EXHIBIT 99(b)
(B)
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made this 12th day of
February, 1997, by and between Rosenman & Colin LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 ("Consultant") and Medical Industries of America, Inc., a Florida
corporation with its principal office at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx
Xxxxx, Xxxxxxx 00000 ("Client").
WHEREAS, Consultant has experience in providing corporate and securities
advice for emerging private and public companies; and
WHEREAS, 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 derived by each party hereunder, and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledge, Consultant and Client agree as follows:
1. ENGAGEMENT. Client hereby engages Consultant to provide Client with
services (as defined below), effective as of February 12, 1997 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
business litigation and related legal matters.
B. Assist Client with matters relative to regulatory agencies,
including Federal, State and local government agencies.
C. Assist Client in negotiating joint venture opportunities.
THIS AGREEMENT SHALL EXPRESSLY EXCLUDE MATTERS RELATING TO CAPITAL RAISING
ASSISTANCE.
3. TERM. This Agreement shall be terminable at will by either party. 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. A retainer to be paid to Consultant for services provided
under this Agreement shall be $25,000, however, in lieu of that retainer being
paid in cash, Consultant agrees to accept 15,000 of the Client's common shares
of stock ("Shares"), on the basis of the Client's assurance that in the event
the closing bid price of the date of filing of the S-8 Registration Statement
does not produce net proceeds of at least $25,000 to the Consultant that the
Client shall make up any deficiency by paying the consultant cash or by
providing additional shares of freely tradable common stock (for which an S-8
Registration Statement shall also be filed by Client) sufficient in number to
make up the deficiency. When the $25,000 retainer (whether in cash or the
proceeds from the sale
of the Shares) has been used up, Consultant shall xxxx Client monthly for its
services, disbursements and other charges and Client agrees to pay same
promptly.
6. REGISTRATION OF CLIENT'S SHARES. Immediately following the execution
date hereof, Client will register the Shares with the SEC under a S-8
registration statement or other available registration form, and which shall
contain a prospectus sufficient in the view of Consultant to effect the resale
of the shares.". 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 13 (C) below.
7. COSTS AND EXPENSES. Any expenses incurred by Consultant in carrying out
the services set forth under this Agreement shall be reimbursed by Client within
thirty (30) days written notice by 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 of 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:
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 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. 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 13 (C) (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.
D. FULL DISCLOSURE. The information concerning Client provided to
Consultant pursuant of this Agreement (including without limitation, the
Disclosure
Documents) is complete and accurate 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 materiel 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. ELIGIBILITY. The Client is eligible to use Forms S08 and S03 and
has made all filings in the last twelve months required to be made by the
Securities Exchange Act of 1934 and that the shares are registerable and can be
resold under an S-8 Registration Statement.
F. DATE OF REPRESENTATION 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.
13. 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, 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.
C. REGISTRATION AND/OR EXEMPTION OF THE SHARES. Consultant
understands and acknowledges that any shares issued or reserved for issuance
prior to registration will be so issued or reserved in reliance on the
exemptions from registration
provided by Section 4 (2) of The Act, Regulation D and applicable state
securities laws. Representation and warranties by Consultant in this Paragraph
14 (C) will be used and relied upon by Client of Consultant pursuant to Section
4 (2) of the Act and Regulation D and Consultant will notify Client immediately
of any material changes of the representations made herein. In this regard,
Consultant represents and warrants that:
i. Consultant has been furnished with a copy of Client's
most recent Annual Report on Form 10-K and all reports
or documents required to be filed under Sections 13 (a),
14 (a) and 15 (d) of the Securities and Exchange Act of
1934, as amended, including, but not limited to
quarterly reports on Form 10-Q, current reports on Form
8-K and proxy statements (the "Disclosure Documents").
ii. Consultant has had the opportunity to ask questions and
receive answers concerning the terms and conditions of
the Shares to be issued and/or reserved for issuance,
and to obtain any additional information which Client
possesses or can acquire with out unreasonable effort or
expense necessary to verify the accuracy of information
furnished under Paragraph 13 (C) (i) of this Agreement.
iii. By reason of Consultant's knowledge and experience in
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
Shares and client in general, and fully understands the
speculative nature of such securities and the
possibility of such loss.
iv. The present financial condition of Consultant is such
that Consultant is not under any present or contemplated
future need to dispose of any portion of the Shares, if
any, to
satisfy an existing or contemplated undertaking need or
indebtedness.
v. Consultant is fully aware that any Shares issued to
Consultant prior to registration will be Restricted
Securities as defined by Rule 144 of the Act and that
any resale of such securities by Consultant may be
governed by Rule 144. Consultant is further aware of the
specific restrictions on resale of such securities
contained in Rule 144.
vi. Consultant will not sell. transfer or otherwise dispose
of any Shares issued or reserved for issuance hereunder
prior to registration except in compliance with the Act.
vii. Any and all certificates representing the Shares issued
prior to registration of such Shares and any and all
securities issued in replacement hereof or in exchange,
therefore, shall bear the following legend:
The Shares represented by this Certificate have
not been registered under the Securities Act of
1933 (the "Act") and are "restricted Securities"
as that term is defined in Rule 144 under the Act.
The shares may not be offered for sale, sold or
otherwise transferred except pursuant to an
effective registration or pursuant to an exemption
from registration under the act, the availability
of which is to be established to the satisfaction
of the company.
D. DATE OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Consultant set forth in this Agreement is true
and correct at and as of the date of execution of this Agreement.
14. 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.
15. 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.
16. 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 and
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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
above written:
CONSULTANT
Rosenman & Colin LLP
BY: /s/ XXXXXX XXXXXXXXX
Xxxxxx Xxxxxxxxx
CLIENT
MEDICAL INDUSTRIES OF AMERICA, INC.
BY: /s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
