EXHIBIT 10.14
CONSULTING AGREEMENT
This Agreement is made and entered into this 15th day of December, 1998,
between Mobile PET Systems, Inc. (the "Company") and Northwest Capital
Partners, L.L.C. (the "Consultant"), and sets forth the terms and conditions
upon which the Consultant will act as financial advisor to the Company in
connection with the completion of the financing described in Exhibit "A"
attached hereto (the "Financing").
In consideration for the mutual promises and covenants contained herein, and
for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. PURPOSE. The Company hereby engages the Consultant during the term hereof
to arrange financing, as a finder, for the Company upon terms and conditions
as set forth herein and in accordance with the requirements set forth in
Exhibit "A" (the "Financing"). Consultant shall also have a right of first
refusal to consult with the Company regarding appropriate financings
subsequent to the Financings set forth in Exhibit "A" for a period of three
years following the term of this Agreement.
2. TERM. The term of this Agreement shall be for a period of 36 months,
provided that the first Interim Financing shall be completed no later than
January 31, 1999. An offering pursuant to Rule 504 or other applicable Rule
adopted pursuant to the Securities Act of 1933, as amended (the "Act"), shall
be completed within 30 days of the Company's approval and, following the
quotation of the Company's common stock on the NASD OTC Bulletin Board and a
third round of financing, shall be completed within the 90 day period
following the date the Company's common stock is quoted on the NASD OTC
Bulletin Board.
3. DUTIES OF THE CONSULTANT. During the term hereof, Consultant shall provide
the Company with the benefit of its best judgment and efforts to complete the
Financing on a reasonable business basis in accordance with the requirements
set forth in Exhibit "A." It shall be Consultant's duty to suggest and
evaluate from the standpoint of financial soundness, the Company's business
plans and programs, corporate financial structures, and corporate
organization, and any other financial matters involving the Company. In
connection with the financing contemplated by this Agreement, Consultant
agrees that it will advise and work with the Company to complete the
Financing successfully in accordance with Rule 504 or other applicable Rule
under the Act and the related and applicable Blue Sky laws of the states in
which the financing is completed. Consultant shall advise the Company of each
proposed broker or other financing or referral source identified by
Consultant prior to authorizing any participation in the Financing.
Consultant shall use its best efforts, after receiving information from
Company sufficient to comply with the informational requirements of Rule
15c2-11 under the Securities Exchange Act of 1934 (the "1934 Act"), to
arrange for the shares of common stock of the Company to
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be quoted on the NASD OTC Bulletin Board either by direct application and
approval through the NASD or by reverse merger. The Company and the
Consultant shall review the potential filing of a Form 10 (1934 Act form)
with the U.S. Securities and Exchange Commission following the Second Stage
Financing. Company agrees that it will accept Financing amounts at each
closing contemplated by Exhibit "A" which are in excess of the amounts in
Exhibit "A" if Consultant is able to raise such additional amounts in
accordance with the appropriate disclosure and the securities registration
exemption provisions of the Act and the relevant Blue Sky laws. Consultant's
duties shall also include, but not be limited to:
3.1 Assist the Company's management in the development and execution of
a strategic short-term, intermediate term and long-term financial
plan;
3.2 Assist the Company in the negotiation of the terms of the
Financings;
3.3 Assist the management of the Company in connection with inquiries
made by or on behalf of any proposed brokers and investors;
3.4 Assist the management of the Company in the preparation of
presentation materials for the purpose of pursuing the Financing;
3.5 Using its best efforts, on terms acceptable to the Company, to
arrange the Financings as described in Exhibit "A" attached hereto.
3.6 If the Company and the Consultant determine that a direct
application to the NASD is not in the best interest of the
Company and determine that the Company go public by way of a
reverse merger with an existing publicly traded company the
Consultant will be responsible for the location and acquisition
of such public company including all costs associated with its
acquisition.
4. CONSULTANT'S COMPENSATION.
4.1 The Company shall pay Consultant a fee of $5,000 for each month or
partial month this Agreement has been in effect, providing that
such payment shall be paid, as accrued, at the closing of the
Interim Financing and then continuing through the closing of the
Second and Third Stage Financings, as described in Exhibit "A," by
the Consultant. Upon the closing of the Third Stage of Financing,
the fee of $5,000 per month will be extended for an additional 36
months, for duties to be mutually agreed upon by the parties.
4.2 The Company agrees that, at the closing of the first Interim
Financing, as described in Exhibit "A," by the Consultant or at
the time the Company goes public, the Company will issue to the
Consultant
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1,200,000 shares of common stock of the Company at value of $0.01
per share. The Consultant's shares shall be held in escrow by the
Company's lawyer pursuant to an escrow agreement that releases the
Consultant's shares to the Consultant based upon the following terms
and conditions:
Upon the completion of the Interim Financing, as described in
Exhibit "A", the Consultant shall have earned 600,000 shares of the
Company and such shares will be delivered to the Consultant. Upon
the completion of the Second Stage Financing, as described in
Exhibit "A", the Consultant shall have earned an additional 600,000
shares of the Company and such shares will be delivered to the
Consultant. Upon the Company's receipt of the aggregate amount of
$1,000,000 through any combination of the Interim, Second or Third
Stage financings as described in Exhibit "A", the Consultant shall
have earned all 1,200,000 shares of the Company and such shares will
be delivered to the Consultant. In the event that the Company
terminates this agreement the Company retains the right to purchase
all of the Consultant's shares that remain in escrow for $0.01 per
share.
4.3 The Company agrees to issue the Consultant an additional 1,000,000
shares at a value of $0.01 per share if the Company's market
capitalization achieves the value of $100,000,000.00 or more. These
shares will be issued by the company as restricted shares at a value
of $0.01 per share and will be granted "piggy-back" rights so that
the shares will be registered upon the Company's first registration
after the share's issuance.
4.4 The Company agrees that it shall reimburse Consultant for
reasonable, out-of-pocket expenses incurred by Consultant in
performing the services provided pursuant to this Agreement,
provided that such out-of-pocket expense reimbursement shall not
exceed $3,000 in any calendar month or partial month, and provided
that any expenses in excess of $500 in any calendar month shall
require advance approval by the Company. Such reimbursement shall be
paid upon the within 15 days of the Company's receipt of the
Consultant's invoice. Such reimbursement may be claimed for any
month commencing with the signing of this Agreement and monthly
thereafter to the date of each closing, payable within 15 days of
receipt.
4.5 If the Consultant is unsuccessful in introducing investors to the
Company (either directly or through a broker) who would be willing
to fund the Financings contemplated in Exhibit "A" within the time
periods set forth, this Agreement may be terminated at the Company's
discretion, unless otherwise extended by mutual consent. Such consent
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will be implied should the Company be in or continue negotiation
with investors which should reasonably result in successful
Financing or should the Company accept funds from one of the sources
introduced to the Company by the Consultant during this period.
Following termination, however, Consultant will be entitled to the
consideration above as to those stages of the Financing completed
and in the event that after termination a financing of any kind or
amount is consummated with any party introduced to the Company by
the Consultant during a period of twelve months after termination of
this Agreement.
5. INDEMNIFICATION.
5.1 The Company agrees to indemnify the Consultant, its agents and
employees against any and all claims, lawsuits, and litigation
arising from representations of the Company made to Consultant or
prospective investors concerning its business plan and financial
condition. Such indemnification shall include reasonable attorney's
fees to defend any such actions or claims.
5.2 The Consultant agrees to indemnify the Company, its agents and
employees against any and all claims, lawsuits, and litigation
arising from representations of the Consultant made to prospective
investors concerning the Company except for those representations
constituting information provided by the Company. Such
indemnification shall include reasonable attorney's fees to defend
any such actions or claims.
5.3 Promptly after receipt by an indemnified party of notice of any
claim or commencement of any action in respect of which indemnity
may be sought, the indemnified party will notify the indemnifying
party in writing of the receipt or commencement thereof and the
indemnifying party shall have the right to assume the defense of any
such claim or action (including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of fees and
expenses of such counsel), after which the indemnifying party shall
not be liable to the indemnified party for any legal fees incurred
by the indemnified party in connection with the defense of such
claim or action. Notwithstanding the prior sentence, the indemnified
party shall have the right to control its defense if, in the opinion
of it counsel, the indemnified party's defense is unique or separate
to it, as the case may be, as opposed to a defense pertaining to the
indemnifying party. In such event, the indemnified party shall have
the right to retain counsel reasonably satisfactory to the
indemnifying party at the indemnifying party's expense, to represent
it in any claim or action in respect of which indemnity may be
sought and agrees to cooperate with the indemnifying party and the
indemnifying party's counsel on the defense of any such
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claim of action, it being understood, however, that the indemnifying
party shall not, in connection with any such claim or action or
separate but substantially similar or related claim or action in the
same jurisdiction arising out of the same general circumstances, be
liable for the reasonable fees and expenses of more than one
separate firm of attorneys, unless the defense of one indemnified
party is unique or separate from that of another indemnified party
subject to the same claim or action. No party shall be liable for
any settlement of any claim or action effected without its written
consent.
6. REPRESENTATION AND WARRANTIES. Company represents and warrants as follows:
6.1 The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Nevada
and is qualified as a foreign corporation where required.
6.2 The shares of common stock of the Company which will be delivered to
the investors and Consultant will be duly authorized and validly
issued and fully paid and nonassessable.
7. ADDITIONS PRECEDENT. Consultant's duties to use its best efforts to
complete the Financing contemplated herein shall be subject to:
7.1 The Company will not change or modify the Company's capital
structure without the prior written consent of Consultant, which
consent shall not be unreasonably withheld.
7.2 The Company will submit quarterly budgets to Consultant during the
period of the Financing and for one year after successful completion
of the Financing.
7.3 The Company will provide all pertinent information in connection
with the Company's assets, including, but not limited to, all
tangible and intangible assets, and all copyright and trademark
information.
7.4 The Company shall have received executed employment agreements from
each of its officers and directors and other key individuals in a
form reasonably appropriate in accordance with industry standards.
7.5 The Company will provide Consultant with all information and
verifications thereof which Consultant or its legal counsel may
reasonably request from the Company in a manner and form
satisfactory to Consultant and its legal counsel.
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7.6 Receipt by Consultant of suitable financial statements of the
Company that are in form and substance satisfactory to Consultant,
in its sole discretion. The Company shall provide financial
statements consisting of a balance sheet and a related statement of
income for the period then ended, which fairly present the financial
condition of each as of their respective dates and for the periods
involved, and such statements shall be prepared in accordance with
generally accepted accounting principles consistently applied or
upon such other basis as the parties shall mutually agree and for
the periods mutually agreed upon among the parties.
7.7 All existing shares of the Company have or will be issued in
accordance to Rule 4(2) of the 1933 Act and consequently, such
securities will be "Restricted Securities" as such term is defined
in Rule 144 as promulgated under the 1933 Act and thus will be
subject to certain resale limitations as contained in Rule 144 and
the certificates shall bear the following restrictive legend
limiting their resale under Rule 144 of the Act.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
PURSUANT TO A TRANSACTION EFFECTED IN RELIANCE UPON SECTION 4(2) OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN THE
SUBJECT OF A REGISTRATION STATEMENT UNDER THE ACT OR ANY STATE
SECURITIES ACT. THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR APPLICABLE EXEMPTION
THEREFROM UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES ACT."
8. CONDITIONS SUBSEQUENT.
8.1 For a period of three years from the date of closing of a Financing
arranged by Consultant pursuant to this Agreement, the Company will
provide Consultant, at its expense, following a reasonable request
by Consultant for the purpose of reviewing and/or protecting the
Company's shareholder's interests, with copies of stock transfer
sheets from the Company's Transfer Agent, as well as weekly DTC
Reports from the Depository Trust Company to the extent such reports
can be made available to a party that is not an affiliate of the
Company, and will provide Consultant with all publicly available
financial reports and publicly available reports of material
developments regarding the Company and its compliance with laws and
regulations applicable thereto.
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8.2 For a period of three years after the date that the Company's shares of
common stock commence trading on the NASD OTC Bulletin Board, the
Company's executive officers and directors who own at least five percent
(5%) of the Company's common stock ("Principal Stockholders") and the
Company shall provide the Company with the right of first refusal with
respect to any offering (public or private) of the Company's securities by
either the Company or the Principal Stockholders involving more than
1000 shares of stock.
For a period of three years after the date that the Company's shares of
common stock commence trading on the NASD OTC Bulletin Board, the
Company's executive officers and directors who own at least five percent
(5%) of the Company's common stock ("Principal Stockholders") and the
Company shall provide the Consultant with the second right of first
refusal with respect to any offering (public or private) of the
Company's securities by either the Company or the Principal Stockholders
involving more than 1000 shares of stock.
For a period of three years after the date that the Company's shares of
common stock commence trading on the NASD OTC Bulletin Board, the
Company's executive officers and directors who own at least five percent
(5%) of the Company's common stock ("Principal Stockholders") and the
Company shall provide the other Principal Stockholders of the Company
with the third right of first refusal with respect to any offering
(public or private) of the Company's securities by either the Company or
the Principal Stockholders involving more than 1000 shares of stock.
8.3 The Company's officers and directors will use their best efforts to
cause each Principal Shareholder and each other holder of 5% or more of
the Company's common stock to enter into an agreement with Consultant
pursuant to the terms of which each such person shall agree not to sell
any shares owned by such person on the NASD OTC Bulletin Board, for a
period of twelve months after the date that the Company's shares of
common stock commence trading on the NASD OTC Bulletin Board, without
Consultant's prior written consent, which consent will not be
unreasonably withheld. Provided that each such person may sell up to
1,000 shares every three months after the first 180 days has passed
after the date that the Company's shares of common stock commence
trading on the NASD OTC Bulletin Board.
8.4 Consultant shall be entitled for a period of five years to nominate a
director for the Company's board of directors which the Company's
existing directors will support. Such director shall be paid the same
salary as other directors (for director's duties performed) and shall
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participate in all bonus programs granted to the Company's board of
directors.
9. TERMINATION OF RELATIONSHIP. This Agreement shall terminate upon the
happening of any one of the following events:
9.1 Either party may terminate this Agreement upon ten days written
notice to the other that a material breach by the other of the terms
or covenants of this Agreement shall have occurred and such breach
shall not have been cured within ten days after such notice.
9.2 Either party shall have the right (but not the obligation) to
terminate this Agreement upon written notice to the other party if
such terminating party reasonably determines that the other party or
any of its directors, officers or controlling shareholders has
engaged in any unlawful, wrongful, or fraudulent act against the
Company or its shareholders.
9.3 Either party shall have the right (but not the obligation) to
terminate this Agreement upon written notice to the other party if
such terminating party shall determine that any material fact
concerning the other party represented to them during the course of
performing their undertakings under this Agreement are misstated or
untrue or that the other party has intentionally failed to provide
the terminating party with material facts concerning the other party.
9.4 Either party may terminate this Agreement at any time: (i) in the
event of war; (ii) in the event of any material adverse change in
the business, property or financial condition of the Company (of
which terminating party shall be the sole judge); (iii) in the event
of any action, suit or proceeding at law or at equity against the
Company or Consultant, or by any Federal, State or other commission
or agency where any unfavorable decision would materially adversely
affect the business, property, financial condition or income of a
party; (iv) in the event of adverse market conditions of which event
the terminating party is to be the sole judge. Further, Consultant's
commitment will be subject to receipt by Consultant of all
information and verifications thereof which Consultant or their counsel
may reasonably request from the Company in a manner and form
satisfactory to Consultant.
In the event of Termination by Consultant, upon grounds stated
herein above, Consultant shall be entitled to accrued fees and
expense reimbursements and shares otherwise payable shall be paid as
though this Agreement was not terminated.
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10. MISCELLANEOUS.
10.1 Authorization. This Agreement has been duly authorized, executed
and delivered by and on behalf of the Company and the Consultant.
10.2 Notices. Any notice or other communication required or permitted
by any provision of this Agreement shall be in writing and shall
be deemed to have been given or served for all purposes if
delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed to the
parties as follows:
To Consultant: Northwest Capital Partners, L.L.C.
Mr. Xxxxx Xxxxxx
00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
To the Shareholders
and to the Company: Mobile PET Systems, Inc.
Mr. Xxxx Xxxxx
0000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
10.3 Validity; Complete Agreement. The validity and enforceability of
any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. This Agreement sets
forth the entire understanding and embodies the entire agreement
of the parties with respect to the subject matter covered hereby
and supersedes all prior or contemporaneous oral or written
agreements, understandings, arrangements, negotiations or
communications among the parties hereto.
10.4 Amendment. This Agreement shall not be modified or amended except
by written agreement of the parties hereto.
10.5 Governing Law. This Agreement shall be governed by the laws of the
state of Washington giving effect to that state's conflict of laws
principle.
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In witness whereof, the parties hereto have executed this Agreement as of
the date first above written.
NORTHWEST CAPITAL PARTNERS, L.L.C.
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx, President
MOBILE PET SYSTEMS, INC.
By: /s/ Xxxx Xxxxx
-------------------------------------------
Xxxx Xxxxx, President & CEO
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EXHIBIT "A"
Mobile PET Systems, Inc.
Financing Requirements
Attached hereto and made a part hereof the
Agreement between Mobile PET Systems, Inc.
and Northwest Capital Partners, L.L.C.
Dated December 15, 1998
MINIMUM AMOUNT APPROXIMATE DATE
$700,000 Interim Financing January 31, 1999
$1,000,000 Interim Financing (1) June 30, 1999
Third Stage financings as required (2)
(1) The price per share of common stock shall be determined by the Company
following consultation with Consultant.
(1) The term "Interim Financing" as used in the Agreement shall include
segment 1 above.
(2) Within 6 months after the date the Company's common stock is quoted on
the NASD OTC Bulletin Board, provided that the Company has subsequently
filed with the U.S. Securities and Exchange Commission a Form 10
pursuant to Section 12(g) of the 1934 Act.
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MOBILE PET SYSTEMS, INC.
APPROVAL OF CAPITAL RESTRUCTURE
The undersigned hereby agree to revise the Capital Structure of Mobile PET
Systems, Inc. as indicated below. Furthermore, the undersigned agree to
allow the Mobile PET Systems, Inc. Compensation Committee to grant stock
options from those shares of stock reserved in the Employee Pool to new or
existing hires, in accordance with the option package structure guidelines to
be determined by the Mobile PET Systems, Inc. Compensation Committee, and at
the Committee's discretion.
Signed this 15th day of December, 1998 by:
/s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx
President, Northwest Capital Partners, L.L.C.
Xxxx Xxxxx
-------------------------------------
Xxxx Xxxxx
Chairman & CEO, Mobile PET Systems, Inc.
NUMBER OF SHARES OF COMMON STOCK
Shareholder After Restructuring
Xxxx Xxxxx 5,000,000
Xxxx Xxxxxxx 800,000
Stock Options 1,000,000
Northwest Capital 1,200,000
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TOTAL 8,000,000
FINANCING REQUIRED Dollars Received # of Shares to be Issued
January 31, 1999 $ 700,000
June 30, 1999 $1,000,000
----------
TOTAL $1,700,000
TOTAL $1,700,000 LESS THAN or = 5,900,000 or approx. 45%
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