AGREEMENT TO PARTICIPATE
IN EXISTING DATABASES
THIS AGREEMENT, dated and effective as of May 6, 2003 (the "Effective
Date"), is between Hunter M. A. Xxxx, an individual whose office is located at
00000 Xxxxxxxx, Xxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 (the "Consultant"), and
SEDONA CORPORATION, a Pennsylvania Corporation, whose principal place of
business is 0000 Xxxx 0xx Xxxxxx, 0xx xxxxx, Xxxx xx Xxxxxxx, XX 00000 (the
"Client").
RECITALS
WHEREAS, the Client has retained one or more attorneys (the "Client
Attorneys") in connection with litigation relating to manipulation of the
Client's stock and against certain defendants, as defined by the original
pleading; and
WHEREAS, the Client Attorneys have retained the Consultant to provide
access to a database of documents relating to similar litigation and preparation
of a searchable electronic database of the documents, reports, depositions,
pleadings and other information relating to litigation filed on behalf of the
Client; and
WHEREAS, Consultant has entered into a contract with ITIS, Inc. d/b/a
LITIDEX(R) to perform analysis and evaluation of factual data and organization
of that factual data;
NOW, THEREFORE, Consultant and the Client agree as follows:
ARTICLE I
SERVICES TO BE PROVIDED
1.01 SERVICES TO BE PROVIDED. The Consultant or his designee or contractors,
under the supervision and direction of Client Attorneys and pursuant to
an agreement between Consultant and Client Attorneys, will:
(a) collect, organize, summarize and validate information relating to
potential causes of action that the Client may have and prepare an
analysis of such information as necessary;
(b) make available to the Client Attorneys access to a database
prepared by LITIDEX(R) consisting of data relating to similar
litigation; and
(c) make available to Client Attorneys stock transactions and related
short selling evidence from other litigation and contained in
Consultant's database.
All such services shall be provided by the Consultant in accordance
with the agreement between the Consultant and the Client Attorneys.
Sedona Corporation Agreement to Participate in Existing Databases - Page 1
1.02 PAYMENTS. The Client agrees to pay Consultant the following amounts in
connection with services and products provided by the Consultant to the
Client Attorneys:
(a) A Due Diligence Fee of $41,280 relating to the preparation and
organization of information relating to the Client prior to the
date of this Agreement, which information is instrumental in the
determination by the Client Attorneys to accept Client's potential
causes of action. Consultant acknowledges receipt of the sum of
$19,000 as partial payment on this Due Diligence fee; the balance
shall be paid in full upon execution of this Agreement.
(b) A Participation Fee of $246,903 for access to an electronically
searchable database of pleadings, research, documents, expert
reports, and other information relating to similar litigation.
1.03 COMPENSATION FULLY EARNED. The Client acknowledges that the Payments
described in Section 1.02 are fully earned as of the date of this
Agreement and that Client will not be entitled to any refund, reduction
or offset in the event that any litigation filed on behalf of the
Client is dismissed or resolved against the interest of the Client,
Client's claims are settled before or after litigation is filed.
However; should the Consultants/ LTIDEX Database be inaccessible,
destroyed or unavailable for the use contemplated by this Agreement,
the provisions of this section shall become null and void.
1.04 STOCK COMPENSATION. At the Client's option, up to $246,903 of the fees
payable under this Agreement may be paid by delivery to Consultant of
fully registered and freely transferable shares of common stock of the
Client with a market value on the day of delivery calculated by using a
per share value based on the average stock trading price for the prior
10 days' trading.
1.05 SECURITY FOR PAYMENT. Client agrees that for each $100,000 of the
amount due Consultant that remains unpaid upon the receipt of any
settlement of the litigation, Client Attorneys are designated to pay
Consultant 1% of the damages received or the balance remaining unpaid,
whichever is greater. At execution of this Agreement, Client shall file
an S-8 Plan providing for the issuance of sufficient shares of Client's
stock to pay Consultant all amounts that may become due under this
Agreement.
ARTICLE II
RESPONSIBILITIES OF PARTIES
2.01 CO-OPERATION. The Client will use its best efforts to make all
information, documents, and other data relating to the litigation
available to the Consultant and its designees and contractors in an
organized and timely manner as such data becomes available. The Client
further agrees that it will instruct the Client Attorneys, immediately
and without delay, to provide Consultant or its designees and
contractors with copies of all pleadings filed in such litigation,
transcripts and video records of all depositions, copies of all
material received or produced in response to subpoenas or other
discovery, and any other information created or received in connection
with such litigation.
Sedona Corporation Agreement to Participate in Existing Databases - Page 2
2.02 RESPONSIBILITY FOR CONTENT. The Consultant is solely responsible for
the content of all data provided to Client or Client Attorneys pursuant
to this Agreement and for providing such data in a format and at the
times required. "Format" has previously been agreed to by Client
Attorneys. All data delivered by the Consultant shall be free of
executable files, viruses, corruptions or other programs. The
Consultant will be responsible for any additional costs arising from
data provided to Client Attorneys in an improper format, containing
errors or omissions, or untimely. "Untimely" shall have the following
meaning: "not provided by Consultant or his designee within 48 hours of
receipt of a request from Client Attorney. This provision shall be
waived as to Consultant or his designee if Client is in default under
the terms of any Agreement with Consultant."
2.03 ERRORS. Consultant shall promptly correct any errors arising from the
compilation or entry of data by Consultant. All cost relating to the
correction of errors shall be the sole responsibility of Consultant
except those that are caused by errors in data supplied by the Client
or the Client Attorneys or breach of this Agreement or the agreement
between Consultant and the Client Attorneys.
2.04 CONFIDENTIALITY. Client Attorneys shall keep all information, programs,
and documentation learned as a result of the performance of this
Agreement or the use of Consultant's database confidential and shall
not use any such information for any purpose except as contemplated by
this Agreement.
2.05 CURE PROVISION. Consultant shall be permitted a reasonable period of
time, not to exceed 30 days, within which to make any required
corrections.
ARTICLE III
WARRANTY
CONSULTANT MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE, AS TO ANY MATTER WHATSOEVER,
INCLUDING BUT NOT LIMITED TO THE HARDWARE, PROGRAMS, DOCUMENTATION, DATA FILES,
OUTPUT SERVICES, OR OTHER MATTERS PRODUCED OR PROVIDED TO THE CLIENT ATTORNEYS
HEREUNDER. CONSULTANT SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES, WHETHER DIRECT,
INDIRECT, OR CONSEQUENTIAL, ARISING FROM THE LOSS OR CORRUPTION OF DATA, THE
SOLE REMEDY OF THE CLIENT FOR ALL SUCH CASES BEING THE RESTORATION OF SUCH DATA
FROM BACK UP FILES. HOWEVER, THE DATABASE HAS BEEN PREPARED AND WILL BE
MAINTAINED AS PREVIOUSLY DEFINED BY CLIENT ATTORNEYS.
ARTICLE IV
CONTRACTED SERVICES
CLIENT ACKNOWLEDGES THAT CONSULTANT WILL CONTRACT WITH ITIS, INC. d/b/a
LITIDEX(R) TO PERFORM THE SERVICES REQUIRED PURSUANT TO THIS AGREEMENT AND THE
Sedona Corporation Agreement to Participate in Existing Databases - Page 3
AGREEMENT BETWEEN CONSULTANT AND CLIENT ATTORNEYS AND SPECIFICALLY GRANTS TO
CONSULTANT THE RIGHT TO ENTER INTO SUCH CONTRACTS FOR THE BENEFIT OF THE CLIENT.
A SUBSTANTIAL PORTION OF THE FEES PAID HEREUNDER WILL BE PAID BY CONSULTANT TO
LITIDEX(R) TO PERFORM THE OBLIGATIONS OF CONSULTANT HEREUNDER. CLIENT AGREES
THAT LITIDEX(R) IS A THIRD-PARTY BENEFICIARY OF THIS AGREEMENT AND MAY ENFORCE
THE RIGHTS OF CONSULTANT UNDER THIS AGREEMENT AND THAT CLIENT WILL LOOK SOLELY
TO LITIDEX(R) FOR ANY REMEDY IN CONNECTION WITH A CLAIM FOR BREACH OF THIS
AGREEMENT.
ARTICLE V
POTENTIAL CONFLICTS
CLIENT ACKNOWLEDGES THAT CONSULTANT IS AN EXECUTIVE OFFICER, DIRECTOR AND MAJOR
SHAREHOLDER OF ITIS, INC. d/b/a LITIDEX(R) AND WAIVES ANY CONFLICT OF INTEREST
THAT MAY EXIST AS A RESULT OF THE SUBCONTRACT TO LITIDEX(R) OF ANY OF
CONSULTANT'S RESPONSIBILITIES UNDER THIS AGREEMENT.
ARTICLE VI
MISCELLANEOUS
6.01 NO LEGAL SERVICES. Consultant does represent Client and is not engaged
to represent Client before any court or other judicial body and no part
of the compensation paid hereunder is for the referral of any claim to
an attorney, the rendering of legal advice, or other legal services.
Nothing herein is intended or shall be construed to require Consultant
to perform or provide legal services on behalf of the Client.
Consultant has been hired by Client for the sole purpose of development
of a Work Product database for Client Attorneys, being the compilation
of Attorneys' work
6.02 TAXES. The Consultant shall be responsible for the payment of any
sales, use or other taxes measured by the gross receipts under this
Agreement. Consultant has included the calculation of all sales and
other taxes owed on his services as part of the fees included in this
Agreement.
6.03 FORCE MAJEURE. Neither Party hereto shall have any liability to the
other if its performance under this Agreement is hindered or delayed by
forces beyond its control, including labor disturbances, war, acts of
God, fires, storms, accidents, acts of governments and acts of
terrorism or civil unrest.
6.04 NOTICES. All notices required or permitted by this Agreement shall be
in writing and sent by receipted mail or delivery to the following
addresses:
Sedona Corporation Agreement to Participate in Existing Databases - Page 4
If to Consultant Hunter M. A. Xxxx
00000 Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxxx, XX 00000
If to Client: Sedona Corporation
Attn: Xxxxx X. Xxxxxx, President and CEO
0000 Xxxx 0xx Xxxxxx, 0xx xxxxx
Xxxx xx Xxxxxxx, XX 00000
6.05 NON-WAIVER. Neither Party's failure at any time to require strict
performance by the other Party of any of the provisions of this
Agreement shall be a waiver of such Party's right hereunder to demand
strict compliance herewith or with any other provision. Waivers by
either Party of any default by the other Party shall not waive any
subsequent default of the same or any other provision.
6.06 JURISDICTION; VENUE; APPLICABLE LAW. This Agreement shall be construed
and interpreted and any dispute relating hereto resolved in accordance
with the laws of the State of Texas, excluding any law that would
direct the application of the laws of any other jurisdiction. Any
litigation relating to this Agreement shall be brought in a court of
appropriate jurisdiction in Xxxxxx County, Texas. The Parties hereby
submit to the exclusive jurisdiction and venue in such courts and waive
any claim that such venue is improper or inconvenient.
6.07 INTEGRATION. This Agreement is the sole agreement between the Parties
and incorporates, supersedes and replaces all prior negotiations, oral
agreements and written agreements. It may be amended, supplemented or
explained only by a written document dated after the date hereof signed
by the Parties.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the
date above.
HUNTER M. A. XXXX, Consultant
___________________________________
SEDONA CORPORATION, Client
By _________________________________
Xxxxx X. Xxxxxx, President and CEO
Sedona Corporation Agreement to Participate in Existing Databases - Page 5
SCHEDULE B
AGREEMENT TO PARTICIPATE
IN EXISTING DATABASES
FEE AMOUNT: $246,903
DESCRIPTION: Client Attorneys access and rights of use to the
LITIDEX(R) Database as described in this Agreement
for the duration of this Agreement.
PAYMENT TERMS: Two payments of $6,900 payable within 30 days of the
signing date of this Agreement; then payments of not
less than $6,900 per month for not longer than 34
months commencing 30 days from the effective date of
this Agreement. Payments may, at the Client's
election, be paid in cash or in free trading S-8
shares of Client's Common Stock valued at a price per
share determined by the prior 10 day trading average.
