EXHIBIT 4.1
CONSULTING AGREEMENT
This Consulting Agreement is made effective this 22 day of November, 1998,
by and between Xxxxx X. Xxxxxxx ("Consultant") and Proformix Systems, Inc.
("Client") with respect to the following:
WHEREAS, Consultant has rendered valuable services to Client in connection
with the negotiation, consolidation and/or settlement of certain debts and
liabilities of the Company; and
WHEREAS, Client desires to compensate Consultant for his services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. Engagement of Consultant.
Client hereby retains Consultant to assist Client in the consolidation,
negotiation and/or settlement of certain outstanding debts and liabilities of
the Company which total approximately $500,000, and said Consultant has further
agreed to purchase and assume said debts and liabilities as set forth on
Schedule A attached hereto. The foregoing services collectively are referred to
herein as the "Consulting Services." Client agrees that the Consulting Services
shall be complete within 90 days from the date hereof.
2. Compensation.
(a) Client shall issue to Consultant, upon execution of this Agreement,
1,000,000 shares ("Shares") of the Client's Common Stock, valued at $.50 per
share ("Share Price"). The Client agrees that the Shares will have been
registered under the Securities Act of 1933, as amended, pursuant to a
Registration Statement on Form S-8 or other appropriate form, to be filed with
the Securities and Exchange Commission.
(b) During the one year period commencing on the date hereof, Client shall
have the right to purchase all or part of the Shares from Consultant at a price
of $.55 per share.
(c) During the one year period commencing on the date hereof, Consultant
shall have the right to sell the Shares to Client at a price of $.50 per share.
(d) If the Consulting Services are not completed within 90 day from the
date hereof, Consultant shall return the Shares to Client.
3. Term of Agreement, Extensions and Renewals.
This Agreement shall have a term of twelve months from the date hereof.
Client can terminate this Agreement in the event Consultant fails to follow
Client's instructions. Client must advise Consultant that his actions or
inactions are unacceptable and give Consultant a reasonable time to comply. If
Consultant fails to comply, or at later times makes the same unacceptable action
or inaction he can be terminated hereunder by Client' service of notice of
termination to Consultant. In addition, Client can terminate this Agreement if
in the reasonable judgment of its Board of Directors, Consultant's actions or
conduct would make it unreasonable to require Client to retain Consultant. Such
acts are limited to dishonesty, illegal activities, activities harmful to the
reputation of the Client, activities which create civil or criminal liability
for the Client. In the event of termination pursuant to this paragraph, the
Client will be responsible to reimburse costs and expenses to Consultant as set
forth in this Agreement.
4. Nondisclosure of Confidential Information.
In consideration for the Client entering into this Agreement, Consultant
agrees that the following items used in the Clients business are secret,
confidential, unique, and valuable, were developed by Client at great cost and
over a long period of time, and disclosure of any of the items to anyone other
than Client's officers, agents, or authorized employees will cause Client
irreparable injury.
A. Non public financial information, accounting information, plans of
operations, possible mergers or acquisitions prior to the public
announcement.
B. Customer lists, call lists, and other confidential customer data;
C. Memoranda, notes, records concerning the technical processes
conducted by Client;
D. Sketches, plans, drawings and other confidential research and
development data or;
E. Manufacturing processes, chemical formulae, and the composition of
Client's products.
5. Best Efforts Basis.
Consultant agrees that he will at all times faithfully and to the best of
his experience, ability and talents, perform all the duties that may be required
of and from Consultant pursuant to the terms of this Agreement. Consultant does
not guarantee that his efforts will have any impact on Client's business or that
any subsequent financial improvement
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will result of Consultant's efforts. Client understands and acknowledges that
the success or failure of Consultant's efforts will be predicated on Client's
assets and operating results.
5. Client's Right to Approve Transactions.
Client expressly retains the right to approve, in its sole discretion,
each and every transaction introduced by Consultant that involves Client as a
party to any agreement. Consultant and Client mutually agree that Consultant is
not authorized to enter into agreements on behalf of Client.
6. Place of Services.
The Consulting Services contemplated to be performed by Consultant will be
performed at locations selected by Consultant.
7. Costs and Expenses.
Client shall be responsible for all reasonable out-of-pocket expenses,
travel expenses, third party expenses, filing fees, copy and mailing expenses
that Consultant may incur in performing Consulting Services under this
Agreement, provided that such expenses are authorized by the Client.
8. Work Stoppage or Early Termination.
Notwithstanding anything to the contrary contained herein, Client shall
have the right at any time to direct Consultant to cease work or abandon its
efforts on Client's behalf, and to refrain from commencing any new work or
providing any further Consulting Services hereunder.
9. Non-Exclusive Services.
Client acknowledges that Consultant is currently providing services of the
same or similar nature to other parties and Client agrees that Consultant is not
prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity. Consultant understands and agrees that
Client shall not be prevented or barred from retaining other persons or entities
to provide services of the same or similar nature as those provided by
Consultant. Consultant will advise Client of its position with respect to any
activity, employment, business arrangement or potential conflict of interest
which may be relevant to this Agreement.
10. All Prior Agreements Terminated.
This Agreement constitutes the entire understanding of the parties with
respect to the engagement of Consultant for the services set forth in Article 1
hereof and all
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prior agreements and understandings with respect thereto are hereby terminated
and shall be of no force or effect.
11. Representations and Warranties of Client.
Client hereby represents and warrants to Consultant that:
A. Corporate Existence. Client is a corporation duly organized and
validly existing, under the laws of the State of Delaware, with
corporate power to own property and carry on its business as it is
now being conducted.
B. 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.
C. Validity of Shares. The shares of Common Stock are and will be when
issued, duly authorized, validly issued, fully paid, non-assessable,
and free and clear of all liens and encumbrances.
D. Authority. Client has the full legal right, power, authority and
approval required to enter into, execute and deliver the shares of
Common Stock and to fully perform all of its obligations hereunder.
12. Representations and Warranties of Consultant.
Consultant hereby represents and warrant to Client that:
A. Form S-8. Consultant hereby represents that he has not engaged in
any direct or indirect capital raising activities on behalf of the
Client and/or its affiliates.
B. Prior Experience. Consultant has extensive experience in the areas
of the services he is to perform hereunder and has performed the
services contemplated by this Agreement for the benefit of other
client-companies.
C. Information. No representation or warranty contained herein, nor a
statement in any document, certificate or schedule furnished or
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to be furnished pursuant to this Agreement by Consultant, or in
connection with the transaction contemplated hereby, contains or
contained any untrue statement of material fact.
D. 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 acknowledge that his 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 Client's securities is prohibited by law and would
constitute a breach of this Agreement.
E. Agreement Does not Contemplate Corrupt Practice, Domestic or
Foreign. All payments under this Agreement constitute compensation
for services performed and this Agreement any all payments, and the
use of the payments by Consultant, do and shall not constitute an
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 in any jurisdiction within or outside the United
States. These payments may not be used to influence any act or
decision of an 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 person or other
corporate entity. As used in this paragraph, the term "official"
means any officer 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.
F. Reliance upon Representations. The information provided pursuant to
this Agreement may be relied upon by Client, as true and correct as
of the date hereof. Further, Consultant represents as follows:
(a) by reason of Consultant's knowledge and experience of
financial and business matters in general, and investments in
particular Consultant is capable of evaluating the merits and
risks of this transaction and in bearing the economic risks of
an investment in the Common Stock and the Client in general
and fully understand the speculative nature of such securities
and the possibility of such loss; and
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(b) Consultant has had the opportunity to ask questions and
receive answers concerning the terms and conditions of the
shares to be issued hereby and reserved for issuance pursuant
hereto, and to obtain any additional information which Client
possess or can acquire without reasonable effort or expense
that is necessary to verity the accuracy of information
furnished; and
(c) Consultant has been furnished with a copy of Client's most
recent Annual Report on Form 10- KSB and all reports or
documents required to be filed under Section 13(a), 14(a) and
15(d) of the Securities Exchange Act of 1934, including but
not limited to quarterly reports on Form 10-QSB; and, in
addition, that Consultant has been furnished with a brief
description of the Client's capital structure and any material
changes in Client's affairs that may not have been disclosed
in the aforementioned documents.
G. Subsequent Events. Consultant will notify Client if, subsequent to
the date hereof, either party incurs obligations which could
compromise its efforts and obligations under this Agreement.
13. Consultant is not an Agent or Employee.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the employee or agent of Client or otherwise represent or bind Client.
For the purposes of this Agreement, Consultant is an independent contractor. All
final decisions with respect to acts of Client or its affiliates, whether or not
made pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of Client or such affiliates and Consultant shall
under no circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
14. Miscellaneous.
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
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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. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach
of this Agreement shall operate as a waiver of any subsequent right
or remedy arising from a subsequent breach of this Agreement. The
consent of any party where required hereunder to any act of
occurrence shall not be deemed to be a consent to any other act of
occurrence.
D. Assignment.
(i) Neither this Agreement nor any obligation created by it shall
be assignable by either party without the prior written
consent of the other.
(ii) Nothing in this Agreement, expressed or implied, is intended
to confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.
E. 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 mails for transmittal by
certified or registered mail, postage prepaid, or when deposited
with a public telegraph company for transmittal or when sent by
facsimile transmission, charges prepared provided that the
communication is addressed to the respective party at the place
indicated on the first page of this Agreement or to such other
person or address designed by the parties to receive notice.
F. Headings and Captions. The headings of paragraph are included solely
for convenience. If a conflict exists between any heading and the
text of this Agreement, the text shall control.
G. Entire Agreement. This Agreement annexed as an exhibit hereto
contain the entire Agreement between the parties with respect to the
transaction contemplated by the Agreement. This Agreement may
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be executed in any number of counterparts but the aggregate of the
counterparts together constitute only one and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or more of
the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, but this Agreement shall be
constructed as if it never contained any such invalid, illegal or
unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be controlled by and construed under the laws
of the State of New Jersey.
J. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be
entitled to recover actual attorney's fee from the other party. The
attorney's fees may be ordered by the court in the trial of any
action described in this paragraph or may be enforced in a separate
action brought for determining attorney's fees.
K. Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute
such other and further documents and take such other and further
actions as may be necessary or convenient to effect the transactions
described herein.
L. Further Actions. At any time and from tie to time, each party
agrees, at its or their expense, to take actions and to execute and
deliver documents as may be reasonably necessary to effectuate the
purpose of this Agreement.
M. 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 attorneys' fees and
expenses asserted against or imposed or incurred by either party by
reason of or resulting from a breach of any representation,
warranty, covenant condition or agreement of the other party to this
Agreement.
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N. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the
parties hereto and their successors, any rights or remedies under or
by reason of this Agreement, unless this Agreement specifically
states such intent.
O. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the other
party, the party who receives the transmission may rely upon the
electronic facsimile a signed original of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
PROFORMIX SYSTEMS, INC.
By:/s/Xxxxx Xxxx
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Xxxxx Xxxx, President
/s/Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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