EXHIBIT 4
CONSULTING AGREEMENT FOR TELECOMMUNICATION SERVICES
AMERICAN DIVERSIFIED GROUP, INC., a Nevada corporation, with offices
located at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxx, XX 00000 ("ADGI"), for good
and valuable consideration, receipt of which it hereby acknowledges, and for
future consideration set forth in this agreement, including the services
specifically to be provided hereunder, hereby agrees as of this 1st day of
August, 1997, with EMERGING TRENDS LINKAGES CORP., a New York corporation, with
offices located at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (hereinafter
"ETLC" or the "Consultant"), as follows under this "Consulting Agreement"
W I T N E S E T H:
The parties agree pursuant to this Consulting Agreement to utilize the
services and expertise of Consultant in the Republics of Mali and Guinea and in
the area of telecommunications to organize a joint venture for the purpose of
offering a call-back service (the "Call-Back Service"), which will be offered
principally to private sector and multinational entities and foreign embassies
in the Countries of Guinea and Mali. Exhibit "A" attached hereto sets forth a
list of target customers and customers previously serviced by ETLC's Call-Back
Service.
The parties further agree that the Call-Back Service shall be offered by
ETLC on behalf of ADGI in such countries because the parties are presently
marketing and selling generic pharmaceutical products, blood derivative
products, and diagnostic test kits, among other products in such countries as a
result of Consultant having active representatives in such countries, and
because Mali has
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been and shall remain the primary country for Call-Back Service and Guinea is
capable of becoming a growing and second primary country for Call-Back Service.
The parties further agree that the ADGI is utilizing the Consultant and its
expertise in organizing the Call-Back Service shall be for the purpose of
enhancing the professional standing and reputation of ADGI in the countries of
Mali and Guinea, with the intent of generating cash flow on a monthly basis to
ADGI's account from the Call-Back Service, on terms and conditions set forth
below.
1. Term: The term of this Consulting Agreement shall be for an initial period
of fifteen months (the "Term"), subject to the right of ADGI to renew the
Consulting Agreement for an additional fifteen month period (the "Renewal Term")
based upon the terms set forth below. The right of renewal shall be exercised
by ADGI by written notice of renewal to the Consultant, at any time within
ninety days prior to the expiration of the Term. The parties agree that during
the Term and the Renewal Term, ETLC, as Consultant, shall be responsible for the
day to day operations of Call-Back in the countries of Mali and Guinea,
including responsibility to provide staff support for the Call-Back customers,
monitor billing to and payment receipts from the customers, assure that all
customers pay all bills into ADGI's bank account, as provided herein, and
provide up-to-date-reports to ADGI of the status of the Call-Back Services and
its fulfillment of these obligations.
2. Consideration: (a) The parties agree that no consideration shall be paid
to Consultant unless and until it shall perform the conditions set forth
hereinbelow, including the obligations to generate customers for the Call-Back
Service, and thereafter to generate certain levels of revenues from the Call-
Back Service, as provided herein. It is agreed that a total of 15 million shares
shall be issued to Consultant in a registration statement on Form S-8, but shall
be held in escrow by Xxxxxx X. Xxxxx, Xx. Esq., as corporate secretary and
counsel to ADGI,
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and shall be released by ADGI to ETLC only upon satisfaction with the following
terms and conditions:
(i) Two million shares shall be released and issued to ETLC following
delivery by ETLC to ADGI of written documentation evidenced by Rockwell
Communications verification of DID number activation for customers, and listing
from ETLC of the customers names (the "Documentation"), that it has secured for
ADGI on behalf of the joint venture ten customers for the Call-Back Service;
(ii) Two million additional shares shall be released and issued to ETLC
following delivery by ETLC to ADGI of written Documentation that it has secured
for ADGI on behalf of the joint venture ten additional customers for the Call-
Back Service; and
(iii) Two million additional shares shall be released and issued to ETLC
following delivery by ETLC to ADGI of written Documentation that it has secured
for ADGI on behalf of the joint venture ten additional customers for the Call-
Back Service, for a total of not less that thirty customers for Call-Back
Service.
(b) In addition, ADGI shall have its
secretary and corporate counsel, Xx. Xxxxxx X. Xxxxx, Xx. hold a total of five
million shares for the express purpose of enabling the joint venture to satisfy
certain expenses in connection with the formation and funding of the start-up
expenses of the joint venture, as well as the support and expansion of Call-Back
operations including the costs of purchasing from the reseller, Rockwell
Communications, with offices in Ft. Lauderdale, FL, of the minutes utilized for
the Call-Back Service by ADGI's customers, and expense of any additional
equipment, when and if needed, for the expansion of Call-Back Service to Mali
and Guinea, the costs associated with Consultant's offices in Mali in the amount
of $5,600 per month, the initial marketing and organizations trips of Madani A.
Tall and Xxxxx Xxxxx Xxxx to West Africa, and from time to time additional
deposits for the purchase of minutes and such other expenses as the Board of
Directors of ADGI shall agree in writing,
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and no other expenses. The Consultant agrees that in connection with the sale of
these shares, Consultant shall provide ADGI with copies of the confirmations of
all sales, copies of wire transfers and other payments to Rockwell
Communications, including a breakdown of the cost of minutes and equipment, if
any, a breakdown of payroll and other expenses incurred in the office in Mali
within the budget of $5,600 per month, and copies of all billing to customers,
records of customers payments for the Call-Back Service, among other records
reasonably requested by ADGI under this Consulting Agreement.
(c) The remaining four million shares shall be
released to ETLC by action of ADGI's board of directors upon the following
schedule and in accordance with the satisfaction and performance by ETLC on
behalf of the joint venture:
(i) One million shares upon Call-Back generating during the period of
one month "gross revenues" (which is defined for the purposes of this Consulting
Agreement as total Call-Back min minutes billed and paid for by Call-Back
customers less non-payments by Call-Back customers) resulting in payment into
ADGI's account of $50,000 from the sale of Call-Back Service to customers;
(ii) One million shares upon Call-Back generating during the period of
one month gross revenues and payment to ADGI's account of $100,000 from the sale
of Call-Back Service to customers;
(iii) One million shares upon Call-Back generating during the period of
one month gross revenues and payment to ADGI's account of $150,000 from the sale
of Call-Back Service to customers; and
(iv) One million shares upon Call-Back generating during the period of
one month gross revenues and payment to ADGI's account of $200,000 from the sale
of Call-Back Service to customers.
(d) During the Term, the parties shall split the
"gross profits" (which shall be defined for the purposes of this Consulting
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Agreement as gross revenues on a monthly basis from the sale and payment to
ADGI's account for Call-Back Service minutes, less the costs of purchasing such
Call-Back Service minutes from the reseller, Rockwell Communications, for such
Service, plus the $5,600 monthly costs of the office in Mali, as follows:
(i) During the first three months following the execution of this
Consulting Agreement, the gross profits shall be split 65% to ETLC and 35% to
ADGI;
(ii) During the remainder of the Term, the gross profits shall be split
72.5% to ETLC and 27.5% to ADGI.
(e) As consideration for the Renewal Term, the
parties agree that additional shares shall be issued and options shall be
granted to Consultant as follows. Upon the exercise of the Renewal Term, ADGI
shall cause to be issued to Consultant an aggregate of shares and options as
follows: if the price of the shares is $.75 or below, a total 5 million shares
will be issued and a grant of common stock purchase option s to purchase 5
million additional shares exercisable at a price equal to 50% of the average
closing bid price of the shares during the thirty day period prior to such
issuance; however, if the price of the shares during the thirty day period prior
to the date of the Renewal Term shall be equal to or greater than $.75 per
share, then in such event 3 million shares shall be issued to ETLC and an option
to purchase 3 million additional shares shall be granted, which options shall be
exercisable at a price equal to 50% of the average closing bid price of the
shares during the thirty day period prior to the date of the Renewal Term. The
foregoing shall not be subject to adjustment in the event of any share
recapitalization, unless otherwise agreed to in writing signed by both parties.
(f) The certificates representing the Shares and any
option Shares issued upon exercise of the options, unless and until they are
registered under the Act, shall bear the following legend:
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THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE LAWS
OF ANY OTHER JURISDICTION AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN ANY MANNER (1) WITHOUT REGISTRATION
UNDER THE ACT AND IN COMPLIANCE WITH THE LAWS OF ANY APPLICABLE JURISDICTION OR
(2) AN OPINION OF COUNSEL (IN FORM AND SUBSTANCE ACCEPTABLE TO ADGI) THAT
REGISTRATION IS NOT REQUIRED.
(g) ADGI hereby grants Consultant the right to cause to
ADGI to include the Consultant's initial 15 million shares in a Registration
Statement on Form S-8 under the Act. With respect to any shares and shares
underlying options issuable upon the exercise by ADGI of the Renewal Term, ADGI
undertakes to the maximum extent permissible to file with the Securities and
Exchange Commission a Registration Statement on Form S-1.
3. First Right of Refusal: During the Term of this Consulting Agreement and
any Renewal Term, in the event that ETLC shall determine to offer Call-Back
Service in countries other than Mali and Guinea, and such determination shall be
in connection with a proposal for a joint venture with another public company,
then ETLC will give written notice of the terms and conditions of such joint
venture proposal to ADGI. ADGI shall have the first right of refusal,
exercisable in writing, during the period of fifteen business days from the date
of ETLC's notice, to agree to participate in a joint venture with ETLC in each
such other country at the same terms and conditions set forth in the written
notice first given to ADGI as provided herein. If ADGI shall elect to
participate in such joint venture for another country, as provided in the
notice, then ETLC shall be obligated to enter into a written joint venture
agreement with ADGI with respect to such country. This first right of refusal
shall be valid for as many additional countries as ETLC shall
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determine to offer Call-Back Service, during the Term of this Consulting
Agreement, and any Renewal Term, but only with respect to joint ventures with
other public companies.
4. Payments: It is understood and agreed by the parties that all payments by
the customers of the Call-Back Service shall be made to ADGI's account by wire
transfer, or Western Union, or such other means, in US dollars, payable into a
bank account to be established by ADGI in New York City, with Xxxxxx X. Xxxxx,
Xx. and Xxxxxxx X. Xxxxxx, as signatories. ADGI shall designate by written
notice to Consultant, for the purposes of payments into ADGI's account, the name
of the bank, the bank's ABA number and account number and wire transfer
instructions, for payment instructions from the Call-Back customers.
5. Books and Records: It is further understood and agreed by the parties that
all books and records of the joint venture shall be available at all times for
review by the parties, including customer billing and payment records, payments
and deposits to purchase Call-Back minutes from the reseller, Rockwell
Communications, and payments on account of the office in Mali,(which shall
include the amounts of rent and utilities and the names and salaries of the
employees) which shall not exceed $5,600 per month, and shall be supported by
invoices, bills, checks, or other written evidence sufficient to support
appropriate deductions for the purposes of the Internal Revenue Service, and
consistent with the disclosure obligations of ADGI as a reporting company under
the Securities Exchange Act of 1934. Copies of all reports, bills and payments
shall be made available simultaneously to ADGI and Consultant from the reseller
and any employee of Consultant.
6. Independent Contractor: At all times during the term of this Agreement,
Consultant shall be an independent contractor and not an employee of ADGI.
7. Compliance With All Applicable Law: Consultant acknowledges that ADGI is
required to comply with the Securities Act of 1933, as amended, the
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Securities Exchange Act of 1934, and the rules promulgated by the Securities and
Exchange Commission and the applicable securities and other laws of various
states. Consultant hereby agrees that in performance of the consulting services
contemplated by this Agreement, Consultant will comply with all applicable laws.
Consultant further represents that it is fully authorized to perform the
services contemplated herein and that there is no legal impediment to its
performance of such services.
7. Indemnification: Consultant shall indemnify and hold harmless ADGI from and
against all damages, losses or expenses suffered or paid as a result of any and
all claims, demands, suits, causes of action, proceedings, judgments and
liabilities, including reasonable attorney's fees, incurred in litigation or
otherwise, assessed, incurred or sustained by or against ADGI with respect to or
arising out of the performance of consulting services under this Agreement
excepting only those losses caused by the gross negligence or willful misconduct
of ADGI. ADGI shall indemnify and hold the Consultant harmless from and against
all damages, losses or expenses suffered or paid as a result of any and all
claims, demands, suits, causes, of action, proceedings, judgments and
liabilities, including reasonable attorney's fees, incurred in litigation or
otherwise, assessed, incurred or sustained by or against Consultant with respect
to or arising out of the performance of consulting services under this Agreement
excepting only those losses caused by the negligence or willful misconduct of
Consultant.
8. Miscellaneous:
(a) Entire Agreement: This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, writings, and negotiations, both
oral and written, among the parties hereto with respect to such subject matter.
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(b) Amendment: This Agreement may not be amended or modified in any
respect, except by the mutual written agreement of the parties hereto.
(c) Waivers and Remedies: The waiver by any of the parties hereto of any
other party's prompt and complete performance, or breach or violation, of any
provision of this Agreement shall not operate nor be construed as a waiver of
any subsequent breach or violation, and the waiver by any of the parties hereto
to exercise any right or remedy which it may possess hereunder shall not operate
nor be construed as a bar to the exercise of such right or remedy by such party
upon the occurrence of any subsequent breach or violation.
(d) Severability: The invalidity of any one or more of the words,
phrases, sentences, clause, sections or subsections contained in this Consulting
Agreement shall not affect the enforceability of the remaining portions of this
Consulting Agreement or any part hereof all of which are inserted conditionally
on their being valid in law, and, in the event that any one or more of the
words, phrases, sentences, clauses, sections or subsections contained in this
Consulting Agreement shall be declared invalid by a court of competent
jurisdiction, this Consulting Agreement shall be construed ads of such invalid
word or words, phrase or phrases, sentence or sentences, clause or clauses,
section or sections, or subsection of subsections had not been inserted.
(e) Descriptive Headings: The descriptive headings that are contained
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Consulting Agreement.
(f) Counterparts: This Consulting Agreement may be executed in any number
of counterparts and by the separate parties hereto in separate counterparts,
each of which shall be deemed to be one and the same instrument.
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(g) Notices: All notices required to be given under this Consulting
Agreement shall be in writing, sent certified mail, return receipt requested,
postage prepaid, to the following addresses:
If to Consultant, then to: Emerging Trends Linkages Corp.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to ADGI, then to: Xxxxxxx X. Xxxxxx, Ph.D.
American Diversified Group, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
or such other address as the parties may designate in writing to the other
party.
(h) Successors and Assigns: This Agreement shall be binding upon and
shall inure to the benefits of the parties hereto and their respective
successors and assigns. None of the parties hereto shall assign any of its
rights or obligations hereunder, without the express written consent of the
other party.
(i) Applicable Law: This Consulting Agreement shall be governed by and
shall be construed, interpreted and enforced in accordance with the laws of the
State of Florida.
(j) Attorney's Fees and Arbitration: In the event any suit or other
legal proceeding is brought for the enforcement of any of the provisions of this
Consulting Agreement the parties hereto agree that the prevailing party or
parties shall be entitled to recover from the other party or parties upon final
judgment on the merits reasonable attorney's fees, including attorney's fees for
any appeal, and costs incurred in bringing such suit or proceeding. However, the
parties expressly agree that in the event that there shall be any dispute
between them with respect to this Consulting Agreement, that such dispute shall
be
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submitted to binding arbitration before a panel under the rules and regulations
of the American Arbitration Association. Any determination that may result from
such arbitration shall be binding and enforceable against the appropriate party,
and may be enforced in a court of competent jurisdiction to the full extent
permissible under law.
AMERICAN DIVERSIFIED GROUP, INC.
BY: Xxxxxxx X. Xxxxxx, President/CEO (Seal)
--------------------------------
NAME (TITLE)
EMERGING TRENDS LINKAGES CORP.:
BY: Xxxxx X. Xxxxxx, President (Seal)
--------------------------
NAME (TITLE)
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EXHIBIT A
List of Target Customers and Former Customers
Mobil Oil
Eltin Mining
Xxxx
Xxxx Gold
Xxxxxxxx Gold
Consulate of Italy
BMCD
Canadian Embassy
Consolidated Mining
Eficka
Xxxxx
Xxxx
Foffy Industries
Dansb
GTZ-Germany
DeBeers-Semos
Anglo-American-Xxxxx
Xxxxxxx Gold Field
World Bank
World Health Organization
SGS
among other examples
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