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OTC COMMUNICATIONS CORP. CONSULTING AGREEMENT
AGREEMENT made as of the 15th day of June, 1998 by and between Redneck Foods,
Inc., maintaining its principal offices at 00 Xxxxxx Xxxxx Xx., Xxxxxxxxx, XX
00000 (hereinafter referred to as "Client" and OTC Communications Corp., a
Commonwealth of Massachusetts corporation maintaining its principal offices
at 0000 Xxxxx Xxxxx Xxx, Xxxxxxx, XX 00000 (hereinafter referred to as the
"Company").
WITNESSETH:
WHEREAS, Company is engaged in the business of providing and rendering
public relations and communications services and has knowledge, expertise and
personnel to render the requisite services to Client; and
WHEREAS, Client is desirous of retaining Company for the purpose of obtaining
public relations and corporate communications services so as to better, more
fully and more effectively deal and communicate with its shareholders and the
investment banking community.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
and agreements contained herein, it is agreed as follows:
I. Engagement of Company. Client herewith engages Company and Company
agrees to render to Client public relations, communications, advisory and
consulting services.
A. The consulting services to be provided by the Company shall include,
but are not limited to, the development, implementation and maintenance of an
ongoing program to increase the investment community's awareness of Client's
activities and to stimulate the investment community's interest in Client.
Client acknowledges that Company's ability to relate information regarding
Client's activities is directly related to the information provided by Client
to the Company.
B. Client acknowledges that company will devote such time as is
reasonably necessary to perform the services for Client, having due regard
for Company's commitments and obligations to other businesses for which it
performs consulting services.
II. Compensation and Expense Reimbursement.
A. Client will pay the Company, as compensation for the services
provided for in the Agreement and as reimbursement for expenses incurred by
Company on Client's behalf, in the manner set forth in Schedule A annexed to
this Agreement which Schedule is incorporated herein by reference.
B. In addition to the compensation and expense reimbursement referred
to in Section 2(A) above, company shall be entitled to receive from Client a
"Transaction Fee", as a result of any Transaction (as described below)
between Client and any other company, entity, person, group or persons or
other party which is introduced to, or put in contact with, Client by
Company, or by which Client has been introduced to, or has been put in
contact with, by Company. A "Transaction" shall mean merger, sale of stock,
sale of assets, consolidation or other similar transaction or series or
combination of transactions whereby Client or such other party transfer to
the other, or both transfer to a third entity or person, stock, assets, or
any interest in its business in exchange for stock, assets, securities, cash
or other valuable property or rights, or wherein they make a contribution of
capital or services to a joint venture, commonly owned enterprise or business
opportunity with the other for purposes of future business operations and
opportunities. To be a Transaction covered by this section, the transaction
must occur during the term of this Agreement or the one year period following
the expiration of this Agreement.
The calculation of a Transaction Fee shall be based upon the total value of
the consideration, securities, property, business, assets or other value
give, paid, transferred or contributed by, or to, the Client and shall equal
5% of the dollar value of the Transaction. Such fee shall be paid by
certified funds at the closing of the Transaction.
Term and Termination. This Agreement shall be for a period of one year
commencing June 15, 1998 and terminating May, 14, 1999. If the Client does
not cancel the contract during the term, the contract will be automatically
extended for an additional year. Either party hereto shall have the right to
terminate this Agreement upon 30 days prior written notice to the other
party.
Treatment of Confidential Information. Company shall not disclose, without
the consent of Client, any financial and business information concerning the
business, affairs, plans and programs of Client which are delivered by client
to Company in connection with company's services hereunder, provided such
information is plainly and prominently marked in writing by Client as being
confidential (the "Confidential Information"). The Company will not be bound
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by the foregoing limitation in the event (i) the Confidential Information is
otherwise disseminated and becomes public information or (ii) the company is
required to disclose the Confidential Informational pursuant to a subpoena or
other judicial order.
Representation by Company of other clients. Client acknowledges and consents
to Company rendering public relations, consulting and/or communications
services to other clients of the Company engaged in the same or similar
business as that of Client.
Indemnification by Client as to Information Provided to Company. Client
acknowledges that Company, in the performance of its duties, will be required
to rely upon the accuracy and completeness of information supplied to it by
Client's officers, directors, agents and/or employees. Client agrees to
indemnify, hold harmless and defend Company, its officers, agents and/or
employees from any proceeding or suit which arises out of or is due to the
inaccuracy or incompleteness of any material or information supplies by
Client to Company.
Independent Contractor. It is expressly agreed that company is acting as an
independent contractor in performing its services hereunder. Client shall
carry no workers compensation insurance or any health or accident insurance
on Company or consultant's employees. Client shall not pay any contributions
to social security, unemployment insurance, Federal or state withholding
taxes nor provide any other contributions or benefits which might be
customary in an employer-employee relationship.
Non-Assignment. This agreement shall not be assigned by either party without
the written consent of the other party.
Notices. Any notice to be given by either party to the other hereunder shall
be sufficient if in writing and sent by registered or certified maid, return
receipt requested, addressed to such party at the address specified on the
first page of this Agreement or such other address as either party may have
given to the other in writing.
Entire Agreement. The within agreement contains the entire agreement and
understanding between the parties and supersedes all prior negotiations,
agreements and discussions concerning the subject matter hereof.
Modification and Waiver. This Agreement may not be altered or modified
except by writing signed by each of the respective parties hereof. No breach
or violation of this Agreement shall be waived except in writing executed by
the party granting such waiver.
Law to Govern; Forum for Disputes. This Agreement shall be governed by the
laws of the Commonwealth of Massachusetts without giving effect to the
principle of conflict of laws. Each party acknowledges to the other that
courts within the City of Boston, Massachusetts shall be the sole and
exclusive forum to adjudicate any disputes arising under this agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
OTC Communications, Corp.
By: Xxxxxxxx Xxxxx, President
Redneck Foods, Inc.
By: Xxxxx Xxxxxx, Authorized Agent
SCHEDULE A - 1 Payment for services and reimbursement of expenses.
SCHEDULE A - 2 Grant of options in advance of services rendered and
reimbursement of expenses
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SCHEDULE A-1
PAYMENT FOR SERVICES
AND REIMBURSEMENT OF EXPENSES
A. For the services to be rendered and performed by Company during the
term of the Agreement, Client shall pay to Company the sum of $5,000 per
month, payable on the first day of each month.
B. Client shall also reimburse Company for all reasonable and necessary
out-of-pocket expenses incurred in the performance of its duties for Client
upon presentation of statements setting forth in reasonable detail the amount
of such expenses. Company shall not incur any expense for any single item in
excess of $250 either verbally or written except upon the prior approval of
the Client. Company agrees that any travel, entertainment or other expense
which it may incur and which may be referable to more than one of its clients
(including Client) will be prorated among the clients for whom such expense
has been incurred.
OTC Communications, Corp.
By: Xxxxxxxx Xxxxx, President
Redneck Foods, Inc.
By: Xxxxx Xxxxxx, Authorized Agent.
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SCHEDULE A-2
GRANT OF OPTIONS TO OTC COMMUNICATIONS CORP. IN ADVANCE OF SERVICES RENDERED
X. Xxxxx of Options and Option Exercise Price. As compensation for the
services to be rendered by Company hereunder, Client herewith issues and
grants to Company stock options (the "Options") to purchase and aggregate of
100,000 shares of Client's Common Stock at an exercise price of $3.00 per
share. The Options are exercisable upon and subject to the terms and
conditions contained herein. The Options are exercisable during the period
commencing on the date hereof and ending three years subsequent to the
termination date of this Agreement.
B. Manner of Exercise. Exercise of any of the Options by Company shall
be by written notice to Client accompanied by company's certified or bank
check for the purchase price of the shares being purchased. Upon receipt of
such notice and payment, Client shall promptly cause to be issued , without
transfer or issue tax to the option holder or other person entitled to
exercise the option, the number of shares for which the Option has been
exercised, registered in the name of Company. Such shares, when issued,
shall be fully paid and non-assessable.
C. Option Shares. Company acknowledges that any shares which it may
acquire from Client pursuant to the exercise of the Options provided for
herein will not have been registered pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), and therefore may not be sold or
transferred by Company except in the event that such shares are the subject
of a registration statement or any future sale or transfer in, in the opinion
of counsel for client, exempt from such registration provisions. Company
acknowledges that any shares which it may acquire pursuant to the exercise of
the Options sill be for its own account and for investment purposes only and
not with a view to the resale or redistribution of same. Company further
consents that the following legend be place upon all certificates for shares
of Common Stock which may be issued to Company upon the exercise of the
Options:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AMENDED (THE "ACT") AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED."
Company further consents that no stop transfer instructions being placed
against all certificates may not be issued to it upon the exercise of the
Options.
(i) Upon the written demand of the Company, the Client shall file a
Registration Statement under the Securities Act, covering the Shares issuable
upon exercise of the Options to the extent the Shares qualify for
registration. The Client shall bear all costs and expenses attributable to
such registration, excluding fees and expenses of Company's counsel and any
underwriting or selling commission. Client shall maintain the effectiveness
of such registration throughout the term of this Agreement and for a 120 day
period thereafter.
(ii) Notwithstanding the foregoing, if the Shares issuable upon exercise
of the Options are not otherwise registered under the Securities Act and the
Client shall at any time after the date hereof propose to file a registration
statement under the Securities Act, which registration statement shall
include shares of Common Stock of Client or any selling shareholder, Client
shall give written notice to Company of such proposed registration and will
permit Company to include in such registration all Shares which it has
acquired as of the date of such notice. The Client shall bear all costs and
expenses attributable to such registration, excluding fees and expenses of
Company's counsel and any underwriting or selling commission
D. Adjustment in Option Shares.
(i) In the event that Client shall at any time sub-divide its
outstanding shares of Common Stock into a greater number of shares, the
Option purchase price in effect prior to such sub-division shall be
proportionately reduced and the number of shares of Common Stock purchasable
shall be proportionately increased. In case the outstanding shares of Common
Stock of Client shall be combined into smaller number of shares, the Option
purchase price in effect immediately prior to such combination shall be
proportionately increased and the number of shares of Common Stock
purchasable shall be proportionately reduced.
(ii) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of this Option(other than change in par
value, or from par value to no par value, or from no par value to par value,
or as a result or a subdivision or combination), or in case of any
consolidation or merger of the client with or into another corporation (other
than a merger in which the Client is the continuing corporation and which
does not result in any reclassification or change of outstanding shares of
Common Stock, other than a change in number of the shares useable upon
exercise of the Option) or in case of any sale or conveyance to another
corporation of the property of the Client as an entirety or substantially as
an entirety, the Holder of this Option shall have the right thereafter to
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exercise this Option into the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock of the Client for which the Option might have been exercised
immediately prior to such reclassification, change, consolidation, merger,
sale or conveyance. The above provisions shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
OTC Communications Corp.
By: Xxxxxxxx Xxxxx, President
Redneck Foods, Inc.
By: Xxxxx Xxxxxx, Authorized Agent
* In addition to the compensation mentioned in Schedule A-1, OTC
Communications will receive the options in Schedule A-2. Fifty percent (50%)
of any profits OTC receives through the exercising of options will be
credited to the client's account while this contract is in force. However,
the amount of options exercised will be replaced by the client with the same
number of options, at an exercise price equal to the current market price of
the stock at the time of the exercise. If the contract is canceled by the
client, any credit with the client will become an asset of OTC Communications
and any unexercised options remaining will remain an asset of the OTC three
years subsequent to the termination of this agreement.
