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EXHIBIT 10.1
FINANCIAL CONSULTING AGREEMENT
AGREEMENT made as of this 2nd day of June 1997 by and between THE
WIDECOM GROUP INC. (the "Company") with an address at 00 Xxxx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxx Xxxxxx X0X 0X0 and XXXX XXXXX & CO. (the "Consultant"),
with address at 3333 New Hyde Xxxx Xxxx, Xxx Xxxx Xxxx, Xxx Xxxx 00000.
WITNESSETH
WHEREAS, the Company desires to retain the Consultant to provide
on-going financial services; and
WHEREAS, the Consultant desires to be retained to render such services.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
1. The Company hereby retains the Consultant and the Consultant hereby
accepts such retention to perform consulting services related to;
(a) assisting in finding acquisitions, joint ventures and/or developing
business opportunities;
(b) upon request, assisting in the preparation of capital and operating
expense budgets and business plans for the Company;
(c) analyzing forecasts of cash flow and income for the company and
advising with respect to significant variances from forecasts and budgets;
(d) analyzing the company's short and long term debt position and its
capital requirements;
(e) analyzing potential merger and acquisition candidates for the
Company;
(f) assisting the Company in the structuring of any required
financings, including but not limited to, the determination of whether any such
financing should be for equity or debt securities of the Company or a
combination thereof;
(g) assisting the Company in screening, evaluating, and recommending
commercial and investment bankers, underwriters and
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professional, consultants in order to carry out the Company's goals, including
but not limited to, when necessary, finding an appropriate direct source or
broker-dealer to raise sufficient capital for working capital purposes and/or
proposed mergers or acquisitions through the public or private placement of
securities of the Company or a combination thereof, or directly placing such
securities with a private group;
(h) advising the Company on the preparation of appropriate
presentations and documents to consummate any desired financing, acquisition or
merger; and
(i) establishing and fostering relationships between the Company and
the financial community, including brokers, investment bankers, financial
analysts, institutional investors and stockholders.
In regard to the foregoing, subject to the terms set forth below, the
Consultant shall furnish to the Company advice and recommendations with respect
to such aspects of the business and affairs of the Company as the Company shall,
from time to time, reasonably request upon no less than three business days
notice, unless the Consultant agrees to a lesser amount of notice for specific
requested services hereunder.
2. In addition, the consultant shall hold itself ready to assist the
Company in negotiating particular contracts or transactions, if requested to do
so by the Company upon reasonable notice. Nothing herein shall require the
company to utilize the Consultant's services in any particular transaction nor
shall it limit the Company's obligations arising under any other agreement or
understanding.
3. For the services described in paragraph 1 above, the Company shall:
(a) pay to the Consultant a monthly fee of $1,000 for the full term of
twelve months from the date hereof (the "Initial Term"), payable monthly in
advance.
(b) grant two Tranches of Warrants to the consultant to purchase shares
of Common Stock. The Warrants shall be non- assignable (except that 15% of the
number of Warrants can be assigned to a designee of the Consultant) and
exercisable as follows: (i) Tranch 1 - 146,000 Warrants to purchase a like
number of shares of the Company's Common Stock at a price of $3.50 per share.
The exercise period for these Warrants shall expire six months from the
Effective Date of the Registration Statement referable thereto; and (ii) Tranch
II - 146,000 Warrants to purchase a like number of shares of the Company's
common Stock at a price of $2.50 per share. The exercise period for Tranch II
Warrants shall commence after the exercise of the Tranch I Warrants
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and expire one year from the Effective Date of the Registration Statement
referable thereto. The Company agrees, at its sole expense, to use its best
efforts to cause the Common Stock underlying the 146,000 Tranch I Warrants
referred to in this subsection to become registered as soon as may be
practicable under the Securities Act of 1933, as amended (the "Act"). The
Company agrees, at its sole expense, to use its best efforts to cause the Common
Stock underlying the 146,000 Tranch II Warrants to become registered under the
Securities Act of 1933, as amended (the "Act"). Nevertheless, the Company may
defer the filing of the Registration Statement referable to the Tranch II
Warrants for up to sixty days following the Effective Date of the Registration
Statement referable to the Tranch I Warrants. The Company further agrees that it
will keep the Registration Statement current during such time as the Warrants
may be exercised.
(c) In additional to its monthly compensation hereunder, the Company
will reimburse the consultant for any and all reasonable expenses incurred by
the Consultant in the performance of its duties hereunder, and the Consultant
shall account for such expenses to the Company; provided, however, that any
expenses in excess of $250 shall require the prior written approval of the
Company. Such reimbursement shall accumulate and be paid monthly.
4. All obligations of the Consultant contained herein shall be subject
to the Consultant's reasonable availability for such performance, in view of the
nature of the requested service and the amount of notice received. The
Consultant shall devote such time and effort to the performance of its duties
hereunder as it shall deem appropriate. The Company shall furnish to the
Consultant all information relevant to the performance by the Consultant of its
obligations under this Agreement, or particular project as to which the
Consultant is acting as advisor, which will permit the Consultant to know all
facts material to the advice to be rendered, and all material or information
reasonably requested by the Consultant. In the event that the company fails or
refuses to furnish any such material or information reasonably requested by the
Consultant, and thus prevents or impedes the Consultant's performance hereunder,
any inability of the Consultant to perform shall not be a beach of its
obligations hereunder.
5. Nothing contained in this Agreement shall limit or restrict the
right of the no less than three business days' notice, unless the Consultant or
of any partner, employee, agent or representative of the consultant, to be a
partner, director, officer, employee, agent or representative of, or to engage
in, any other business, whether of a similar nature or not, nor to limit or
restrict the right of the consultant to render services of any kind to any other
corporation, firm, individual or association, provided such entity is not a
direct competitor of the Company.
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6. The Consultant will hold in confidence any confidential information
which the company provides to the Consultant pursuant to this Agreement unless
the company gives the Consultant permission in writing to disclose such
confidential information to a specific third party. In addition, all
confidential information which the Company previously provided Consultant shall
be considered confidential information for purposes of this Agreement. The
Consultant shall not transfer or otherwise disseminate any such confidential
information to third persons without such persons signing confidentiality
agreements similar to this Paragraph 6. Notwithstanding the foregoing, the
consultant shall not be required to maintain confidentiality with respect to
information which (i) is or becomes part of the public domain; (ii) it had
independent knowledge prior to disclosure; (iii) comes into the possession of
the Consultant in the normal and routine course of his own business from and
through independent non-confidential sources; or (iv) is required to be
disclosed by the Consultant by governmental requirements. If the Consultant is
requested or required (by oral questions, interrogatories, requests for
information or document subpoenas, civil investigative demands, or similar
process) to disclose any confidential information supplied to it by the Company,
or the existence of other negotiations in the course of his dealings with the
Company or its representatives, the Consultant shall, unless prohibited by law,
promptly notify the Company of such request(s) so that the Company may seek an
appropriate protective order.
7. The Company and the Consultant agree to indemnify and hold each
other harmless for their respective acts and omissions, alleged or actual,
including their respective partners, employees, agents, representatives and
controlling persons (and the officers, directors, employees, agents,
representatives and controlling persons of the Company) from and against any and
all losses, claims in respect thereof) and any legal or other expenses in giving
testimony or furnishing documents in respect to a subpoena or otherwise
(including, without limitation, the cost of investigating, preparing or
defending any such action, suit, proceeding or claim, whether or not in
connection with any action, suit, proceeding or claim in which the Consultant or
the Company is a party), as and when incurred, directly or indirectly, caused
by, relating to, based upon or arising out of the consultant's service pursuant
to this Agreement. This paragraph shall survive the termination of this
Agreement.
8. This Agreement may not be transferred, assigned or delegated by any
of the parties hereto without the prior written consent of the other party
hereto.
9. The failure or neglect of the parties hereto to insist, in any one
or more instances, upon the strict performance of any of the terms or conditions
of this Agreement, or their waiver of strict performance of any of the terms or
conditions of
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this Agreement, shall not be construed as a waiver or relinquishment in the
future of such term or condition, but the same shall continue in full force and
effect.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
THE WIDECOM GROUP, INC.
By: _______________________
Authorized Officer
XXXX XXXXX & CO.
By: _______________________
Authorized Officer
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