EXHIBIT 10.1
ENGAGEMENT AGREEMENT
This Engagement Agreement (this "Agreement") is made this 28th day of
April, 2005, by and between (i) DataMeg Corp (the "Company"), a Delaware
corporation with its principal place of business at 0 Xxxx Xxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxxxxx 00000, and (ii) 350 Group LLC ("350 Group"), a Delaware
limited liability company, with its principal place of business at 000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000.
RECITALS
WHEREAS, the Company, through its direct wholly-owned subsidiary, North
Electric Company, Inc., a North Carolina corporation, owns certain VoIP
monitoring, voice quality measurement, and fault isolation methodologies,
software and related technology and has certain technical and services expertise
related thereto which it wishes to broadly market and sell;
WHEREAS, 350 Group has business development, management consulting, and
corporate financing expertise; and
WHEREAS, the Company desires to engage the services of the 350 Group and 350
Group desires to be engaged for the services and responsibilities set forth
herein (the "Engagement");
NOW THEREFORE, in consideration of the mutual covenants and promises herein
and other valuable consideration, the receipt and adequacy of which each party
acknowledges, the parties, intending to be legally bound, agree as follows:
1. OBJECTIVE OF ENGAGEMENT; SERVICES OF 350 GROUP
The objective of this Engagement shall be for 350 Group to assist the Company
in navigating from its developmental stage operations to the level of
sustainable commercial going concern. For the Term of Engagement (as
hereinafter defined), 350 Group agrees to provide to the Company a range of
consultative and related services which shall include, but not necessarily be
limited to, the following: (i) identifying, evaluating and advising in relation
to the Company's current financial, operational, managerial, strategic and/or
business model needs and objectives, (ii) preparing and coordinating with the
Company and others in the development of appropriate confidential descriptive
memoranda, investor presentations and financial models which can be used for the
purposes of developing potential investor participation in the Company, (iii)
identifying potential sources of private and/or public financing ("Financing
Sources"), including those involving transactions requiring issuance by the
Company of either equity, debt and/or equity-linked securities ("Financing
Transactions") and advising in relation to potential Financing Transactions,
(iv) identifying potential trading partners, contract manufacturers, marketing
and distribution alliances, licensees, multi-level marketing channels and/or
joint venture partners ("Strategic Relations") and negotiating, structuring
and/or advising in connection with the establishment and ongoing development of
Strategic Relations, and (v) such other matters as outlined in Exhibit A hereto,
and may be mutually agreed upon from time to time.
2. TERM OF ENGAGEMENT
The Engagement shall be effective as of the date of this Engagement Agreement
(subject to the Company satisfying the conditions precedent to effectuation of
this Agreement) for a period of thirty six (36) months, or if terminated early,
pursuant to the early termination provisions set forth in Section 5, until the
Termination date (the "Term of Engagement" or "Term"). Thereafter, the
Engagement shall automatically renew on a month-to-month basis, subject to the
right of either party to terminate the Engagement in accordance with Section 5
hereof, as of the end of any given month by giving written notice to the other
party at least thirty (30) days prior to the end of any month. The date upon
which the Agreement expires or is terminated, as provided in this Section 2 and
Section 5 hereafter, shall be known as ("Termination").
3. COMPENSATION
In consideration for the services rendered by 350 Group to the Company
pursuant to this Agreement, and throughout the Term of Engagement, the Company
shall compensate 350 Group according to the schedules set forth in Exhibit B.
4. EXPENSES
The Company shall reimburse 350 Group, promptly upon submission of
documentation evidencing expenses for all allowable fees and disbursements of
350 Group's travel and out-of-pocket expenses reasonably incurred in connection
with the services performed by 350 Group pursuant to this Agreement, including
without limitation, airfare, hotel, food and associated expenses, long-distance
telephone calls, and mileage (reimbursed at the standard federal government rate
of $0.365 per mile). The Company further agrees that wherever possible, it will
utilize the Company's travel agency account in arranging for airfare for 350
Group personnel. All reimbursable travel will be subject to the Company's pre-
approval.
5. TERMINATION
After the first 180 days of the Term, a party shall have the right to
terminate the Engagement by giving written notice to the other party at least
thirty (30) days prior to the effective termination date. Upon any such
Termination, the Company shall promptly pay all outstanding invoices owed to 350
Group and 350 Group shall provide to the Company a definitive list of all the
parties to whom 350 Group has introduced the Company in accordance with this
Agreement. Receipt of this list shall constitute the Company's agreement with
the names contained therein unless within ten (10) business days of receipt of
same, the company notifies 350 Group that it disputes particular names on the
list. In such event, the parties agree to negotiate in good faith to develop a
mutually agreeable subset of such parties. Failure of the Company to acknowledge
this list will be deemed that the Company agrees with every party listed on 350
Group's original submission of the list. Notwithstanding the foregoing, in the
event the Company breaches any aspect of this agreement or 350 Group becomes
aware that the Company has made any material misrepresentations or omissions
either to 350 Group or to any potential investors during the Engagement, then
350 Group shall have the right to immediately terminate this Agreement.
Similarly, in the event that the Company becomes aware of willful misconduct or
gross negligence on the part of 350 Group in the performance of its duties
hereunder, the Company has the right to immediately terminate this Agreement.
POST-TERMINATION NOTICE
If at any time prior to 18 months after the termination or expiration of this
Agreement a Financing Transaction is consummated with a party introduced by 350
Group during the period of this Engagement, the Company will promptly provide
350 Group with written notice of the Transaction and promptly pay to 350 Group
or make mutually satisfactory arrangements to pay to 350 Group all Additional
Compensation due to 350 Group.
6. NON-EXCLUSIVITY OF 350 GROUP SERVICES
It is understood and acknowledged by the Company that 350 Group presently
has, and anticipates having throughout the Engagement Term, other clients for
which it performs the same or similar services to those to be performed in
accordance herewith, and that 350 Group shall be under no obligation under this
Engagement to restrict its ability in any way to perform services for any other
clients. 350 Group shall use commercially reasonable efforts to fulfill its
obligations under this Agreement.
7. ROLE OF FINDER
In connection with any Financing Transactions hereunder, the Company
acknowledges that 350 Group is not a registered broker-dealer under Section 15A
of the U.S. Securities Exchange Act of 1934, or any similar state law, and that
350 Group cannot, and shall not be required hereunder to, engage in the offer or
sale of securities for or on behalf of the Company. While 350 Group has
preexisting relationships and contacts with various investors, registered
broker-dealers and investment funds, 350 Group's participation in any actual or
proposed offer or sale of Company securities shall be limited to that of an
advisor to the Company and, if applicable, a "finder" of investors, broker-
dealers and/or funds. The Company acknowledges and agrees that the solicitation
and consummation of any purchases of the Company's securities shall be handled
by the Company or one or more NASD member firms engaged by the Company for such
purposes.
8. REFERRAL FEES
Any referral fees that are agreed to by 350 Group and are payable in
connection with any Financing Transactions shall be the exclusive responsibility
of, and shall be paid by 350 Group.
9. COOPERATION BY COMPANY
In order to enable 350 Group to provide the services requested, the Company
agrees to provide to 350 Group, among other things, all information reasonably
requested or required by 350 Group including without limitation information
concerning historical and projected financial results with respect to the
Company and its subsidiaries and possible and known litigation, environmental
and/or other contingent liabilities. The Company also agrees to make available
to 350 Group such representatives of the Company, including, among others,
directors, officers, employees, outside counsel and independent certified public
accountants, as 350 Group may reasonably request to answer questions and to
provide documentary and other information.
10. LIMITATION ON USE OF CERTAIN INFORMATION
The Company acknowledges that all services and advice (written or oral)
provided by 350 Group to the Company in connection with the Engagement are
intended solely for the benefit and use of the Company in considering the
subject matter to which they relate, and the Company agrees that no person or
entity (including shareholders of the company) other than the Company shall be
entitled or advised to make use of or rely upon the advice of 350 Group provided
pursuant hereto, and no such opinion or advice shall (i) be used for any other
purpose or reproduced, disseminated, quoted or referred to at any time, in any
manner or for any purpose, or (ii) filed with, included in or referred to in
whole or in part in any registration statement, proxy statement or any other
document, in either case without 350 Group's prior written consent or as
required by law or stock exchange rules. In any event, neither the Company nor
any other parties may use the 350 Group name in any public references, press
releases or public filings in connection with the Company without 350 Group's
prior written consent or as required by law or stock exchange rules.
11. RELIANCE BY 350 GROUP ON ACCURACY OF INFORMATION
The Company recognizes and acknowledges that, in advising the Company and
in fulfilling the Engagement hereunder, 350 Group will use and rely on data,
material and other information furnished to 350 Group by the Company. The
Company agrees that 350 Group may do so without independently verifying the
accuracy or completeness of such data, material or other information. The
Company represents and warrants that any such data, material or information
shall be true and accurate and shall not, as of the time communicated, contain
any untrue statement of a material fact or omit in all material respects to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Further, the Company agrees to promptly inform 350 Group
if it becomes aware that any information previously provided to 350 Group
becomes incorrect or would be misleading in any material respect promptly upon
becoming aware that such previous information provided to 350 Group is
misleading or would no longer be correct.
12. NON-DISCLOSURE AGREEMENT
13.1 Definition of "Confidential Information"
Confidential Information means proprietary information relating to the
Company which is not generally known and available to the public, and
includes (without limitation): Trade Secrets (as defined below) and
information relating to trade methods; methods of doing business; research
and development; invention; the identity, prior requirements, and present or
future particular needs, of clients of the Company; the identity of and
background information about purchasing, contracting, recruitment, and
management personnel of clients of the Company; all orders, bids, and
quotations, with or related to past, present and prospective clients of the
Company and all clients and prospect files, lists, records, studies, surveys,
reports, correspondence and similar materials related to the foregoing; the
identity, particular skills, work history and evaluations of personnel,
including personnel listed in any database of the Company, especially their
most recent work history and skills; profit margins, and pricing policies and
practices, in general and as to particular clients; sales and marketing
techniques, history, data forecasts, and material, in general and as to
particular clients; development plans; and personnel training techniques and
materials; and information in respect of which the Company is bound by an
obligation of confidence to a third party.
13.2 Definition of "Trade Secrets"
Trade secrets shall mean all information, whether or not Confidential
Information, included within the definition of "Trade Secrets" under the law
of any state in which 350 Group provides services for the Company or, in the
absence of any such definition, as defined in the Uniform Trade Secrets Act.
13.3 Acknowledgement of Company-Owned Information
350 Group acknowledges that all Confidential Information is owned by and
shall continue to be owned by the Company.
13.4 Return of Property
Upon the termination of this Agreement, regardless of why the Agreement
terminates, upon written request by the Company, 350 Group shall return to
the Company all Confidential Information indicated by the Company in its
notice letter as well as any other Confidential Information that 350 Group
is aware that it has, in whatever form it exists, including all copies
thereof. The Company agrees that so long as 350 Group has made a good faith
effort to return all such Confidential Information, 350 Group shall be
deemed to have complied with the provisions of this paragraph 13.4. The
Company may at anytime call to 350 Group's attention that certain additional
Confidential Information needs to be returned and 350 Group shall promptly
search for such additional Confidential Information and return it to the
Company. The Company agrees that 350 Group may delete any information that
is proprietary to 350 Group that may be contained within the Company's
Confidential Information.
13.5 Non-Disclosure.
350 Group agrees that, during the term of the Engagement and for a
period of three (3) years after the expiration or Termination of this
Agreement, regardless of the reason for such Termination, 350 Group will not
reveal or disclose any such Confidential Information to any third party
unless the Company has consented, or unless required by law, a court or
agency of the government; provided, however, that 350 Group is authorized to
disclose such Confidential Information in connection with a potential
Transaction in a manner consistent with customary industry practices in
connection with the provision of services under this Agreement. Neither the
previous paragraph nor any restriction, non- disclosure or use limitation or
other obligation contained in this Agreement shall apply to any information,
data or item of any kind which is: (i) in the public domain, through no
action of 350 Group; (ii) already known by 350 Group at the time it is
provided to 350 Group by the Company; (iii) disclosed to 350 Group by any
person or entity not known by 350 Group to be under an obligation of
confidentiality to Company; or (iv) independently developed or derived by 350
Group.
13. INDEMNIFICATION In consideration of 350 Group signing this Agreement and
performing hereunder, the Company agrees to indemnify and hold harmless 350
Group and each of its directors, officers, agents, employees and controlling
persons (within the meaning of the Securities Act of 1933, as amended) to
the extent and as provided in Exhibit C attached hereto and incorporated
herein by reference. The provisions of this Section 14 and Exhibit C shall
survive any expiration or termination of this Agreement and shall be binding
upon any successors or assigns of the Company.
14. NATURE OF ENGAGEMENT; LIMITATION ON AUTHORITY TO BIND
350 Group shall perform its services hereunder as an independent contractor
and not as an employee of the Company or an affiliate thereof. It is expressly
understood and agreed by the parties hereto that 350 Group shall have no
authority to act for, represent or bind the Company or any affiliate thereof in
any manner, except as may be agreed expressly by the Company in writing from
time to time. In addition, the terms and conditions of any Transaction that
gives rise to a Compensable Event shall be subject to acceptance by the Company
in its sole and absolute discretion.
15. ASSIGNMENT OF COMPENSATION
Without the prior written consent of the other party, neither party may
assign this Agreement or any of its rights or obligations under this Agreement
to any third party, whether by operation of law, merger or otherwise. The
Company agrees that 350 Group, in its sole discretion, shall have the absolute
right to assign in whole or in part any compensation due hereunder to any of its
affiliates (within the meaning of the Securities Act of 1933, as amended),
officers, directors, employees, subcontractors or member(s) by notifying the
Company in writing of such assignment of compensation prior to such compensation
becoming due.
16. MISCELLANEOUS
17.1 Entire Agreement
This Agreement constitutes the entire agreement and understanding of the
parties hereto, and supersedes any and all previous agreements and
understandings, whether oral or written, between the parties with respect to
the matters set forth herein.
17.2 Communication
Any notice or communication permitted or required hereunder shall be in
writing and shall be deemed sufficiently given if hand-delivered or sent (i)
postage prepaid by reputable next business day delivery service or certified
mail, return receipt requested, or (ii) by facsimile (with electronic
confirmation of delivery received) to the respective parties as set forth
below, or to such other address as either party may notify the other of in
writing:
If to the Company, to: President & CEO
DataMeg Corporation
0 Xxxx Xxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. XxXxxxx
If to 350 Group, to: 350 Group, LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: Reznor X. Xxx
17.3 Binding Agreement
This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors, legal representatives and
assigns.
17.4 Representations
Each of 350 Group and the Company represents that it has the power to
enter into this Agreement and to carry out its obligations hereunder. This
Agreement constitutes the valid and binding obligation of the Company and 350
Group and is enforceable in accordance with its terms. Each of 350 Group and
the Company further represents that this Agreement does not conflict with or
breach any agreement to which it is subject or by which it is bound.
Furthermore, the Company represents that the shares outstanding as of April 1,
2005 is 292,429,607 shares.
17.5 Counterparts
This Agreement may be executed in any number of counterparts, each of
which together shall constitute one and the same original document.
17.6 Amendments
No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
17.7 Arbitration
All claims arising out of the interpretation, application or enforcement
of this Agreement including, without limitation, any breach hereof, shall be
settled by final and binding arbitration in Naples, Florida in accordance with
the commercial rules then prevailing of the American Arbitration Association by
a panel of one (1) arbitrator appointed by the American Arbitration Association.
The decision of the arbitrator shall be binding on 350 Group and the Company and
may be entered and enforced in any court of competent jurisdiction by either
party. The arbitration shall be pursued and brought to conclusion as rapidly as
is possible. In no event shall any claims decided in the favor of the Company
exceed the amount of any compensation paid to 350 Group. Each of 350 Group and
the Company waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) related to or
arising out of the Engagement of 350 Group pursuant to, or the performance by
350 Group of, the services contemplated by this Agreement. The Company may
enforce Section 13 of this Agreement (Non-Disclosure) in any court of competent
jurisdiction, and 350 Group consents to jurisdiction of any such court.
17.8 Governing Law
This Agreement shall be governed by, and construed in accordance with the
provisions of the law of the State of Florida, without reference to provisions
that refer a matter to the law of any other jurisdiction.
17.9 Breach
If either party knowingly or intentionally breaches this Agreement or
proposes to breach this Agreement by repudiating its obligation to perform in
any material respect prior to the time for performance, as determined by an
arbitrator in accordance with paragraph 17.7, then such party shall pay the
other all costs and expenses, including attorney's fees and arbitration fees,
reasonably incurred by the damaged party in enforcing this Agreement.
17.10 No Presumption and Opportunity to Review
The fact that this Agreement was drafted by one party shall create no
presumptions and specifically shall not cause this Agreement or any part hereof
to be construed against any party as the drafter. The Company hereby represents
that it has had a full and fair opportunity to have this Agreement, and all
related documents referred to herein, reviewed by counsel of its own choice.
17.11 Notification
During the Term of this Engagement and all extensions thereto, the
Company agrees that it will not directly or indirectly initiate any discussions
or other contacts or solicit any inquiries or indications concerning a Financing
Transaction except through 350 Group. The Company further agrees that it will
promptly inform 350 Group, or cause 350 Group to be informed, of the identity of
any third party that subsequently makes any such inquiry or whose interest in a
possible Financing Transaction becomes known to the Company after the date of
this agreement.
17.12 Brokers
The Company represents to 350 Group, that all brokers, representatives,
or other persons that have an interest in any compensation due from the Company
for any Transaction (as contemplated hereby) as of the date of this Agreement is
fully disclosed in Exhibit D. The Company further agrees to immediately notify
350 Group in the event that it enters into any agreement in the future that may
give rise to any compensation due to a third party for a transaction that would
infringe on 350 Group's rights under this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have
caused this Agreement to be duly executed on their behalf, as of the day and
year first hereinabove set forth.
350 GROUP, LLC
/s/ Reznor X. Xxx
--------------------
Reznor X. Xxx
Managing Director
350 Group, LLC
DATAMEG CORP
/s/ Xxxx X. XxXxxxx
----------------------
Xx. Xxxx X. XxXxxxx
Chairman of the Board of Directors
DataMeg Corp
EXHIBIT A
CONSULTATIVE AND RELATED SERVICES
350 Group will provide to the Company a range of consultative and related
services addressing as a minimum the following topics:
(1) Board of Directors. Assist DataMeg in the formation of an appropriate
Board of Directors for DataMeg/NECI;
(2) Business Planning. Assist DataMeg Management in preparation of a full
business plan including a 5-year planning horizon; the financial plan and cash
flow plans will include operating budgets, revenue and profit model and related
revenue forecast;
(3) Financing. Assist in identifying the capital needs of the Company and
sources of financing capital by means of private placement of debt and/or
equity, to properly capitalize the company's general working capital fund and to
support the company's Board-approved business development and operations plans
at a business-appropriate level; provide assistance in the preparation of the
company's private offering memoranda and subscription documents (in
collaboration with DataMeg Chairman and the company's securities counsel);
(4) Use of Financing Proceeds. Assist DataMeg management to establish a
firm "use of proceeds" for each of its financings to ensure investor confidence
in the company's direction and fiduciary responsibilities;
(5) Near-Term Working Capital. Assist DataMeg management in obtaining
additional working capital to support operations focused on trials with Time
Warner Cable, Sprint and other of the leading cable utility companies in USA and
abroad;
(6) Financial and Cash Flow Planning and Reporting. Assist DataMeg
management in all aspects of cash flow planning and management with routine
reporting and accountability to its DataMeg parent;
(7) Equipment Lease Finance. Assist DataMeg management in obtaining
equipment lease financing as a sales tool in connection with DataMeg equipment
offerings to its prospective network equipment customers;
(8) Distribution Channel Partnerships. Assist DataMeg Management in
developing sustainable "distribution channel relationships" that include 350
Group's executive and board-level relationships with enterprise network
customers among the leading industrial network owners, and state and federal
government network operators;
(9) Executive and Management Team Development. Assist DataMeg management in
building its executive and management team;
(10) Forecasting Revenue Visibility. Assist DataMeg management to forecast
(with sound quantitative modeling) its financial performance, enable responsible
and credible industry analyst and market maker coverage of DataMeg and DataMeg
business and securities;
(11) Technical Advisory Board. Assist DataMeg Management in recruiting a
world-class Technical Advisory Board with a program to build professional and
peer credibility for the company's technology and product leadership; and
(12) Corporate Communications and Website. Coordinate, in collaboration with
DataMeg Board all press announcements and corporate communications and
disclosure strategies for building stakeholder and investor credibility in the
company's public disclosures, including content provided via the company's
website; this may include appointment of a high-quality financial PR firm.
EXHIBIT B
PERFORMANCE COMPENSATION
B.1 Engagement Retainer
350 Group waives it normal engagement fee and elects to receive its
compensation based upon performance criteria for the services rendered
under this Engagement.
B.2 Performance Compensation
350 Group shall be compensated for it performance ("Performance
Compensation") in connection with certain transactions, Company
milestones and other events ("Compensable Events") throughout the
Engagement and thereafter, the amount of which Performance Compensation
shall be determined in each case with reference to the following
corresponding sub-sections:
B.2.1 Financing Transactions
For purposes of Financing Transactions involving a Financing Source
"introduced" directly or indirectly to the Company by 350 Group, and
whether occurring during the Term of Engagement or during a period
ending twelve (12) months following Termination, Performance
Compensation shall be payable to 350 Group upon the closing thereof in
accordance with the following schedule for the type of security
indicated, where "Consideration" shall mean (i) the total amount of
gross proceeds received by the Company without condition as part of any
such Financing Transaction, and (ii) any common stock or other
securities of any company (including without limitation any warrants,
options and/or convertible securities) issued or otherwise transferred
to the Company as a direct or indirect part of such Financing
Transaction. For the purposes of this section, the term "introduced"
shall be defined as either (i) an introduction by 350 Group whereby a
meeting took place, either in person or telephonically and that meeting
included an officer of the company either in person or telephonically or
(ii) whereby 350 Group delivered, on the Company's behalf, information
in writing or by electronic mail with respect to a Financing Transaction
to any Financing Source. In addition, any Financing Sources that are
introduced to the Company by a party "introduced" by 350 Group shall be
deemed to have been "introduced" by 350 Group.
(A) Placement of Equity and Equity-Linked Securities.
For the purposes of this section, a security shall be deemed to be an
equity-linked security if it is convertible in whole or in part into any
form of equity security that the Company currently has or contemplates
offering. 350 Group shall be paid additional compensation in the form
of US funds, an amount equal to Five Percent (5%) of the Consideration.
If Performance Compensation is taken in the form of Company stock, the
Company additionally agrees to pay registration fees (except for selling
stockholder commissions) with regard to issuance of such stock to 350
Group.
(B) Placement of Debt Securities
350 Group shall be paid Performance Compensation in the form of US funds
an amount equal to 5% of the Consideration obtained from placement of
the Company's debt securities.
B.2.2 Performance Compensation
Upon the Effective Date of this Agreement, 350 Group will be granted a
Non-Qualified Stock Option exercisable into 94,000,000 shares of
DataMeg's common stock, par value $0.0001/share ("The Performance
Pool"). Such option will be issued with a strike price of $0.10/share.
The security will vest in favor of 350 Group according to the vesting
schedule below, during the term of this Agreement and extending
thereafter for a period of eighteen (18) months. The Non-Qualified
Stock Options will be free of restrictions and the underlying common
stock will be freely tradable in accordance with securities law or stock
exchange rules. The performance milestones and vesting schedule are as
follows:
Company Milestone Stock Vesting Schedule
-------------------------------------------------------|-------------------------------------
0.Xxxxxxx Raise of each $1MM introduced by 350 Group | 5% of Performance Pool for each
| $1MM raised, up to a maximum of
| 25% of Performance Pool
-------------------------------------------------------|-------------------------------------
2.North Electric Signs Long-Term Sales or Services |
Agreement with Major VoIP services provider |
(such as Sprint, Cox or similar) | 10% of Performance Pool
-------------------------------------------------------|-------------------------------------
3.North Electric Signs Long-Term Sales or Services |
Agreement with a major Federal Government IP |
Telephony Network Systems Provider (such as Nortel) | 10% of Performance Pool
-------------------------------------------------------|-------------------------------------
4.North Electric Signs Long-Term Sales or Services |
Agreement with a Fortune 500 IP Telephony Network |
Systems Client | 10% of Performance Pool
-------------------------------------------------------|-------------------------------------
5.Implementation at North Electric of Business Systems |
that produce routine financial reporting to DataMeg |
Chairman and Board | 20% of Performance Pool
-------------------------------------------------------|--------------------------------------
6.North Electric books aggregate revenue of $10 MM, |
with no material contingencies | Remaining balance of Performance Pool
-------------------------------------------------------|--------------------------------------
B.3 Testimony & Related Matters
If any employee or affiliate of 350 Group is required to give any
testimony or otherwise provide information in any proceeding of any
action (excluding any proceeding that involves a dispute directly
between 350 Group and the Company) in which the services rendered by 350
Group pursuant to this Agreement are the subject of examination, the
Company agrees, as part of its obligations hereunder, to pay to 350
Group $2,500 per employee or affiliate for each day or portion of any
day that any of its employees or affiliates are required make themselves
available to give such testimony or provide such information or spend
time in preparation to do any of the foregoing plus reasonable out-of-
pocket expenses including any reasonable airfare.
B.4 Warrants.
In the event that warrants become issuable to 350 Group in connection
with any Compensable Event hereunder, the parties agree that they will
execute a separate warrant agreement ("Warrant Agreement") for each such
Compensable Event within 10 business days of the consummation of such
Compensable Event. Each Warrant Agreement shall be for a term of 5
years from the date of issue and shall contain customary terms and
provisions for such an agreement, including, but not limited to,
provisions for (a) unlimited "piggy-back" registration rights, (b) a
cashless exercise feature, and (c) an exercise price equal to the
closing or last trade price of the company's common stock on the
issuance date.
B.5 Securities Law Matters.
In accordance with Federal securities law, none of the Company, 350
Group, nor any of the agents of either party shall engage in general
solicitation or general advertising as described in Rule 502 under the
Securities Act of 1933, as amended. Similarly, neither 350 Group nor any
of its agents may offer any securities of the Company to any individuals
or entities who or that are not accredited investors, as defined in Rule
501 under the Securities Act of 1933, as amended.
EXHIBIT C
INDEMNIFICATION
Pursuant to the foregoing Agreement dated April 28, 2005 (the "Agreement"),
DataMeg Corp, a Delaware corporation, and its affiliates (together with any new
companies that may be established to facilitate financing, merger or acquisition
of
DataMeg Corp hereafter referred to as the "Company") agrees to indemnify and
hold harmless 350 Group, LLC. ("350 Group"), together with its respective
officers, directors, shareholders, employees and agents, and each person, if
any, who controls 350 Group and any of its affiliates within the meaning of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, (all of the foregoing are referred to collectively as "Indemnified
Parties" and individually as an "Indemnified Party"), from any and all losses,
suits, actions, judgments, penalties, fines, costs, damages, liabilities or
claims of any kind or nature, whether joint or several, (including, without
limitation, any reasonable legal or any other expenses as they are incurred by
an Indemnified Party in connection with the preparation for or defense of any
action, claim or proceeding, whether or not resulting in any liability) (all of
the foregoing being collectively defined as the "Indemnified Claims") to which
such Indemnified Party may become subject or liable or which may be incurred by
or assessed against any Indemnified Party under any statute, common law,
contract or otherwise, relating to or arising out of any of: (a) any actions or
omissions of the Company constituting willful misconduct or negligence or anyone
acting on the Company's behalf, including its employees, officers, advisors,
directors and agents; (b) breaches of this Agreement or the Company's obligation
pursuant to the Agreement; (c) any securities, tax, corporate, or other filings
of the Company; or (d) any Transactions referred to in the Agreement or any
transactions arising out of the Transactions contemplated by the Agreement;
provided, however, that the Company shall not be liable to an Indemnified Party
in any such case solely to the extent that any such Indemnified Claim is found,
in a final judgment by a court of competent jurisdiction, to have resulted as a
direct and proximate cause from said Indemnified Party's willful misconduct or
negligence in the performance of their duties on behalf of the Company or any
violation of law or stock exchange rule by any Indemnified Party. No
Indemnified Party shall have any liability to the Company or any other person in
connection with the services rendered pursuant to this Agreement except for any
liability for losses, claims, damages or liabilities finally judicially
determined to have resulted solely and exclusively from actions taken or omitted
to be taken as a direct result of such Indemnified Party's negligence or willful
misconduct. Promptly after receipt by an Indemnified Party of notice of the
occurrence of an Indemnified Claim, or any claim or the commencement of any
action or proceeding in respect of which indemnity may be sought against the
Company, such Indemnified Party will notify the Company in writing of the
commencement thereof or of such Indemnified Claim, and the Company shall
immediately assume the full defense thereof (including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of the fees and
expenses of such counsel). Failure of an Indemnified Party to give prompt
notification to the Company of an Indemnified Claim will not in any way affect
the Company's obligation to indemnify 350 Group except to the extent that such
delay is materially prejudicial to the Company. Notwithstanding the preceding
sentences, the Indemnified Party will be entitled to choose and employ its own
counsel in such circumstance if the Indemnified Party is advised in a written
opinion of counsel that a conflict of interest exists which makes representation
by counsel chosen by the Company not advisable. In such event, the reasonable
fees and disbursements of such separate counsel will be paid by the Company.
EXHIBIT D
THIRD-PARTY COMPENSATION AGREEMENTS
Description of all compensation arrangements with third-party brokers,
representatives or persons with respect to financial transaction (as
contemplated in this Agreement) as of the date of this Agreement:
None
