EXHIBIT 10.43
AGREEMENT
This AGREEMENT (the "Agreement") is made and entered into as of the Effective
Date (as defined on the signature page hereof) by and between APPLIED VOICE
RECOGNITION, INC., d/b/a x-XXXX.xxx, a Delaware corporation (the "Company"), and
XXXXXX, XXXXXXX & PARTNER, INC. (the "Advisor"), a Utah corporation with offices
in Utah and Florida; the Company and the Advisor being hereinafter collectively
referred to as the "Parties" and generally as a "Party."
RECITALS
WHEREAS, the Advisor is experienced in the areas of marketing and financial
public relations.
WHEREAS, the Company desires to retain the Advisor's services and has
requested that the Advisor include the Company within its group of clients.
WHEREAS, the Advisor is agreeable to such an arrangement, subject to the
following terms and conditions.
NOW, THEREFORE, in consideration of the Advisor's agreement to render the
hereinafter described services based on the mutual promises and covenants of the
Parties, it is hereby agreed as follows:
ARTICLE ONE
RETENTION
1.1. The Company proposes to establish a second market for trading in Europe of
the Company's shares of common stock, $.001 par value per share (the "Common
Stock").
1.2 Advisor shall act as the Company's advisor regarding marketing and public
relation matters of the Company in Europe, and in connection therewith, Advisor
shall use Advisor's best efforts to assist the Company to take such steps as are
necessary to effectuate a listing of the Company's Common Stock on a stock
exchange in Germany. In respect of such efforts, Advisor specifically agrees to
provide each of the following services:
(a) Cause, at Advisor's sole cost, the Company's Common Stock to be listed
with the "Berliner Freiverkehr" on their stock exchanges in Berlin, Frankfurt,
Munich, Stuttgart, Duesseldorf and Hamburg (collectively, the "Exchange"),
within forty (40) days after the execution of the Agreement (the "Listing
Deadline").
(b) Assist the Company in informing the public (but not in the U.S.) as to
the existence of the Company and its business. In addition to the above,
Advisor shall not act as an agent of the Company or bind the Company to any
agreements unless specifically authorized in writing in advance by the Company.
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(c) Cause, at Advisor's sole cost, an in-depth profile of the Company to be
featured as the first six (6) minute segment in a 30 minute episode of the
television show "SMART BUSINESS" that is shown nationally in Germany on German
television. The terms and conditions of such feature are detailed in the
Participation Agreement attached hereto as EXHIBIT "A".
1.3. Disclosure. The Company will disclose to Advisor all publicly available
information with respect to the Company's contracts, binding agreements,
regulations and patents. The Company will also provide to the Advisor with
copies of such information that the Company would generally include in a public
offering memorandum if the Company were seeking to raise funds in the United
States.
1.4. Term.
(a) The term of this Agreement shall commence on the Effective Date and
shall continue for a period of one (1) year after the Effective Date (the
"Contract Period"), unless terminated earlier as set forth below.
(b) Notwithstanding the terms of Section 1.4(a): (i) if the Common Stock
is listed on the Exchange prior to the Listing Deadline, then following the
expiration of the Contract Period either Party may terminate this Agreement in
such Party's sole and exclusive discretion upon thirty (30) days written notice
to the other Party, and (ii) if the Common Stock is not listed on the Exchange
prior to the Listing Deadline, then either Party may terminate this Agreement in
such Party's sole and exclusive discretion immediately upon written notice to
the other Party, and Advisor shall refund FIFTEEN THOUSAND DOLLARS (US$15,000)
cash to the Company within five (5) business days after the date of such
termination.
(c) Either Party may terminate this Agreement prior to the end of the
Contract Period (i) if the other Party breaches any material term or condition
of this Agreement (other than failure to cause the Common Stock to be listed on
the Exchange prior to the Listing Deadline, with respect to which failure the
Parties termination rights are set forth in Section 1.4(b)) and such breach
continues unremedied for a period of thirty (30) days following receipt of
written notice of said breach by the non-breaching Party, or (ii) immediately
upon notice if the other Party (A) ceases to function as a going concern or to
conduct operations in the normal course of business; (B) has a petition or
action filed by or against it under any federal bankruptcy or state insolvency
law which petition or action has not been dismissed or set aside within ninety
(90) days of its filing; or (C) makes an assignment for the benefit of its
creditors.
(d) Upon the termination or expiration of this Agreement, neither Party
shall have any further rights or obligations hereunder except for the Parties'
respective obligations under any provisions of this Agreement which by their
terms are intended to survive expiration or termination of this Agreement.
ARTICLE TWO
ADVISOR'S FEE
2.1 Payment of Expenses. In consideration of the expenses to be incurred by
the Advisor in
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connection with a due diligence investigation of the Company and
the Company's business and the preparation of all documents required in
connection with the listing of the Common Stock on the Exchange, the Advisor
shall be entitled to receive the following:
(a) TWENTY-FIVE THOUSAND DOLLARS (US$25,000) cash payable on the Effective
Date.
(b) A Warrant to purchase FIVE HUNDRED THOUSAND (500,000) shares of the
Company's Common Stock at a strike price of US$0.35 per share, which Warrant
shall provide, in pertinent part, that (i) TWO HUNDRED FIFTY THOUSAND (250,000)
shares of Common Stock shall vest immediately upon the effectiveness of the
initial listing of the Company's Common Stock on the Exchange; (ii) the
remaining TWO HUNDRED FIFTY THOUSAND (250,000) shares of Common Stock shall vest
immediately upon the one (1) year anniversary of the date of the effectiveness
of the initial listing of the Company's Common Stock on the Exchange; (iii) the
Company shall have the option on April 2, 2001 or at any time thereafter to
cancel the Warrant to the extent of the 250,000 unvested shares of Common Stock
(those shares described in subparagraph (ii) above) if during the first calendar
quarter of 2001 (being from January 1 to March 31) the average daily volume of
shares of Common Stock traded on the Exchange (excluding any shares of Common
Stock traded on any United States based or other stock exchange or market) does
not exceed 200,000 shares; (iv) the Warrant shall automatically expire and be of
no further force or effect on such date that is eighteen (18) months after the
Effective Date. As of the Effective Date, neither the Warrant nor the shares of
Common Stock to be issued pursuant to the exercise of the Warrant (the "Warrant
Stock"), will have been registered for resale under applicable securities laws
and shall be restricted from being sold, conveyed or otherwise transferred by
Advisor pursuant to (A) the restrictive legends that will be affixed to the
Warrant and on the back of any certificate evidencing such Warrant Stock, and
(B) applicable securities laws. On or before December 31, 2000, the Company
shall use its best efforts to cause the sale, transfer or assignment of the
Warrant and the Warrant Stock pursuant to the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations
promulgated thereunder, all as the same shall be in effect at the time (the
"1933 Act"), to be registered pursuant to a registration statement filed with
the Securities and Exchange Commission (the "SEC"). Notwithstanding any other
term in this Agreement, the issuance of the Warrant shall be subject to the
Company's shareholders approving an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock, and the Company shall issue the Warrant to Advisor within five (5)
business days following the effective date of the filing of such amendment.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
The Company, with respect to matters relating to the Company and its
affiliates, and Advisor, with respect to matters relating to Advisor and its
affiliates, represent and warrant to each other as follows:
3.1 Available Information. The Company hereby represents, warrants and
covenants that it will keep the Advisor fully informed of all material publicly
available plans and developments affecting the Company and that such future
information will be true and will not omit to state a
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material public fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading.
3.2 Company Compliance with Applicable Law. The Company is in compliance with
all United States laws, ordinances and regulations applicable to its business,
with the exception of violations of such laws, ordinances and regulations that
would not individually or in the aggregate have a material adverse effect on the
Company or the Advisor.
3.3 Advisor Compliance with Applicable Law. The Advisor is in compliance with
all United States, local, state, federal, German, Austrian, Swiss, international
and other applicable laws ordinances and regulations applicable to its business,
marketing and listing at the stock exchange for the company with the exception
of violations of such laws ordinances and regulations which would not
individually or in the aggregate have a material adverse effect on the Advisor
or the Company.
3.4 Legal Proceedings. There is no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or foreign,
which has been served on the Company or Advisor or their respective affiliates
and is now pending or which, to the knowledge of the Company or Advisor, is
threatened against or materially affects the Company or Advisor or their
respective affiliates which has not been disclosed in writing. There are not
pending any governmental proceedings to which the Company or Advisor or their
respective affiliates are a party or to which any of their property is subject,
which has not been disclosed in writing. No judgment, injunction, restraining
order or order of any nature by any court of competent jurisdiction or
regulatory agency has been issued and/or remains in effect relating to any kind
of wrongdoing in connection with a securities transaction involving the Company,
Advisor or their respective affiliates.
3.5 Authority of Advisor. Advisor has the corporate power to enter into this
Agreement and to carry out the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by Advisor has been duly and validly
authorized and approved by all necessary corporate action on the part of Advisor
and this Agreement is the legal and binding obligation of Advisor. The entering
into of this Agreement by Advisor does not, and the consummation by Advisor of
the transactions contemplated hereby will not, violate the provisions of (i) any
applicable laws of the United States, Germany or any other country, state or
jurisdiction in which Advisor does business, (ii) the applicable corporate
document of Advisor and its subsidiaries or any amendments or modifications
thereto, or (iii) any judgment or decree applicable to Advisor or its
subsidiaries. No default or breach will occur in any material respect by virtue
of the consummation of the transactions contemplated herein under any material
contract, agreement, indenture or other instrument applicable to Advisor or its
subsidiaries.
3.6 Securities Representations and Warranties. Advisor makes the following
representations and warranties to the Company regarding the Warrant and the
Warrant Stock (the "Company Securities"):
(a) Advisor has been furnished with and has carefully read each of (i) the
Company' Annual Report on Form 10-K for fiscal year ended December 31, 1999, as
amended; and (ii) the Company' Quarterly Report on Form 10-Q for fiscal quarter
ended June 30, 2000. In evaluating
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the suitability of an investment in the Company, Advisor has not relied upon any
representations or other information (whether oral or written) from the Company
or of its agents, and no oral or written representations have been made or oral
or written information furnished to Advisor or its advisors, if any, in
connection with the acceptance of the shares of the Company Securities which
were in any way inconsistent with the information set forth in the documents
listed in the first sentence of this Section 3.6(a). The Company has granted to
Advisor and its representatives the opportunity to examine such documents and
ask such questions of the Company as Advisor has deemed necessary, and Advisor
has received satisfactory answers from the Company (or persons acting on the
Company's behalf) concerning the Company and the terms and conditions of the
Company Securities described herein and all other information they have deemed
necessary with making an informed investment decision. The Company will provide
to Advisor copies of all of the Company Quarterly Reports on 10-Q for each
fiscal quarter ended after the Effective Date and prior to the expiration or
termination of this Agreement, together with such additional information as
Advisor may reasonably request from the Company that is readily available to the
Company.
(b) The Company has made available to Advisor all documents and information
that Advisor has requested relating to an investment in the Company.
(c) Advisor recognizes that an investment in the Company involves
substantial risks, and Advisor has taken full cognizance of and understands all
of the risk factors related to the acceptance of the Company Securities.
(d) Advisor has carefully considered and have, to the extent Advisor
believes such discussion necessary, discussed with Advisor's professional legal,
tax and financial advisers the suitability of an investment in the Company for
Advisor's particular tax and financial situation, and Advisor has determined
that the Company Securities are a suitable investment for Advisor.
(e) All information which Advisor has provided to the Company concerning
Advisor and the financial position of Advisor is correct and complete as the
Effective Date.
(f) Advisor has such knowledge and experience in financial and business
matters that it is capable of (i) evaluating the merits and risks of an
investment in the Company Securities, and (ii) making an informed investment
decision.
ARTICLE FOUR
CONFIDENTIALITY, COMPETITION AND NON-CIRCUMVENTION
4.1 Confidentiality.
(a) "Confidential Information" shall include the financial terms and
conditions of this Agreement, user information and any other business
information of the disclosing Party ("Discloser") which is confidential or
proprietary, including, without limitation, the Company's technology, firmware,
source code, software tools, designs, schematics, plans or any other information
relating to any product or service, work in process, future development,
scientific, engineering, manufacturing, marketing or business plans, or
financial or personnel materials,
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future products, sales, suppliers, employees, investors or business.
(b) A Party receiving Confidential Information under this Agreement
("Recipient") shall use such Confidential Information of the Discloser only for
limited business purpose described herein. A Recipient's duty to protect
Confidential information disclosed under this Agreement extends for a period of
two (2) years from the date of each first disclosure of the particular
Confidential Information. A Recipient shall protect the disclosed Confidential
Information by using the same degree of care, but no less than a reasonable
degree of care, to prevent the dissemination to third parties or publication of
the Confidential Information as the Recipient uses to protect its own
confidential information of a like nature.
4.2 Duty. This Agreement imposes no obligation upon a Recipient with respect
to Confidential Information which (a) was in the Recipient's possession before
receipt from the Discloser, (b) is or becomes a matter of public knowledge
through no fault of the Recipient, (c) is rightfully received by the Recipient
from a rightfully possessing third party without a duty of confidentiality, (d)
is disclosed by the Discloser to a third party without a duty of confidentiality
on the third party; (e) is required to be disclosed by court order or other
lawful governmental action, but only to the extent so ordered or pursuant to any
applicable securities exchange requirement, and provided that the Recipient
promptly notifies the Discloser so that the Discloser may attempt to obtain a
protective order, or (f) is disclosed by the Recipient with the Discloser's
prior written approval in accordance with said written approval. Each Discloser
warrants that it has the right to freely make the disclosures under this
Agreement.
4.3 Competition and Non-Circumvention.
(a) There are no restrictions against competition imposed by this
Agreement, it being understood by the Parties that this is a non-exclusive
agreement.
(b) Because of the Confidential Information to be obtained by or disclosed
to the Company, as hereinabove set forth, and as a material inducement to the
Parties' entry into this Agreement, the Parties each hereby covenants and agrees
as follows:
(1) During the term of this Agreement and as long as the other Party
is not in default herewith, each of the Parties shall not, directly or
indirectly, solicit business from, divert business from, or attempt to
convert to other methods of using the same or similar services as provided
to the other Party by such Party in Germany (with respect to Advisor's
services), and in the United States, Germany and all other countries of the
world (with respect to the Company's products and services); and
(2) During the term of this Agreement, neither Party shall, directly
or indirectly, solicit for employment or employ any employee of the other
Party or such other Party's affiliates.
4.4 Acknowledgment of Reasonableness. Both Parties hereby represent, warrant
and acknowledge that it has carefully read and considered the provisions of this
Article Four and, having done so, agrees that the restrictions set forth herein
are fair and reasonable and are reasonably required for the protection of the
interests of the Advisor, Company, their respective
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shareholders, officers, directors, employees and representatives.
ARTICLE FIVE
MISCELLANEOUS
5.1 Notices. Any notice or other communication required or permitted by this
Agreement shall be deemed to have been validly delivered (i) five (5) business
days after mailing if the same shall be mailed by registered or certified mail,
postage prepaid, and addressed to the proper Party at its respective address,
(ii) one (1) business day after delivery to a private courier guaranteeing same
day or next day delivery, and addressed to the proper Party at its respective
address, (iii) on the date of facsimile transmission if sent by facsimile to the
proper Party at its respective facsimile number, and if a confirmation copy of
the facsimile transmission is sent by registered or certified mail, postage
prepaid, or by private same day or next day courier, and addressed to the proper
Party at its respective address, and (iv) on the date of email transmission if
sent by email to the proper Party at its respective email address, and if a
confirmation copy of the email transmission is sent by facsimile to the proper
Party at its respective facsimile number and by registered or certified mail,
postage prepaid, or by private same day or next day courier, and addressed to
the proper Party at its respective address. Any notice or other communication
received at the addressee's location after 5:00 p.m. shall be deemed to have
been received at 9:00 a.m. on the next business day at the addressee's location.
With respect to Advisor, all notices shall be addressed to:
Xxxxxx, Xxxxxxx & Partner, Inc.
000 Xxxx Xxxxxxxx Xxx.
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Tel.: (000) 000 0000
Fax: (000) 000 0000
Email: xxx@xxx-xxx.xxx
With respect to the Company, all notices shall be addressed to:
Applied Voice Recognition, Inc.
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Tel.: (000) 000-0000
Fax: (000) 000-0000
Email: xxx@x-XXXX.xxx
Either Party may change the address at which it desires to receive notice upon
ten (10) day's written notice of such change to the other Party.
5.2 Amendment. No modification, waiver or change of this Agreement shall be
valid unless the same is in writing and signed by both Parties.
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5.3 Merger. This Agreement shall bind and inure to the benefit of the Parties
hereto and their successors and assigns. This document and the Warrant to be
issued hereunder contain the entire agreement between the Parties with respect
to the subject matter hereto. There are no understandings, representations or
warranties except as expressly set forth herein and in the Warrant.
5.4 Survival. The representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
5.5 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision, the remaining provisions being deemed to continue in full force and
effect.
5.6 Governing Law and Venue. The interpretation and construction of this
Agreement, and all matters relating thereto, shall be governed by the laws of
the State of Texas without regard to Texas' "conflict of law" rules. The
Parties acknowledge that this Agreement is to be at least partially performed in
Xxxxxx County, Texas, and, therefore, subject to the terms of Section 5.7 any
judicial proceeding brought to enforce this Agreement, or any matter related
thereto, shall be brought in the appropriate courts for Xxxxxx County, Texas, or
the appropriate United States District Court located in Xxxxxx County, Texas.
By execution of this Agreement, each Party accepts and agrees to the exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement.
5.7 Enforcement/Disputes Subject to Arbitration.
(a) Claims Covered. The Company and the Advisor mutually consent to the
resolution by arbitration of all claims or controversies ("Claims"), that the
Company may have against the Advisor or against its officers, directors,
employees, or agents, in their capacity as such or otherwise, or that the
Advisor may have against the Company or against its officers, directors,
employees, or agents, in their capacity as such or otherwise. The Claims
covered by this Section 5.7 include, but are not limited to, claims for
violation of any federal, state or other governmental law, statute, regulations,
or ordinance, except Claims excluded in Section 5.7(b).
(b) Claims Not Covered. Claims the Parties may have against the other for
injunctive relief for unfair competition and/or the use and/or unauthorized
disclosure of trade secrets or confidential information, are not subject to this
Section 5.7, and both Parties understand and agree that the other Party may seek
and obtain relief from a court of competent jurisdiction.
(c) Required Notice of all Claims and Statue of Limitations. The Company
and the Advisor agree that the aggrieved Party must give written notice of any
Claims to the other Party within one hundred eighty (180) days of the occurrence
giving rise to the Claim (each, a "Claim Notice"), and file any arbitration or
suit within one (1) year; otherwise, the Claim shall be void and deemed waived
even if there is a federal or state statute of limitations which would have
given more time to pursue the Claim. The written notice shall identify and
describe the nature of all Claims asserted and the facts upon which such Claims
are based.
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(d) Representation. Any Party may be represented by an attorney or other
representative selected by such Party.
(e) Discovery. Each Party shall have the right to take the deposition of
one (1) individual and any expert witness designated by the another Party. Each
Party also shall have the right to make requests for production of up to twenty
(20) categories of documents to any Party. Additionally, each Party shall have
the right to serve not more than ten (10) interrogatories (including all
subparts) to any Party. The subpoena right specified below shall be applicable
to discovery pursuant to this Section 5.7(e). Additional discovery may be had
only where the Arbitrator selected pursuant to this Agreement so orders, upon a
showing of substantial need.
(f) Mediation. If the Parties are not able to resolve the Claim within
five (5) days after any party receives a Claim Notice, then, within five (5)
days immediately after the expiration of the aforesaid five (5)-day period, the
Parties shall attempt to agree upon an independent mediator. If the Parties are
unable to reach an agreement upon an independent mediator within such second
five (5)-day period, then any Party shall be entitled to request that the
Judicial Arbitration & Mediation Service, Inc. ("JAMS") (or similar mediation
service of a similar national scope if JAMS no longer then exists) appoint an
independent mediator who shall serve as mediator for all purposes hereof. The
Parties agree that they shall each pay one-half (1/2) of the mediator's
services. The cost of the mediator's services shall be paid in advance upon
request by the mediator or any other Party. Within ten (10) days after
selection of the mediator, the mediator shall call for and set a meeting among
the Parties and the mediator for the purpose of mediating the Claim. If the
Parties are unable to resolve the Claim within thirty (30) days after the Claim
Notice (the "Mediation Period"), the Claim shall be decided by arbitration, if
such a demand is timely filed.
(h) Arbitration Procedures. The Company and the Advisor agree that, except
as provided in this Agreement, any arbitration shall be in accordance with the
then-current Commercial Arbitration Rules of JAMS before an arbitrator who is
licensed to practice law in the State of Texas (the "Arbitrator"). The
arbitration shall take place in Houston, Texas.
(1) The Arbitrator shall be selected as follows: JAMS shall give
each Party a list of five (5) arbitrators drawn from its panel of
commercial arbitrators. Each Party may strike all names on the list it
deems unacceptable. If only one common name remains on the lists of all
Parties, that individual shall be designated as the Arbitrator. If more
than one common name remains on the lists of all Parties, the Parties shall
strike names alternately until only one remains. The Party who did not
initiate the Claim shall strike first. If no common name remains on the
lists of all Parties, JAMS shall furnish an additional list or lists until
an Arbitrator is selected.
(2) The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the State of Texas, or federal law, or both, as
applicable to the Claim(s) asserted. The Texas Rules of Evidence shall
apply. The Arbitrator, and not any federal, state, or local court or
agency, shall have exclusive authority to resolve any dispute relating to
the interpretation, applicability, enforceability, or formation of this
Agreement, including but not limited to any Claim that all or any part of
this Agreement is void or voidable. The arbitration shall be final and
binding upon the Parties, except as provided
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in this Agreement.
(3) The Arbitrator shall have jurisdiction to hear and rule on pre-
hearing disputes and is authorized to hold pre-hearing conferences by
telephone or in person as the Arbitrator deems necessary. The Arbitrator
shall have the authority to entertain a motion to dismiss and/or a motion
for summary judgment by any Party and shall apply the standards governing
such motions under the Texas Rules of Civil Procedure.
(4) At least thirty (30) days before the final arbitration hearing,
the Parties must exchange lists of witnesses, including any expert, and
copies of all exhibits intended to be used at the arbitration.
(5) Each Party shall have the right to subpoena witnesses and
documents for arbitration, including service of document subpoena during
discovery.
(6) Either Party, at its expense, may arrange for and pay the cost of
a court reporter to provide a stenographic record of proceedings.
(7) Either Party, upon request at the close of any hearing, shall be
given leave to file a post-hearing brief. The time for filing such a brief
shall be set by the Arbitrator.
(8) Either Party may bring an action in a court as provided in Section
5.6 to compel arbitration under this Agreement and to enforce an
arbitration award. Except as otherwise provided in this Agreement, both
the Company and the Advisor agree that neither shall initiate or prosecute
any lawsuit or administrative action (other than as required by applicable
law) in any way related to any Claim covered by this Agreement.
(9) The Arbitrator shall render an award and opinion in the form
typically rendered in arbitrations.
(i) Arbitration Fees and Costs. The Company and the Advisor shall equally
share the fees and costs of the Arbitrator. Each Party will deposit funds or
post other appropriate security for its share of the Arbitrator's fee, in an
amount and manner determined by the Arbitrator, 10 days before the first day of
hearing. However, the prevailing Party shall be entitled to recover from the
non-prevailing Party in accordance with Section 5.8 of this Agreement, and the
Arbitrator may award such fees.
(j) No Appeal. The Parties intend any decision of the Arbitrator to be
binding absent fraud or corruption of the Arbitrator. As such, any award of the
Arbitrator may only be appealed in the circumstance of fraud or corruption in
the arbitration proceeding.
(k) Interstate Commerce. The Advisor understands and agrees that the
Company is engaged in transactions involving interstate commerce and that the
Advisor's services involve such commerce.
(l) Requirements for Modification or Revocation. The agreement to
arbitrate set forth in this Section 5.7 shall survive the termination or
expiration of the term of this Agreement.
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Such agreement to arbitrate can only be revoked or modified by a writing signed
by the Parties which specifically states an intent to revoke or modify such
agreement to arbitrate.
5.8 Litigation. In the event either Party brings an action or suit to enforce
or interpret this Agreement or for damages on account of the breach of a
covenant or representation or warranty contained herein, the prevailing Party
shall be entitled to recover from the other Party its reasonable attorneys' fees
and costs (including costs of arbitration) incurred in any such action, in
addition to other relief to which the prevailing Party is entitled.
5.9 Indemnification.
(a) The Company (as the "Indemnifying Party") agrees to indemnify and hold
harmless Advisor and each person that controls Advisor within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the respective agents, employees,
attorneys, officers and directors of each of the foregoing (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") from and
against any and all losses, claims, damages, judgments, liabilities and expenses
(including the reasonable fees and expenses of counsel and other expenses in
connection with investigating, defending, preparing to defend or testify with
respect to or settling any such action or claim) as they are incurred arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact relating to the Company contained in any offering documents or
arising out of or based upon any omission or alleged omission to state therein a
material fact relating to the Company required to be stated therein or necessary
to make the statements therein not misleading or otherwise arising out of or
based upon the listing of the Common Stock on the Exchange, except the
Indemnifying Party shall not be liable to an Indemnified Party under the
indemnity agreement in this Section 5.9(a) with respect to any such loss, claim,
damage, judgment, liability or expense to the extent either (i) it results from
or is attributable to the negligence, misrepresentations, unauthorized
representations or other misconduct of Advisor; (ii) the Advisor did not get the
Company's prior written approval with respect to the use of sales brochures,
sales contracts, sales literature, promotional materials or other verbal or
written representations, warranties, discussions or descriptions of the Company
used in connection with the sale of the Common Stock; or (iii) it results from
or is attributable to the Advisor's failure to abide by German law or any other
applicable.
(b) Advisor (as the "Indemnifying Party") agrees to indemnify and hold
harmless the Company and each person that controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act and the
respective agents, employees, attorneys, officers and directors of each of the
foregoing (individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all losses, claims, damages,
judgments, liabilities and expenses (including the reasonable fees and expenses
of counsel and other expenses in connection with investigating, defending,
preparing to defend or testify with respect to or settling any such action or
claim) as they are incurred to the extent either (i) it results from or is
attributable to the negligence, misrepresentations, unauthorized representations
or other misconduct of Advisor; (ii) the Advisor did not get the Company's prior
written approval with respect to the use of sales brochures, sales contracts,
sales literature, promotional materials or other verbal or written
representations, warranties, discussions or descriptions of the Company used in
connection with the sale of the Common Stock; or (iii) it results from or is
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attributable to the Advisor's failure to abide by German law or any other
applicable law.
(c) If any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against or shall
relate to any Indemnified Party with respect to which indemnity may be sought
against the Indemnifying Party pursuant to this Section 5.9, such Indemnified
Party shall promptly notify the Indemnifying Party in writing and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party and
payment in advance of all fees and expenses; provided that the omission so to
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it may have to any Indemnified Party (except to the extent that
the Indemnifying Party is actually prejudiced or otherwise forfeits substantive
rights or defenses by reason of such failure). An Indemnified Party shall have
the right to employ separate counsel in any such action or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment of
such counsel has been specifically authorized in writing by the Indemnifying
Party, which authorization shall not be unreasonably withheld, (ii) the
Indemnifying Party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to the Indemnified Party, or (iii) the named parties to
any such action or proceeding (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and such Indemnified Party shall
have been advised in writing by counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of such
Indemnified Party). It is understood that the Indemnifying Party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Parties, which firm shall be designated in writing by such
Party, and that all such fees and expenses shall be reimbursed as they are
incurred.
(d) The Indemnifying Party shall not be liable for any settlement of any
such action effected without the written consent of the Indemnifying Party, but
if settled with the written consent of the Indemnifying Party, or if there is a
final judgment with respect thereto, the Indemnifying Party agrees to indemnify
and hold harmless each Indemnified Party from and against any loss or liability
by reason of such settlement or judgment. The Indemnifying Party shall not,
without the prior written consent of each Indemnified Party affected thereby,
effect any settlement of any pending or threatened proceeding in which such
Indemnified Party has sought indemnity hereunder, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
arising cut of such action, claim, litigation or proceeding, and such settlement
does not require such Indemnified Party to admit to any fault.
5.10 Assignment. Advisor shall not be entitled to transfer or assign this
Agreement in whole or in part, whether voluntary or involuntary, by operation of
law or otherwise, without Company's prior written consent.
5.11 Titles and Headings. Titles and headings in this Agreement are for
convenience of reference only and shall not affect the construction of any
provisions of this Agreement.
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5.12 Pronouns. All pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
Parties may require.
5.13 Further Actions. The Company and Advisor agree to execute such additional
documents and take such further actions as may reasonably be required to carry
out each of the provisions and the intent of this Agreement.
5.14 Status. The Parties are and shall be independent contractors to one
another, and nothing herein shall be deemed to cause this Agreement to create an
agency, partnership, or joint venture between the Parties. Nothing in this
Agreement shall be interpreted or construed as creating or establishing the
relationship of the Company and employee between the Parties hereto.
5.15 Counterparts. This Agreement may be executed in any number of duplicate
originals or counterparts, each of which shall be of equal force and effect.
5.16 Signing. Each person who signs this Agreement warrants that he/she does so
with the full and legal authority to execute this Agreement on behalf of the
respective Parties of this Agreement
5.17 Construction. This Agreement shall not be construed against the Party
preparing it, and shall be construed without regard to the identity of the
person who drafted it or the Party who caused it to be drafted and shall be
construed as if all Parties had jointly prepared this Agreement and it shall be
deemed their joint work product, and each and every provision of this Agreement
shall be construed as though all the Parties hereto participated equally in the
drafting hereof; and any uncertainty or ambiguity shall not be interpreted
against any one Party. As a result of the foregoing, any rule of construction
that a document is to be construed against the drafting Party shall not be
applicable.
5.18 Publicity and Disclosures. No press releases or any public disclosures,
whether written or oral, of the transactions contemplated by this Agreement
shall be made without the prior knowledge and written consent of the Company,
except for marketing purpose and other necessary releases.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as
of the ____ day of October 2000 (the "Effective Date").
COMPANY:
APPLIED VOICE RECOGNITION, INC., d/b/a
x-XXXX.xxx
By:________________________________________
Xxxxx X. Xxxxxxxxxxx, President and CEO
ADVISOR:
XXXXXX, LOMBARD & PARTNER, INC.
By:________________________________________
Xxxx X. Xxxxxxxx, President
Signature Page to
Agreement
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