CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made this _______ day
of December, 1998, by and between Xxxxxx & Xxxxxx, P.A., with offices at 0000
Xxxx Xxxxxxx Xxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 ("Consultant") and
Imaging Diagnostic Systems, Inc. ("Client"), a Florida corporation with
principal offices located at 0000 XX 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
WHEREAS, Consultant has experience in providing corporate and
securities advice for emerging private and public companies; and
WHEREAS, ConsultantWHEREAS, Client has retained and desires to continue
to retain the services of Consultant and Consultant desires to serve Client on
the terms and conditions set forth below.
NOW THEREFORE, in consideration of the mutual promises contained
herein, the benefits to be derive by each party hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, Consultant and Client agree as follows:
1. ENGAGEMENT. Client hereby engages Consultant to provide Client with
services (as defined below), effective as of March 1, 1998 and continuing
through the Initial Consulting Period (as defined below).
2. SCOPE OF SERVICES TO BE PROVIDED. Consultant hereby accepts the
engagement on the terms and conditions set forth in the Agreement, and agrees to
provide the consulting services, which shall consist of but not be limited to:
A. Providing advice and analysis to Client in connection with
mergers, acquisitions and other strategic business opportunities.
B. Assist Client with matters relative to regulatory agencies,
I.E. United States Securities and Exchange Commission ("SEC"), National
Association of Securities Dealers ("NASD"), Florida Division of Securities
("FDS"), ETC. including filings, disclosure, press releases, listing
requirements and the like.
C. Assist Client in negotiating joint venture opportunities.
THIS AGREEMENT SHALL EXPRESSLY EXCLUDE MATTERS RELATING TO CAPITAL RAISING
ASSISTANCE.
3. TERM. This Agreement shall have an initial term of twelve months
comencing March 1, 1998 the ("Initial Consulting Period"); thereafter, this
Agreement will automatically be extended on a month to month basis (the
"Extension Period"), subject to mutually agreed upon compensation, unless
Consultant or Client serve written notice on the other party terminating the
Agreement; provided, however, that Consultant and Client shall agree in writing
as Consultant's continuing compensation. Notice to terminate shall be in writing
and shall be delivered at least ten (10) days prior to the end of the Initial
Consulting Period or any subsequent Extension Period as provided herein. In the
event of termination pursuant to this Paragraph 3, neither party shall have any
further rights or obligation hereunder after the effective date of termination,
except that the obligation of Client to pay fees earned and to reimburse costs
and expenses of Consultant incurred prior to the effective date of termination
in performance of the services shall continue until such fees, costs and
expenses are paid in full by Client.
4. TIME AND EFFORT OF CONSULTANT. Consultant shall devote that amount
of working time, as necessary, on a weekly basis, to fulfill its obligations
under this Agreement. The particular amount of time may vary from day to day or
week to week. Consultant agrees that it will at all times, faithfully and to the
best of its experience, ability and talents, perform all the duties required of
it under this Agreement.
5. COMPENSATION. Compensation to be paid to Consultant for the services
provided under this Agreement shall be in the form of the Client's common shares
of stock ("Shares"), in lieu of cash, determined by valuation of the common
stock at $.50 per share (the "Valuation"). Consultant shall invoice Client for
work performed and Client shall have the option to deliver to Consultant that
number of Shares, based on the Valuation, equal to the amount invoiced or to pay
the invoiced amount in cash.
6. REGISTRATION OF CLIENT'S SHARES. Immediately following the execution
date hereof, Client will register the Shares with the SEC under an S-8
registration statement. At Client's sole discretion, the Shares may be issued or
reserved for issuance prior to registration in reliance on exemptions from
registration provided by Section 4(2) of the Securities Act of 1933 (the "Act"),
Regulation D of the Act, and applicable state securities laws. Such issuance on
reservation shall be in reliance on representations and warranties of Consultant
set forth in Paragraph 14(C) below.
7. COSTS AND EXPENSES. Any expenses incurred by Consultant in carrying
out the services set forth under this Agreement with the prior written approval
of Client shall be reimbursed by Client within thirty (30) days written notice
by Consultant. Unless otherwise agreed and approved in writing in advance, all
expenses, filing fees, copy and mailing expenses incurred by Consultant
performing the services under this Agreement are the responsibility of
Consultant.
8. PLACE OF SERVICES. The services provided by Consultant hereunder
will be performed primarily through Consultant's office, except as otherwise
mutually agreed by Consultant and Client. It is understood and expected that
Consultant may make contacts with persons and entities and perform services in
other locations as deemed appropriate and directed by Client.
9. INDEPENDENT CONTRACTOR. Consultant will act as an independent
contractor in the performance of duties under this Agreement. Accordingly,
Consultant will be responsible for payment of all federal, state and local taxes
on compensation paid under this Agreement, including income and social security
taxes, unemployment insurance, and any other taxes or business license fees as
may be required.
10. NO AGENCY EXPRESSED OR IMPLIED. This Agreement neither expressly
nor impliedly creates a relationship or principal agent between Consultant and
Client. Consultant is not authorized to enter into any agreements on behalf of
Client. Client expressly retains the right to approve, in its sole discretion,
any and all transactions introduced by Consultant (if any), and to make all
final decisions with respect to activities undertaken by Consultant related to
this Agreement.
11. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. Consultant
agrees that non-public information concerning the finances, plans, strategies
and overall business operations of Client is highly confidential and proprietary
to Client ("Confidential Information"). This Confidential Information includes,
but is not limited to, the following:
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A. Non-public information related to the business operations,
including financial and accounting information, plans of operations, and
potential mergers or acquisitions prior to the public announcement of Client;
B. Customer lists, call lists and other non-public customer
data of Client;
C. Memoranda, notes, records, sketches, plans, drawings and
any media used to store, communicate, transmit, record or embody such
Confidential Information of Client;
D. Information treated, marked, or otherwise identified by
Client as confidential or as trade secrets. Consultant acknowledges that such
Confidential Information represents legitimate, valuable and protected interest
of Client and gives Client a competitive advantage, which would otherwise be
lost if the Confidential Information was improperly disclosed. Consultant
further acknowledges that unauthorized or improper disclosure or use of
Confidential Information would cause Client irreparable harm and injury.
Consultant therefore agrees that, in perpetuity or for as long as the
Confidential Information remains confidential, it will not disclose or threaten
to disclose the Confidential Information to any person, partnership, company,
corporation, or to any other business or governmental organization or agency
without the express written consent of Client, as the case may be. Consultant
further agrees not to use or threaten to use the Confidential Information in any
way that is not specifically authorized by, or otherwise contrary to the
interest of Client, as the case may be. Consultant agrees that unauthorized
disclosure or use of Confidential Information constitutes misappropriation of
trade secrets and Confidential Information. Consultant further agrees that all
ownership rights to the Confidential Information are held or retained by Client
as the case may be, and that no right of ownership shall pass to Consultant by
virtue of this Agreement or the services provided hereunder.
12. TERMINATION.
A. TERMINATION FOR CAUSE. The Client, may at its option,
terminate this Agreement by giving written notice of termination to Consultant
without prejudice to any other remedy to which the Client may be entitled either
at law, in equity, or under this Agreement, if Consultant:
i. Neglects or willfully breaches the duties that
Consultant is required to perform under the terms of this
Agreement;
ii. Fails to promptly comply with and carry out all
directives of Client's Board of Directors;
iii. Commits any dishonest or unlawful act, in the
judgment of Client's Board of Directors;
iv. Engages in any conduct that disrupts the business of
Client or any entity affiliated with Client;
v. If found to have engaged in conduct, prior to or
subsequent to the date hereof, that may preclude client
from obtaining any local, state or federal regulatory
approval of Client's licenses or application of any
required in Clients business.
B. TERMINATION OTHER THAN FOR CAUSE. This Agreement shall
terminate immediately on the occurrence of any of the following events:
i. The occurrence of circumstances, in the judgment of
Client's Board of Directors, that makes it impracticable
for Client to continue in its present line(s) of
business;
ii. The decision of and upon notice by Consultant to
voluntarily terminate this Agreement;
iii. If either party files a petition in a court of
bankruptcy or is adjudicated as bankrupt;
iv. If either party institutes or has instituted against
it any bankruptcy proceeding for reorganization for
rearrangement of the party's financial affairs;
v. If either party has a receiver of the party's assets
or property appointed because of insolvency; vi. if
either party makes a general assignment for the benefits
of creditors; or vii if either party otherwise becomes
insolvent or unable to timely satisfy all obligations in
the ordinary course of business.
C. EFFECT OF TERMINATION ON COMPENSATION. In the event of the
termination of this Agreement for other than cause prior to the completion of
the Initial Consulting Period, Consultant shall be entitled to the compensation
earned and to the rights under the option vesting prior to the date of
termination as provided for in this Agreement, computed pro rata up to and
including that date. Consultant shall be entitled to no further compensation
after the date of termination.
13. REPRESENTATIONS AND WARRANTIES OF CLIENT. Client represents and
warrants to Consultant that:
A. CORPORATE EXISTENCE. Client is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida with corporate power to own property and carry on its business as it is
now being conducted.
B. FINANCIAL INFORMATION. Client has or will cause to be
delivered concurrently with the execution of this Agreement, copies of the
Disclosure Documents (as defined in Paragraph 14(D)(i) which accurately sets
forth the financial condition of Client as of the respective dates of such
documents.
C. NO CONFLICT. This Agreement has been duly executed by
Client and the execution and performance of this Agreement will not violate or
result in a breach of, or constitute a default in any agreement, instrument,
judgment, decree or order to which Client is a party or to which Client is
subject, nor will such execution and performance constitute a violation or
conflict of any fiduciary duty to which Client is subject.
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D. FULL DISCLOSURE. The information concerning Client provided
to Consultant pursuant to this Agreement is, to the best of Clients knowledge
and belief, complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading.
E. DATE OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Client set forth in this Agreement is true and
correct at and as of the date of execution of this Agreement.
14. REPRESENTATIONS AND WARRANTIES OF CONSULTANT. Consultant represents
and warrants to client that:
A. PRIOR EXPERIENCE. Consultant has experience in the area of
securities and corporate law including mergers, acquisitions, and corporate
finance and is currently providing some, if not all, of the services
contemplated by this Agreement for the benefit of the Client.
B. NO CONFLICT. This Agreement has been duly executed by
Consultant and the execution and performance of this Agreement will not violate,
or result in a breach of, or constitute a default in any agreement, instrument,
judgment, decree or order to which Consultant is a party or to which Consultant
is subject, nor will such execution and performance constitute a violation or
conflict of any fiduciary duty to which Consultant is subject.
15. INDEMNIFICATION. Client and Consultant agree to indemnify, defend
and hold each other harmless from and against all demands, claims, actions
losses, damages, liabilities, costs and expenses, including without limitation,
interest, penalties and attorney's fees and expenses asserted against or imposed
or incurred by either party of or resulting from a breach of any representation,
warranty, covenant, condition or agreement of the other party to this Agreement.
16. AGREEMENT DOES NOT CONSTITUTE CORRUPT PRACTICE-DOMESTIC OR FOREIGN.
Any and all payments under this Agreement constitute compensation for services
performed and to be performed. This Agreement and all payments and the use of
payments by Consultant do not and shall not constitute and offer payment or
promise or authorization of payment of any money or gift to an official or
political party of, or candidate for political office within or outside the
United States. These payments may not be used to influence any act or decision
of any official, party or candidate to use his/her/its influence with a
government to assist Client in obtaining, retaining or directing business to
Client, or any office or employee of a government or any person acting in an
official capacity for or on behalf of any government; the term "government'
includes any department, agency or instrumentality of a government.
17. INSIDE INFORMATION - SECURITIES LAWS VIOLATIONS. In the course of
the performance of his duties, Consultant may become aware of information which
may be considered "Inside Information" within the meaning of the Federal
Securities Laws, Rules and Regulations. Consultant acknowledges that its use of
such information to purchase or sell securities of Client, or its affiliates, or
to transmit such information to any other party with a view to buy, sell or
otherwise deal in the securities of Client or its affiliates, is prohibited by
law and would constitute a breach of this Agreement and notwithstanding the
provision of this Agreement, will result in the immediate termination of the
Agreement. Consultant agrees to abide by standards of the corporation pertaining
to Inside Information as provided by Client.
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18. NON-EXCLUSIVE SERVICES. Client agrees that the services to be
provided herein are not exclusive. Consultant shall be free to render services
of the same nature or of a similar nature to any other individual or entity
during the term hereof, without the written consent of Client. Consultant
understands and agrees that Client shall not be prevented or barred from
retaining other persons or entities to provide services of the same nature or
similar nature as those provided by Consultant.
19. SPECIFIC PERFORMANCE. Consultant and Client acknowledge that in the
event of a breach of this Agreement by either party, money damages would be
inadequate and the non-breaching party would have no adequate remedy at law.
Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific performance. Such
remedy, however, shall be cumulative as non-exclusive and shall be in addition
to any other remedy to which the parties may be entitled.
20. MISCELLANEOUS.
A. SUBSEQUENT EVENTS. Consultant and Client each agree to
notify the other party if, subsequent to the date of this Agreement, either
party incurs obligations which could compromise their efforts and obligations
under this Agreement.
B. AMENDMENT. This Agreement may be amended or modified at any
time and in any manner only by an instrument, in writing, executed by the
parties hereto.
C. FURTHER ACTIONS AND ASSURANCES. At any time and from time
to time, each party agrees, at its or their expenses, to take actions and to
execute and deliver documents as may be reasonably necessary to effectuate the
purpose of this Agreement.
D. WAIVER. Any failure of any party to this Agreement to
comply with any of its obligations, agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed. The failure of
any party to this Agreement to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of any such provision or a
waiver of the right of such party thereafter to enforce any such provision. No
waiver of any breach of or non-compliance with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.
E. ASSIGNMENT. Subject to Paragraph 20(O) below, neither this
Agreement nor any right created by it shall be assignable by either party
without the prior written consent of the other.
F. NOTICES. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be deemed to be
properly given when delivered in person to an officer of the other party, when
deposited in the United States mail for transmittal by certified or registered
mail, postage prepaid, or when deposited with a public telegraph company for
transmittal, or when sent y facsimile transmission charges prepared, provided
that the communication is addressed:
i. In the case of Consultant:
Xxxxxx & Xxxxxx, P.A.
0000 X. Xxxxxxx Xxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
ii In the case of Client:
Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000.
or to such other person or address designated by Client or Consultant to
receive notice.
G. HEADINGS. The paragraph and subparagraph heading in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
H. GOVERNING LAW. This Agreement was negotiated and is being
contracted for in the State of Florida and shall be governed by the laws of the
State of Florida, notwithstanding any conflict of law provision to the contrary.
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I. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
J. BINDING EFFECT. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
K. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the parties relating to the
subject matter of this Agreement. No oral understandings, statements, promises
or inducements contrary to the terms of this Agreement exist. No
representations, warranties, covenants or conditions, express or implied, other
than as set forth herein, have been made by any party.
L. SEVERABILITY. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement shall remain in full force and
effect.
M. FACSIMILE COUNTERPARTS. A facsimile, telecopy, or other
reproduction of this Agreement may be executed by one or more parties hereto and
such executed copy may be delivered by facsimile of similar instantaneous
electronic transmission device pursuant to which the signature of or on behalf
of such party can be seen, and such execution and delivery shall be considered
valid, binding and effective for all purposes. At the request of any party
hereto, all parties agree to execute an original of this Agreement as well as
any facsimile, telecopy or other reproduction hereof.
N. TERMINATION OF ANY PRIOR AGREEMENTS. Effective the date
hereof, all prior rights of Consultant relating to the accrual or payment of any
form of compensation or other benefits from Client based upon any agreements
other than this Agreement, whether written or oral, entered into prior to the
date hereof, are hereby terminated.
O. CONSOLIDATION OR MERGER. Subject to the provisions of
Paragraph 12 hereof, in the event of a sale of the stock, or substantially all
of the stock of Client, or consolidation or merger of Client with or into
another corporation or entity, or the sale of substantially all of the operating
assets of the Client to another corporation, entity or individual. Client may
assign its rights and obligations under this Agreement to its
successor-in-interest and such successor-in-interest shall be deemed to have
acquired all rights an assumed all obligations of Client hereunder; provided,
however, that in no event shall the duties and services of Consultant provided
for in Paragraph 2, hereof, or the responsibilities, authority of powers
commensurate therewith, change in any material respect as a result of such sale
of stock, consolidation, merger or sale of assets.
P. TIME IS OF THE ESSENCE. Time is of the essence of this
Agreement and of each and every provision hereof.
Q. ARBITRATION. Except for injunctive relief or specific
performance contemplated by Paragraph 19, any dispute, claim or controversy
arising from this Agreement shall be settled in binding arbitration before the
Commercial Rules of the American Arbitration Association. Venue for such
proceeding shall be in Fort Lauderdale, Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
CONSULTANT
XXXXXX & XXXXXX, P.A.
By:/s/ Xxxxx X. Xxxxxx, President
CLIENT
IMAGING DIAGNOSTIC SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxx, Executive Vice President
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