addition to any rights that the
Indemnified party may have at common law or otherwise, including, but not
limited to, any right to contribution.
6.4 Scope. The scope of this indemnification shall be limited to, and
pertain only to certain transactions contemplated or entered into pursuant
to this Agreement.
7. Representations and Warranties of the Company. The Company represents and
warrants to Consultant that:
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7.1.1 The Company is (i) a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and
(ii) has the corporate power and corporate authority to enter into this
Agreement.
7.1.2 The execution and delivery of this Agreement and the performance
of the obligations and consummation of the transactions herein contemplated
will not conflict with or constitute a breach of or default under the
Article of Incorporation or Bylaws of the Company.
8. Covenants and Representations of Consultant
8.1.1 Consultant is (i) a corporation duly organized, validly existing
and in good standing under the laws of the State of California and (ii) has
the corporate power and corporate authority to enter into this Agreement.
8.1.2 Consultant covenants and agrees to comply with any applicable
requirements of the Securities Act, the Securities Exchange Act of 1934
("Exchange Act"), applicable Blue Sky securities laws and the published
rules and regulations thereunder (including, but not limited to, Sections
3(b), 4(2) and 4(6) of the Securities Act and Rules 505 and 506 thereunder,
and the Rules of Fair Practice of the National Association of Securities
Dealers ("NASD").
8.1.3 Consultant is not authorized to act as agent of the Company in
any connection or transaction, and Consultant agrees not to act as such
agent and not to purport to do so without the prior written approval of the
Company.
8.1.4 Consultant, by performance of this Agreement, shall not violate
any of it's existing contracts.
9. Further Assurances. The parties shall execute, acknowledge and deliver any
further documents, instruments, or other assurances and shall take any other
action consistent with the terms of this Agreement that may be reasonably
requested by the other party or its counsel for the purpose of confirming or
effectuating any of the transactions contemplated by this Agreement.
10. Notices. All notices required or desired to be given hereunder shall be
deemed to be duly given upon personally delivering such notice or upon delivery
by fax or other electronic means, or three days after mailing it, via certified
or registered mail, postage prepaid to the parties at the following addresses:
If to Consultant: de Jong & Associates
000 Xxxxx Xxxxx Xxxxxxx 000, Xxxxx X
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx xx Xxxx
If to Company: Medical Technology Systems, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxxx
Giving written notice in the manner provided for above may change the above
address.
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11. Binding Effect. This Agreement and any amendment hereto, shall be binding
upon the parties hereto, their successors, heirs, next of kin, executors,
administrators, personal representatives, legal representatives, assignees,
creditors, including receivers, and all other persons with notice or knowledge
of the provisions hereof.
12. Independent Contractor. Consultant shall have no authority to bind Company
to any agreement or obligation with a Relationship of Parties. The relationship
of the parties hereto is one of independent contractors. Nothing in this
Agreement shall be construed to constitute the parties as partners with each
other.
13. Governing Law and Venue. This Agreement shall be deemed to have been
executed in the State of Florida and shall be governed and construed as to both
substantive and procedural matters in accordance with the laws of the State of
Florida, but excepting any State of Florida rule which would result in the
application of the law of a jurisdiction other than the State of Florida. Any
legal proceeding arising out of this Agreement shall be brought only in a state
or federal court of competent jurisdiction sitting in the County of Pinellas,
State of Florida, and all parties hereto agree that venue shall lie therein and
agree to submit themselves to the personal jurisdiction of such court.
14. Attorney's Fees. In any legal proceeding arising out of this Agreement,
including with respect to any instrument, document or agreement made under or in
connection with this Agreement, the prevailing party shall be entitled to
recover its costs and reasonable attorney's fees.
15. Construction. The captions contained in this Agreement are for convenience
of reference only and are not to be considered in construing this Agreement. The
language of this Agreement shall be construed as to its fair meaning and not
strictly for or against any party.
16. Entire Agreement. This Agreement and any related agreements referred to
herein, constitute the entire agreement between the parties with respect to its
subject matter and there are no representations, warranties or agreements
between the parties which are not expressed herein. This Agreement supercedes
and replaces all prior understandings and agreements between the parties hereto,
whether written or oral, expressed or implied, with respect to its subject
matter.
17. Amendment. This Agreement may not be amended, modified, superceded, canceled
or terminated, and any of the matters, covenants, representations, warranties or
conditions hereof may not be waived, except by written instrument executed by
the parties hereto or, in the case of a waiver, by the party to be charged with
such a waiver.
18. Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part. Further, if
a court of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable as written, such court may interpret,
construe, rewrite or revise such provision, to the fullest extent allowed by
law, so as to make it valid and enforceable consistent with the intent of the
parties hereto.
19. Assignment. This Agreement shall not be assignable, in whole or in part, by
either party without the written consent of the other party.
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20. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party hereto
whose signatures appears hereon, and all of which shall together constitute one
and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signature of
all of the parties reflected hereon as the signatories.
21. Default. Should the Company be in default with the payment of any monies
payable under the terms of this agreement, strictly on the due date stipulated
therefore, and remain in such default for a period of seven (7) days after
receiving written notification from the Consultant to make payment, Consultant
shall be entitled to forthwith cancel this agreement without further
notification and to claim all amounts then outstanding in terms of this
agreement. In the event of such cancellation, Consultant shall be entitled to
retain all vested warrants under the terms of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written:
de Jong & Associates Inc.
By _________________________________________________________
Xxxxxx xx Xxxx, President
Medical Technology Systems, Inc.
By:__________________________________________________________
Xxxxxxx Xxxxxx, Vice President and Chief Financial Officer
