INDEPENDENT CONSULTING AGREEMENT
This
Independent Consulting Agreement (“Agreement”), effective as of the 28th day of
September, 2007 (“Effective Date”) is entered into by and between CAPITAL
GROWTH SYSTEMS, INC.,
a
Florida corporation (herein referred to as the “Company”) and XXXXXXXXX
FINANCIAL COMMUNICATIONS, INC.,
an
Oregon corporation (herein referred to as the “Consultant”).
RECITALS
WHEREAS,
the
Company is a publicly-held corporation with its common stock traded on the
NASDAQ OTCBB
WHEREAS,
Company
desires to engage the services of Consultant to represent the Company in
investors' communications and public relations with existing shareholders,
brokers, dealers and other investment professionals as to the Company's current
and proposed activities, and to consult with management concerning such Company
activities;
NOW
THEREFORE,
in
consideration of the promises and the mutual covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
1.
Term
of Consultancy. Company hereby agrees to retain the Consultant to act in a
consulting capacity to the Company, and the Consultant hereby agrees to provide
services to the Company commencing immediately and ending on September 27,
2008,
unless otherwise terminated earlier as provided herein.
2.
Duties
of Consultant. The Consultant agrees that it will generally provide the
following specified consulting services through its officers and employees
during the term specified in Section 1, above.
(a) Consult
with and assist the Company in developing and implementing appropriate plans
and
means for presenting the Company and its business plans, strategy and personnel
to the financial community, establishing an image for the Company in the
financial community, and creating the foundation for subsequent financial
public
relations efforts;
(b) Introduce
the Company to the financial community, including, but not limited to, retail
brokers, buy side and sell side institutional managers, portfolio managers,
analysts, and financial public relations professionals;
(c) With
the
cooperation of the Company, maintain an awareness during the term of this
Agreement of the Company's plans, strategy and personnel, as they may evolve
during such period, and consult and assist the Company in communicating
appropriate information regarding such plans, strategy and personnel to the
financial community;
(d) Assist
and consult the Company with respect to its (i) relations with stockholders,
(ii) relations with brokers, dealers, analysts and other investment
professionals, and (iii) financial public relations generally;
(e) Perform
the functions generally assigned to stockholder relations and public relations
departments in major corporations, including responding to telephone and
written
inquiries (which may be referred to the Consultant by the Company); reviewing
press releases before they are released by the Company as well as reports
and
other communications with or to shareholders, the investment community and
the
general public; consulting with respect to the timing, form, distribution
and
other matters related to such releases, reports and communications; and,
at the
Company’s request and subject to the Company’s securing its own rights to the
use of its names, marks, and logos, consulting with respect to corporate
symbols, logos, names, the presentation of such symbols, logos and names,
and
other matters relating to corporate image;
(f) Upon
and
with the Company's direction and written approval, disseminate information
regarding the Company to shareholders, brokers, dealers, other investment
community professionals and the general investing public;
(g) Upon
and
with the Company's direction, conduct meetings, in person or by telephone,
with
brokers, dealers, analysts and other investment professionals to communicate
with them regarding the Company's plans, goals and activities, and assist
the
Company in preparing for press conferences and other forums involving the
media,
investment professionals and the general investment public;
(h) At
the
Company's request, review business plans, strategies, mission statements
budgets, proposed transactions and other plans for the purpose of advising
the
Company of the public relations implications thereof; and
(i) Otherwise
perform as the Company's consultant for public relations and relations with
financial professionals.
3. Allocation
of Time and Energies. The Consultant hereby promises to perform and
discharge faithfully the responsibilities which may be assigned to the
Consultant from time to time by the officers and duly authorized representatives
of the Company in connection with the conduct of its financial and public
relations and communications activities, so long as such activities are in
compliance with applicable securities laws and regulations. Consultant and
staff
shall diligently and thoroughly provide the consulting services required
hereunder. Although no specific hours-per-day requirement will be required,
Consultant and the Company agree that Consultant will perform the duties
set
forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort
to be
expended and the costs to be incurred by the Consultant and the benefits
to be
received by the Company are expected to occur within or shortly after the
first
two months of the effectiveness of this Agreement. It is explicitly understood
that neither the price of the Company’s Common Stock, nor the trading volume of
the Company’s common stock hereunder measure Consultant’s performance of its
duties. It is also understood that the Company is entering into this Agreement
with Consultant, a corporation and not any individual member or employee
thereof, and, as such, Consultant will not be deemed to have breached this
Agreement if any member, officer or director of the Consultant leaves the
firm
or dies or becomes physically unable to perform any meaningful activities
during
the term of the Agreement, provided the Consultant otherwise performs its
obligations under this Agreement.
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4. Remuneration.
(a) (i) For
undertaking this engagement, for previous services rendered, and for other
good
and valuable consideration, the Company agrees to issue, or have issued,
to the
Consultant a “Commencement Bonus” of Five Million (5,000,000) shares of the
Company’s Common Stock (“Common Stock” and such shares, collectively, the
“Shares”). This Commencement Bonus shall be fully paid and non-assessable and
stock certificates representing the Commencement Bonus shall be issued and
delivered to Consultant within 30 days of execution of this Agreement.
Additionally the Company agrees to pay Consultant the sum of $6000.00 cash
per
month due and payable on the 1st of each month of this Agreement.
(ii) Consultant
agrees that the Company may, in its sole discretion, cause one or more
shareholders of the Company to deliver any of or all of the Shares to be
issued
and delivered to Consultant hereunder.
(b) The
Company understands and agrees that Consultant has foregone significant
opportunities to accept this engagement and that the Company derives substantial
benefit from the execution of this Agreement and the ability to announce
its
relationship with Consultant. The Commencement Bonus, therefore, constitutes
payment for Consultant’s agreement to consult to the Company and is a
nonrefundable, non-apportionable, and non-ratable retainer and is not a
prepayment for future services. If the Company decides to terminate this
Agreement prior to September 27, 2008, for any reason whatsoever, it is agreed
and understood that Consultant will not be requested or demanded by the Company
to return any of the shares of Common Stock paid to it as Commencement Bonus
referred to in Section 4(a)(i) hereunder. Further, if and in the event
the Company is acquired during the term of this Agreement, it is agreed and
understood Consultant will not be requested or demanded by the Company to
return
any of the shares of Common Stock paid to it hereunder. Consultant agrees
and
understands that if during the term of this Agreement, Consultant performs
substantial services for any direct competitor of the Company, then the Shares
issued to Consultant hereunder will be forfeited.
(c) The
Company agrees that if in the opinion of its counsel it is more likely than
not
that the Securities & Exchange Commission will permit the registration of a
sufficient number of shares on a resale prospectus as would permit the
registration of shares issued to Consultant pursuant to this Agreement after
giving effect to the registration of all shares of common stock either
outstanding or underlying options or warrants, where the owners of such other
securities have an existing right for registration for said shares (as of
the
date of execution of this Agreement), then the Company will use good faith
efforts to register the shares issued to Consultant hereunder with respect
to
such registration statement (subject to no obligation to register shares
issuable hereunder to Consultant at any time following eligibility for sale
of
any of such shares under Rule 144). Consultant agrees that it will not sell
or
transfer any of these Shares issued to it hereunder prior to the earlier
of
September 27, 2008 or the termination of this Agreement by the Company.
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(d) Company
warrants that the Shares issued to Consultant under this Agreement by the
Company shall be or have been validly issued, fully paid and non-assessable
and
that the Company’s board of directors has or shall have duly authorized the
issuance and any transfer of them to Consultant.
(e) Consultant
acknowledges that the Shares to be issued pursuant to this Agreement have
not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”) and accordingly are “restricted securities” within the meaning of Rule 144
of the Act. As such, the Shares may not be resold or transferred unless the
Company has received an opinion of counsel and in form reasonably satisfactory
to the Company that such resale or transfer is exempt from the registration
requirements of that Securities Act. Consultant agrees that during the term
of
this Agreement, that it will not sell or transfer any of the Shares issued
to it
hereunder, except to the Company; nor will it pledge or assign such Shares
as
collateral or as security for the performance of any obligation, or for any
other purpose.
(f) In
connection with the acquisition of the Shares, Consultant represents and
warrants to Company, to the best of its/his knowledge, as follows:
(i) Consultant
has been afforded the opportunity to ask questions of and receive answers
from
duly authorized officers or other representatives of the Company concerning
an
investment in the Shares, and any additional information that the Consultant
has
requested.
(ii) Consultant’s
investment in restricted securities is reasonable in relation to the
Consultant’s net worth. Consultant has had experience in investments in
restricted and publicly traded securities, and Consultant has had experience
in
investments in speculative securities and other investments that involve
the
risk of loss of investment. Consultant acknowledges that an investment in
the
Shares is speculative and involves the risk of loss. Consultant has the
requisite knowledge to assess the relative merits and risks of this investment
without the necessity of relying upon other advisors, and Consultant can
afford
the risk of loss of his entire investment in the Shares. Consultant is an
accredited investor, as that term is defined in Regulation D promulgated
under
the Securities Act.
(iii) Consultant
is acquiring the Shares for the Consultant’s own account for long-term
investment and not with a view toward resale or distribution thereof except
in
accordance with applicable securities laws.
5. Intentionally
Deleted.
6. Intentionally
Deleted.
7. Non-Assignability
of Services. Consultant’s services under this contract are offered to
Company only and may not be assigned by Company to any entity with which
Company
merges or which acquires the Company or substantially all of its assets wherein
the Company becomes a minority constituent of the combined Company. In the
event
of such merger or acquisition, all compensation to Consultant herein under
the
schedules set forth herein shall remain due and payable, and any compensation
received by the Consultant may be retained in the entirety by Consultant,
all
without any reduction or pro-rating and shall be considered and remain fully
paid and non-assessable. Notwithstanding the non-assignability of Consultant’s
services, Company shall assure that in the event of any merger, acquisition,
or
similar change of form of entity, that its successor entity shall agree to
complete all obligations to Consultant, including the provision and transfer
of
all compensation herein, and the preservation of the value thereof consistent
with the rights granted to Consultant by Company herein. Consultant shall
not
assign its rights or delegate its duties hereunder without the prior written
consent of Company.
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8. Expenses.
Consultant agrees to pay for all its expenses (phone, labor, etc.), other
than
extraordinary items (travel and entertainment required by/or specifically
requested by the Company, luncheons or dinners to large groups of investment
professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, print advertisements in publications,
etc.) approved by the Company prior to its incurring an obligation for
reimbursement. The Company agrees and understands that Consultant will not
be
responsible for preparing or mailing due diligence and/or investor packages
on
the Company, and that the Company will have some means to prepare and mail
out
investor packages at the Company’s expense.
9. Indemnification.
The Company warrants and represents that all oral communications, written
documents or materials furnished to Consultant or the public by the Company
with
respect to financial affairs, operations, profitability and strategic planning
of the Company are accurate in all material respects and Consultant may rely
upon the accuracy thereof without independent investigation. The Company
will
protect, indemnify and hold harmless Consultant against any claims or litigation
including any damages, liability, cost and reasonable attorney's fees as
incurred with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials excluding any
such
claims or litigation resulting from Consultant's communication or dissemination
of information not provided or authorized by the Company.
10. Representations.
Consultant represents that it is not required to maintain any licenses and
registrations under federal or any state regulations necessary to perform
the
services set forth herein. Consultant acknowledges that, to the best of its
knowledge, the performance of the services set forth under this Agreement
will
not violate any rule or provision of any regulatory agency having jurisdiction
over Consultant. Consultant acknowledges that, to the best of its knowledge,
Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC
or
securities laws. Consultant further acknowledges that it is not a security
Broker Dealer or a registered investment advisor. Company acknowledges that,
to
the best of its knowledge, that it has not violated any rule or provision
of any
regulatory agency having jurisdiction over the Company. Company acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC
or
securities laws.
11. Legal
Representation. Each of Company and Consultant represents that they have
consulted with independent legal counsel and/or tax, financial and business
advisors, to the extent that they deemed necessary.
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12. Status
as Independent Contractor. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer
or
other agent of the Company. Neither party to this Agreement shall represent
or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges the consideration provided hereinabove is a gross amount of
consideration and that the Company will not withhold from such consideration
any
amounts as to income taxes, social security payments or any other payroll
taxes.
All such income taxes and other such payment shall be made or provided for
by
Consultant and the Company shall have no responsibility or duties regarding
such
matters. Neither the Company nor the Consultant possesses the authority to
bind
each other in any agreements without the express written consent of the entity
to be bound.
13. Attorney's
Fee. If any legal action or any arbitration or other proceeding is brought
for the enforcement or interpretation of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with
or
related to this Agreement, the successful or prevailing party shall be entitled
to recover reasonable attorneys' fees and other costs in connection with
that
action or proceeding, in addition to any other relief to which it or they
may be
entitled.
14. Waiver.
The waiver by either party of a breach of any provision of this Agreement
by the
other party shall not operate or be construed as a waiver of any subsequent
breach by such other party.
15. Notices.
All notices, requests, and other communications hereunder shall be deemed
to be
duly given if sent by U.S. mail, postage prepaid, addressed to the other
party
at the address as set forth herein below:
|
To
the Company:
|
Capital
Growth Systems, Inc.
Attention: Xxxxxxx
X. Xxxxx, CEO
000
Xxxxx Xxxxxx Xxxxx - Xxxxx 000
Xxxxxxx,
XX 00000
Facsimile: (000)
000-0000
E-Mail: XXxxxx@xxxxxxxxxxxxxx.xxx
|
|
To
the Consultant:
|
Xxxxxxxxx
Financial Communications, Inc.
Attention: Xxxxxxx
X. Xxxxxxxxx, President
0000
XX Xxxxxxxxxxx Xxxx - Xxxxx 000
Xxxx
Xxxx, XX 00000
Facsimile: (000)
000-0000
E-Mail: Xxxx@xxxxxx.xxx
|
It is understood that either party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in the manner set forth in this Section 15.
16. Choice
of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the Oregon. The parties
agree that Clackamas County, Oregon will be the venue of any dispute and
will
have jurisdiction over all parties.
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17. Arbitration.
Any controversy or claim arising out of or relating to this Agreement, or
the
alleged breach thereof, or relating to Consultant's activities or remuneration
under this Agreement, shall be settled by binding arbitration in Clackamas,
Oregon in accordance with the applicable rules of the American Arbitration
Association, Commercial Dispute Resolution Procedures, and judgment on the
award
rendered by the arbitrator(s) shall be binding on the parties and may be
entered
in any court having jurisdiction.
18. Complete
Agreement. This Agreement contains the entire agreement of the parties
relating to the subject matter hereof. This Agreement and its terms may not
be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification, extension or discharge
is
sought.
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remainder of this page is intentionally left blank]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
AGREED
TO:
Company:
CAPITAL
GROWTH SYSTEMS INC.
By:
__________________________________
Name: Xxxxxxx
Xxxxx
Title: CEO
Date
of
Execution:_______________________
Consultant:
XXXXXXXXX
FINANCIAL COMMUNICATIONS, INC.
By:
__________________________________
Name: Xxxxxxx
X. Xxxxxxxxx
Title: President
and its Duly Authorized
Agent
Date
of
Execution:___________________________
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