EXHIBIT 4.13
FINANCIAL PUBLIC RELATIONS
CONSULTING AGREEMENT
This Financial Public Relations Consulting Agreement, (the "the Agreement") is
entered into this 31st day of May, 2001, by and between Telenetics Inc. ("TLNT")
a California Corporation with principle offices at 00000 Xxxxx Xxxxx, Xxxx
Xxxxxx, XX 00000; and Alliance Corporate Services, Inc. ("ACS") a Canadian
corporation, with principal offices at #00X-0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx
X.X., X0X 0X0.
RECITALS
WHEREAS: TLNT desires to engage ACS to perform consulting services for TLNT's
financial public relations requirements in the area of investor relations and
broker/dealer relations.
WHEREAS: ACS desires to provide its expertise and consulting services to TLNT's
financial public relations activities involving TLNT's business relations and
working relationships with public/private/institutional investors,
broker/dealers and financial advisors/analysts in the securities and financial
services community.
AGREEMENT
WITNESSETH: In consideration of the mutual promises and covenants contained in
this Agreement, the parties hereto agree as follows:
1) TERM OF THE AGREEMENT: The term of this Agreement shall be for
a period of six (6) months commencing on May 31, 2001. Either
party, in accordance with the provisions as set forth in
Section 6, may terminate this Agreement.
2) CONSULTING SERVICES: ACS will provide consulting services to
TLNT regarding financial public relations; subject to the
condition that ACS shall not be required to be registered and
licensed with any federal or state regulatory body or
self-regulating agency. During the term of this Agreement ACS
will provide those usual customary services performed by a
financial public relations firm to a public corporation
including, but not necessarily limited to, the following:
2.1) Install and maintain a toll free phone line for all
investor inquiries;
2.2) Update and manage the TLNT shareholder database,
which will be used for direct shareholder
communications;
2.3) Assist in developing a financial public relations
program designed to increase awareness of TLNT within
the public and private investment community.
2.4) Introduce TLNT to brokers and fund managers for the
purpose of investing in the company in the market or
through private placement;
2.5) Assist TLNT in the preparation and dissemination of
due diligence packages, Corporate profiles and fact
sheets requested by and furnished to NASD registered
broker/dealers, and/or other institutional and/or
fund managers requesting such information concerning
TLNT and conduct all appropriate follow-up;
2.6) Work with analysts and newsletter writers to ensure
they understand TLNT and give it fair review;
2.7) Make corporate introductions, suggestions, studies,
etc., to assist the company in implementing its
business plan;
2.8) Assist TLNT in preparing and disseminating press
releases and news Announcements if required.
All of the foregoing documentation and information concerning TLNT shall be
prepared by ACS only from materials and information supplied by TLNT, including,
but not limited to, due diligence reports, corporate profiles, fact sheets and
newsletters, and said foregoing documentation and information concerning TLNT
shall be approved by TLNT, in writing, prior to dissemination by ACS.
3) REQUIREMENTS OF TLNT:
3.1) TLNT shall deliver to ACS within seven (7) days after
the execution of this Agreement, the following:
a) A complete TLNT due diligence package, which
shall include all of TLNT's filings with the
Securities and Exchange Commission for the
previous twelve months;
b) Copies of all TLNT's press releases for the
previous twelve months;
c) Copies of all other relevant TLNT materials,
such as company reports or brochures;
d) A list of the brokers and market makers for
TLNT's securities and;
e) A list of analysts or fund managers
interested in or following TLNT's
securities;
f) A recent TLNT shareholder's list with all
available addresses both postal and email;
g) A summarized history of all TLNT equity
issuances, including information on issue
price, regulation S or 144 status, pending
or promised registrations, all escrowed
shares and estimated dates of release from
escrow.
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3.2) TLNT will promptly review materials created and
submitted by ACS and inform ACS, in writing of any
inaccuracies contained therein prior to the
distribution of said materials by ACS to other
parties.
3.3) Immediately give written notice to ACS of any change
in TLNT's financial condition or in the nature of its
business or operations which had or might have an
adverse material effect on its operations, assets,
properties or prospects of its business.
3.4) Give full details of all material facts concerning
TLNT to ACS and update such information on a timely
basis.
4) COMPENSATION FOR SERVICES: Upon execution of this Agreement,
TLNT hereby covenants and agrees to pay ACS as follows:
4.1) Fifth thousand (50,000) shares of common stock of
TLNT as a signup bonus.
4.2) Two thousand United States dollars (USD $2,000) per
month or four thousand shares of TLNT per month at
the sole option and discretion of TLNT, with monthly
payments payable in advance on the 1st of each
respective month for the term of the Agreement.
4.3) Three warrants to purchase shares from TLNT; the
first shall be for fifty thousand shares of TLNT, at
a price of USD $0.75, the second shall e for fifty
thousand shares of TLNT, at a price of USD $1.00 and
the third shall be for one hundred thousand shares of
TLNT, at a price of USD $2.00.
4.4) All warrants shall be valid for eighteen months from
the commencement date of this contract and all share
issue or issuable under this section shall have
piggyback registration rights.
5) REIMBURSEMENT FOR EXPENSES. TLNT shall, subject to its prior
written approval, pay all reasonable costs and expenses
incurred by ACS, its directors, its officers, employees and
agents, in the performance of its consulting services as set
forth in Section 2 above, excluding ACS's general and
administrative costs. Such expenses shall include the
following:
5.1) Usual and customary travel expenses provided such
expenses are incurred solely on behalf of TLNT.
5.2) Admission fees to financial and/or investment events
when such fees are incurred solely on behalf of TLNT.
5.3) Internet, Radio, TV and print media advertising
expenses.
5.4) Printing and publication expenses of marketing
materials not provided by TLNT.
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5.5) Postage and handling costs of any bulk mailings and
courier costs for dissemination of due diligence
packages of TLNT.
5.6) All costs associated with the startup, usage charges
and maintenance charges of a dedicated toll free
telephone number.
5.7) TLNT shall pay in advance or reimburse ACS for the
above expenses as planned or incurred within ten (10)
days of receipt of invoice.
6) TERMINATION: Except as provided for in Section 7.3, this Agreement may
be terminated by either party upon thirty (30) days written notice,
delivered to the other party as provided for and set forth in Section
11 below. In the event this agreement is terminated by TLNT, all
compensation paid to ACS by TLNT pursuant to Section 4.1 and Section
4.2 shall be deemed earned.
7) REPRESENTATIONS AND WARRANTIES OF ACS. ACS represents and warrants to
TLNT the following:
7.1) ACS is a corporation duly organized and validly existing
under, and by virtue of, the laws of the Province of British
Columbia, Canada and is in good standing under such laws. ACS
has all requisite power and authority, corporate and
otherwise, to operate its business as presently conducted and
to provide the consulting services as proposed herein. ACS has
not taken any action, adopted any plan, or made any agreement
in respect of any merger, consolidation or sale of any
reorganization, dissolution, or liquidation. ACS has all
requisite legal or corporate power and authority to execute
and deliver this Agreement and perform its obligations under
the terms of this Agreement. ACS is not in violation of its
Articles of Incorporation or its by-laws and this Agreement
does not conflict with the foregoing or any other agreement.
7.2) ACS is not in violation of any law or regulation or under any
order of any court or municipal or other governmental
department, commission, board, bureau, agency or
instrumentality having jurisdiction which would have a
material adverse effect on its ability to perform the
consulting services described herein during the Term of this
Agreement. ACS has conducted and is conducting its business in
substantial compliance with the requirements, standards,
criteria and conditions set forth in all applicable statutes,
ordinances, permits, licenses, orders, approvals, variances,
rules, regulations, judgments and decrees and is not in
violation of any of the foregoing which might have a material
adverse effect on the business or assets of ACS.
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7.3) There are no claims, actions, suits, governmental
investigation, arbitration, legal, administrative or other
proceeding of any nature, pending or, to the knowledge of ACS
threatened against ACS or its operations, properties, assets,
financial condition or prospects at law or in equity, domestic
or foreign, criminal or civil, or before or by any
governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over ACS either in Canada
or the United States, and no notice of any claim, action, suit
or proceeding, whether pending or threatened, that shall
impede or interfere with ACS's service performance
requirements as set forth in this Agreement. ACS further
represents that neither it nor any of its officers, directors,
employees, agents and affiliates is not now or has ever been
the subject of, a U.S. Securities and Exchange Commission
("SEC") investigation or the enforcement action of any agency
or been prosecuted for, or convicted of, a felony, which has
not been disclosed to TLNT prior to the execution of this
Agreement.
7.4) During the term of this Agreement, if ACS or any of its
officers, directors, employees, agents and affiliates is
notified by the SEC or any Canadian agency of a pending or
ongoing investigation, ACS shall within 24 hours, notify TLNT
to its fax number as provided in Section 11. Failure by ACS to
disclose to or notify TLNT as described herein shall be cause
for TLNT to immediately declare this Agreement terminated
without the required thirty-day notice.
7.5) No representative or warranty made by ACS herein, or in any
document delivered by ACS to other parties, pursuant to this
Agreement, shall contain any misstatement of any material fact
or omits to state, any material fact necessary to make any
material statement made not misleading.
7.6) ACS and its independent counsel have been offered every
opportunity to ask any questions and make any inquiry with
respect to TLNT and this Agreement ACS has not relied in any
manner on any other representations either oral or written
furnishes to it by TLNT.
8) REPRESENTATIONS AND WARRANTIES OF TLNT.
8.1) TLNT is a corporation duly organized and validly existing
under, any by virtue of, the law of California and is in good
standing under such laws. TLNT has all requisite legal
corporate power and authority to execute and deliver this
Agreement and perform its obligations under the terms of this
Agreement.
8.2) Delivery of TLNT shares will transfer to ACS good and
marketable title to TLNT shares, free and clear of any liens.
TLNT is not in violation of its Certificate of Incorporation
or Bylaws, or in any material respect in violation of any term
or provision of any material agreements to which it is a
party. Neither the execution, delivery, nor any violation of,
or conflict with, or has resulted or will result in, any of
the foregoing corporate documents or agreements. This
Agreement is a legal, valid and binding obligation of TLNT.
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8.3) No representation or warranty made by TLNT herein, or in any
document delivered by TLNT to other parties, pursuant to this
Agreement, shall contain any misstatement of any material fact
or omits to state, any material fact necessary to make any
material statement made not misleading.
8.4) There are no facts, which TLNT has not disclosed, in SEC
filings or press releases, which materially adversely affects,
or, may adversely affect the business, operations, prospects,
assets, profits or condition (financial or otherwise) of TLNT.
8.5) TLNT has had independent legal counsel review and advise on
the contents of this Agreement and will maintain independent
legal counsel to advise TLNT on all matters concerning, but
not necessarily limited to, corporate relations, investor
relations and all manners concerning and in connection with
TLNT activities regarding the Securities Act of 1933 and 1934,
and state Blue Sky laws.
9) LIMITED LIABILITY. Pursuant to the terms of this Agreement, ACS shall
not be liable to TLNT, or to any third party claimant due to any
relationship with TLNT, for any acts or omissions in the performance of
services by ACS herein defined, or by the officers, directors, agents
or employees of ACS, except when said acts or omissions of ACS are due
to its willful misconduct. If ACS fails to perform its services
hereunder, its liability to the TLNT shall not exceed the actual
monetary value of this contract. In no event will ACS be liable for any
indirect, special or consequential damages resulting from any claim
against TLNT by any person or entity relating to this agreement, unless
such damages result from the use, by ACS, of information not authorized
by TLNT, or from acts or omissions of the ACS are due to is willful
misconduct.
10) NONDISCLOSURE. Except as may be required by law, neither TLNT nor ACS,
their officers, directors, employees, agents and affiliates shall
disclose the contents and provisions of this Agreement to any
individual or entity without the other party's expressed written
consent, except disclosure to each party's counsel, accountants and
other persons performing investment banking, financial, or related
functions for said party.
11) NOTICES. Notices to be sent pursuant to the terms and conditions of
this Agreement, shall be sent as follows:
If to TLNT: If to ACS:
Xxxxx Xxxxxxxx Xxxx Xxxxx Laipnieks
Telenetics Corporation Alliance Corporate Services, Inc.
25111 Artic Ocean Drive 12A-1950 Government St.
Lake Forest, California Victoria, British Columbia
X.X.X. 00000 Xxxxxx X0X 0X0
(000) 000-0000 (telefax) (000) 000-0000 (telefax)
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Except as provided for in Section 7.3, any notice or other
communications required to be given hereunder in writing, and shall be
deemed to have been duly given when delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid
to the parties hereto as their respective principal business offices.
12) ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the Parties in relation to its subject matter and supersedes
and voids all prior written agreements between the parties.
13) AMENDMENT OF AGREEMENT. This Agreement may be altered or amended, in
whole or in part, only in writing executed by both parties.
14) SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to
the benefit of the parties and their respective heirs, executors,
administrations, legal representatives, successors, and assigns.
15) WAIVER. No waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other subsequent breach of condition,
whether of a like or different nature, unless such shall be signed by
the person making such waiver and/or which by its terms so provides.
16) SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall
attach only to such provision of this Agreement, and this Agreement
shall be carried out as if such invalid or unenforceable provision were
not contained herein.
Alliance Corporate Services Inc.
Per: /s/ Xxxx X. Xxxxxx Date June 7, 2001
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Telenetics Inc.
Per: /s/ Xxxxx Xxxxxxxx Xxxx Date May 31, 2001
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