CLIENT SERVICE AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of January, 2000,
between CONTINENTAL CAPITAL & EQUITY CORPORATION, a Florida Corporation located
at 000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000, (hereinafter referred
to as "CCEC") and ZiaSun Technologies, Inc., a Nevada Corporation, located at
000 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxx Xxxxx, XX 00000 (hereinafter referred to as
the "Corporation").
WITNESSETH:
A. Whereas, CCEC is a financial relations and direct marketing advertising
firm specializing in the dissemination of information about publicly traded
companies, and
B. Whereas, the Corporation is publicly held with its common stock trading
on the NASD Over the Counter Bulletin Board under the symbol "ZSUN"; and
C. Whereas, the Corporation has filed a Registration Statement on Form
10-SB, pursuant to Section 12(g) of the Securities Exchange Act of 1934. As of
the date of this Agreement, the Registration Statement has become effective but
the Securities and Exchange Commission has not yet reached a position of no
further comments.
D. Whereas, the Corporation desires to publicize itself with the intention
of making its name and business better known to shareholders, investors,
brokerage houses, institutional investors, analysts and other industry
professionals, and
E. Whereas, CCEC is willing to accept the Corporation as a client.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed:
1. ENGAGEMENT. The Corporation hereby engages CCEC to publicize the
Corporation to brokers, prospective investors, institutional investors,
analysts, other industry professionals and shareholders described in Section 2
of this Agreement, and subject to the further provisions of this Agreement. CCEC
hereby accepts the Corporation as a client and agrees to publicize it as
described in Section 2 of this Agreement, but subject to the further provisions
of this Agreement.
2. MARKETING PROGRAM. Consists of the following components:
(A) CCEC will review and analyze various aspects of the Corporation's
goals and make recommendations on feasibility and achievement of desired
goals.
(B) CCEC will review all of the general information and recent filings
of the Corporation and produce a 100,000 piece direct mail package to
include an 11" X 17" self mailer and an ample number of corporate profiles
to provide one profile for each respondent to the original mailing, both
items to be approved by the Corporation prior to circulation
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(C) CCEC will provide exposure to its network of firms and brokers
that may be interested in participating with the Corporation and schedule
and conduct the necessary due diligence and obtain the required approvals
necessary for those firms to participate. CCEC will also interview and make
determinations on any firms or brokers referred by the Corporation with
regard to their participation.
(D) At the Corporation's request, CCEC will be available to the
Corporation to field any calls from firms and brokers inquiring about the
Corporation.
(E) CCEC will use its best efforts to obtain the Corporation exposure
on radio programming, in independent financial newsletters, and through
online fax and Internet broadcast services.
(F) CCEC will promote the Corporation on the Worldwide Internet via
CCEC's home web site (xxx.xxxxxxxxxxxxxxxx.xxx). Further CCEC shall create
banner ads for placement on financial web sites with hyperlinks back to the
Corporation's feature page on CCEC's home web site. The banner ads shall
run for four (4) months.
(G) At the Corporation's request, CCEC shall write, produce and assist
the Corporation in releasing all press announcements. The Corporation shall
be solely responsible for paying all fees associated with the actual
release(s) through BusinessWire, P.R. Newswire, or any other comparable
news dissemination source.
(H) CCEC will create, build and continually enhance a fax database of
all brokers, investors, analysts and media contacts who have expressed an
interest in receiving on-going information on the Corporation. CCEC will
assist the Corporation in setting up an account with a fax broadcasting
agency to manage the actual broadcasting in the event Corporation does not
have this capability in-house. Further, CCEC will, at its election,
mass-fax broadcast select releases to its network of U.S. stockbrokers,
analysts and institutional investors.
(I) CCEC will obtain express written approval from the Corporation on
all material produced by CCEC prior to disseminating such information to
the public.
3. TIME OF PERFORMANCE. Services to be performed under this Agreement shall
commence upon execution of this Agreement and shall continue for a period of
twelve (12) months.
4. COMPENSATION AND EXPENSES. In consideration of the services to be
performed by CCEC, the Corporation agrees to pay compensation to CCEC as
follows:
(A) Cash Compensation. Two hundred fifty thousand dollars
($250,000.00), payable in cash due upon execution of this Agreement.
(B) Warrants. Warrants entitling CCEC to purchase two hundred thousand
(200,000) shares of the Corporation's common stock with the exercise price
based on the Closing Bid of the Common Stock of the Corporation as reported
on the NASD Over the Counter Bulletin Board, as of the date of execution of
this Agreement (the "Closing Bid"), and calculated as follows:
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(i) Round 1. CCEC shall have the right to purchase 50,000 shares
of the Common Stock of the Corporation, at an Exercise Price
equal to one hundred twenty-five percent (125%) of the
Closing Bid;
(ii) Round 2. CCEC shall have the right to purchase 50,000 shares
of the Common Stock of the Corporation, at an Exercise Price
equal to one hundred fifty percent (150%) of the Closing
Bid;
(iii)Round 3. CCEC shall have the right to purchase 50,000
shares of the Common Stock of the Corporation, at an
Exercise Price equal to one hundred seventy-five percent
(175%) of the Closing Bid; and
(iv) Round 4. CCEC shall have the right to purchase 50,000 shares
of the Common Stock of the Corporation, at an Exercise Price
equal to two hundred percent (200%) of the Closing Bid.
(C) Terms of Warrant. The terms and conditions of the Warrant are set
forth in the Warrant attached hereto as Exhibit 1, and incorporated herein
by this reference.
(D) Renewal of Agreement. If Rounds 1 and 2 of the Warrant as set
forth in section 1.3(a) and (b) of the Warrant, are exercised by CCEC, then
CCEC shall automatically be granted a $250,000, 12 month Client Service
Agreement renewal, payable in cash within thirty (30) days of CCEC's
exercise of Round 2 of warrants as set forth in section 1.3(b) of the
Warrant.
(E) Registration Rights for Warrant Shares. The shares issuable upon
exercise of the Warrant shall be subject to certain piggyback and demand
registration rights as set forth in that certain Registration Rights
Agreement, a copy of which is attached hereto as Exhibit 2.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Corporation
represents and warrants to CCEC, each such representation and warranty being
deemed to be material that:
(A) The Corporation will cooperate fully and timely with CCEC to
enable CCEC to perform its obligations under this Agreement.
(B) The execution and performance of this Agreement by the Corporation
has been duly authorized by the Board of Directors of the Corporation in
accordance with applicable law, and, to the extent required, by the
requisite number of shareholders of the Corporation;
(C) The performance by the Corporation of this Agreement will not
violate any applicable court decree, law or regulation, nor will it violate
any provisions of the organizational documents of the Corporation or any
contractual obligation by which the Corporation may be bound.
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(D) The Corporation will promptly deliver to CCEC a complete due
diligence package to include the most recent annual report to Shareholders,
and the most recent quarterly report of the Corporation on Form 10-QSB, the
last six (6) months of press releases and all other relevant materials,
including but not limited to corporate reports, brochures, etc.
(E) The Corporation will promptly deliver to CCEC a list of names and
addresses of all shareholders of the Corporation of which it is aware.
(F) The Corporation will promptly deliver to CCEC a list of brokers
and market makers of the Corporation's securities which have been following
the Corporation.
(G) Because CCEC will rely on such information to be supplied it by
the Corporation, all such information shall be true, accurate, complete and
not misleading, in all respects.
(H) The Corporation will act diligently and promptly in reviewing
materials submitted to it by CCEC to enhance timely distribution of the
materials and will inform CCEC of any inaccuracies contained therein prior
to the projected publication date.
6. DISCLAIMER BY CCEC. CCEC WILL BE THE PREPARER OF CERTAIN PROMOTIONAL
MATERIALS. CCEC MAKES NO REPRESENTATION THAT (A) ITS SERVICE WILL RESULT IN ANY
ENHANCEMENT TO THE COMPANY (B) THE PRICE OF THE COMPANY'S PUBLICLY TRADED
SECURITIES WILL INCREASE, (C) ANY PERSON WILL PURCHASE SECURITIES IN THE
COMPANY, OR (D) ANY INVESTOR WILL LEND MONEY TO OR INVEST IN OR WITH THE
COMPANY.
7. EARLY TERMINATION. If the Corporation fails to cooperate with CCEC, or
fails to make timely payment of the compensation set forth in Section 4 of this
Agreement CCEC shall have the right to terminate any further performance under
this Agreement. In such event all compensation shall become immediately due and
payable and/or deliverable, and CCEC shall be entitled to receive and retain the
same as liquidated damages, and not as a penalty, in lieu of all other remedies,
the parties acknowledging and agreeing that it would be too difficult currently
to determine the exact extent of CCEC's damage, but that the receipt and
retention of such compensation is reasonable present estimate of such damage.
8. LIMITATION OF CCEC LIABILITY. If CCEC fails to perform its services
hereunder, its entire liability to the Corporation shall not exceed the lesser
of (a) the amount of cash compensation CCEC has received from the Corporation
under Section 4 of this Agreement and the gain on any sale of shares issuable
upon exercise of the Warrants, or (b) the actual damage to the Corporation as a
result of such non-performance. IN NO EVENT WILL CCEC BE LIABLE FOR ANY
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INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES NOR FOR ANY CLAIM AGAINST THE COMPANY
BY ANY PERSON OR ENTITY ARISING FROM OR IN ANY WAY RELATED TO THIS AGREEMENT,
UNLESS SUCH DAMAGES RESULT DIRECTLY OR INDIRECTLY FROM MISSTATEMENTS,
MISREPRESENTATIONS, OMISSIONS BY CCEC OR FROM THE USE OR PUBLICATION, BY CCEC,
OF INFORMATION NOT AUTHORIZED IN WRITING BY THE COMPANY, FOR USE OR PUBLICATION.
9. OWNERSHIP OF MATERIALS. Upon the initial payment by the Corporation to
CCEC as set forth in section 4(A) above, all right, title and interest in and to
materials to be produced by CCEC in connection with this contract and other
services to be rendered under this Agreement shall be the sole and exclusive
property of the Corporation.
10. CONFIDENTIALITY. Until such time as the same may become publicly known,
CCEC agrees that any information of a confidential nature will not be revealed
or disclosed to any person or entity, except in the performance of this
Agreement, and upon completion of its services and upon written request of the
Corporation all materials and original documentation provided by the Corporation
will be returned to it. CCEC will, however, require Confidentiality Agreements
from its own employees and from contractors CCEC reasonably believes will come
in contact with confidential material.
11. NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third (3rd) business day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered or certified,
postage prepaid, and properly addressed as follows:
If to the Corporation, addressed to it at: If to CCEC, addressed to it at:
----------------------------------------- ------------------------------
Xx. Xxxxx X. Xxxxxxx Executive Vice President Xx. Xxxxx Xxxxxx
ZiaSun Technologies, Inc. 000 Xxxxxx Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx Xxxxx 000
Xxxxx 000 Xxxxxxxx, XX 00000
Xxxxxx Xxxxx, XX 00000
12. SEVERABILITY. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.
13. ARBITRATION. Any controversy or claim arising out of or relating to the
Client Service Agreement, or the breach thereof, shall be settled by arbitration
in accordance with the commercial arbitration rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
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14. MISCELLANEOUS.
(A) Governing Law; Choice of Forum. This Agreement shall be governed
by and construed in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within such
State and without regard to its choice of law principles. All parties
hereto (i) consents to submit itself to the personal jurisdiction of any
federal court located in the State of California or any California state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (ii) agrees that Venue for any
such dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement shall be any federal court located in the
State of California or any California state court, (iii) agrees that they
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (iv) agrees that it will
not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court
sitting in the State of California or a California state court.
(B) Currency. In all instances, references to dollars shall be deemed
to be United States Dollars.
(C) Counterparts and/or Facsimile Signature This Agreement may be
executed in any number of counterparts, including counterparts transmitted
by telecopier or FAX, any one of which shall constitute an original of this
Agreement. When counterparts of facsimile copies have been executed by all
parties, they shall have the same effect as if the signatures to each
counterpart or copy were upon the same document and copies of such
documents shall be deemed valid as originals. The parties agree that all
such signatures may be transferred to a single document upon the request of
any party.
Executed as of the date and year first above written.
ZiaSun Technologies, Inc.
Dated: 01/14/2000 /S/ D. Xxxxx Xxxxx
-----------------------------------
By: D. Xxxxx Xxxxx
Its: Chairman and CEO
Dated: 01/14/2000 /S/ Xxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxxx
Its: Executive Vice President
Continental Capital & Equity Corporation
Dated: 01/14/2000 /S/ Xxxx X. Xxxxxx
-----------------------------------
By: Xxxx X. Xxxxxx
Its: Chief Operating Officer
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