EXHIBIT 4.1
CONSULTING AGREEMENT
This Consulting Agreement is made effective this 22nd day of November,
1998, by and between Xxxxx Xxxxxx ("Consultant") and Proformix Systems, Inc.
("Client") with respect to the following:
WHEREAS, Consultant has rendered valuable services to Client in connection
with the negotiation, consolidation and/or settlement of certain debts and
liabilities of the Company; and
WHEREAS, Client desires to compensate Consultant for his services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. Engagement of Consultant.
Client hereby retains Consultant to assist Client in the consolidation,
negotiation and/or settlement of as much of the outstanding debts, liabilities
and obligations of the Company as may be reasonably possible, and said
Consultant has further agreed to utilize his reasonable best efforts to perform
hereunder. The foregoing services collectively are referred to herein as the
"Consulting Services." Client agrees that the Consulting Services shall be
complete within 90 days from the date hereof.
2. Compensation.
(a) Client shall issue to Consultant, upon execution of this Agreement,
1,000,000 shares ("Shares") of the Client's Common Stock. The Client agrees that
the Shares will have been registered under the Securities Act of 1933, as
amended, pursuant to a Registration Statement on Form S-8 or other appropriate
form, to be filed with the Securities and Exchange Commission.
3. Term of Agreement, Extensions and Renewals.
This Agreement shall have a term of twelve months from the date hereof.
Client can terminate this Agreement in the event Consultant fails to follow
Client's instructions. Client must advise Consultant that his actions or
inactions are unacceptable and give Consultant a reasonable time to comply. If
Consultant fails to comply, or at later times makes the same unacceptable action
or inaction he can be terminated hereunder by Client' service of notice of
termination to Consultant. In addition, Client can terminate this Agreement if
in the reasonable judgment of its Board of Directors, Consultant's actions or
conduct would make it unreasonable to require Client to retain Consultant. Such
acts are limited to dishonesty, illegal activities, activities harmful to the
reputation of the Client, activities which create civil or criminal liability
for the Client. In the event of termination pursuant to this paragraph, the
Client will be responsible to reimburse costs and expenses to Consultant as set
forth in this Agreement.
4. Nondisclosure of Confidential Information.
In consideration for the Client entering into this Agreement, Consultant
agrees that the following items used in the Clients business are secret,
confidential, unique, and valuable, were developed by Client at great cost and
over a long period of time, and disclosure of any of the items to anyone other
than Client's officers, agents, or authorized employees will cause Client
irreparable injury.
A. Non public financial information, accounting information, plans of
operations, possible mergers or acquisitions prior to the public
announcement.
B. Customer lists, call lists, and other confidential customer data;
C. Memoranda, notes, records concerning the technical processes
conducted by Client;
D. Sketches, plans, drawings and other confidential research and
development data or;
E. Manufacturing processes, chemical formulae, and the composition of
Client's products.
5. Best Efforts Basis.
Consultant agrees that he will at all times faithfully and to the best of
his experience, ability and talents, perform all the duties that may be required
of and from Consultant pursuant to the terms of this Agreement. Consultant does
not guarantee that his efforts will have any impact on Client's business or that
any subsequent financial improvement will result of Consultant's efforts. Client
understands and acknowledges that the success or failure of Consultant's efforts
will be predicated on Client's assets and operating results.
6. Client's Right to Approve Transactions.
Client expressly retains the right to approve, in its sole discretion,
each and every transaction introduced by Consultant that involves Client as a
party to any agreement. Consultant and Client mutually agree that Consultant is
not authorized to enter into agreements on behalf of Client.
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7. Place of Services.
The Consulting Services contemplated to be performed by Consultant will be
performed at locations selected by Consultant.
8. Costs and Expenses.
Client shall be responsible for all reasonable out-of-pocket expenses,
travel expenses, third party expenses, filing fees, copy and mailing expenses
that Consultant may incur in performing Consulting Services under this
Agreement, provided that such expenses are authorized by the Client.
9. Work Stoppage or Early Termination.
Notwithstanding anything to the contrary contained herein, Client shall
have the right at any time to direct Consultant to cease work or abandon its
efforts on Client's behalf, and to refrain from commencing any new work or
providing any further Consulting Services hereunder.
10. Non-Exclusive Services.
Client acknowledges that Consultant is currently providing services of the
same or similar nature to other parties and Client agrees that Consultant is not
prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity. Consultant understands and agrees that
Client shall not be prevented or barred from retaining other persons or entities
to provide services of the same or similar nature as those provided by
Consultant. Consultant will advise Client of its position with respect to any
activity, employment, business arrangement or potential conflict of interest
which may be relevant to this Agreement.
11. All Prior Agreements Terminated.
This Agreement constitutes the entire understanding of the parties with
respect to the engagement of Consultant for the services set forth in Article 1
hereof and all prior agreements and understandings with respect thereto are
hereby terminated and shall be of no force or effect.
12. Representations and Warranties of Client.
Client hereby represents and warrants to Consultant that:
A. Corporate Existence. Client is a corporation duly organized
and validly existing, under the laws of the State of Delaware,
with
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corporate power to own property and carry on its business as
it is now being conducted.
B. No Conflict. This Agreement has been duly executed by Client
and the execution and performance of this Agreement will not
violate, or result in a breach of, or constitute a default in
any agreement, instrument, judgment, decree or order to which
Client is a party or to which Client is subject, nor will such
execution and performance constitute a violation or conflict
of any fiduciary duty to which Client is subject.
C. Validity of Shares. The shares of Common Stock are and will be
when issued, duly authorized, validly issued, fully paid,
non-assessable, and free and clear of all liens and
encumbrances.
D. Authority. Client has the full legal right, power, authority
and approval required to enter into, execute and deliver the
shares of Common Stock and to fully perform all of its
obligations hereunder.
13. Representations and Warranties of Consultant.
Consultant hereby represents and warrant to Client that:
A. Form S-8. Consultant hereby represents that he has not engaged
in any direct or indirect capital raising activities on behalf
of the Client and/or its affiliates.
B. Prior Experience. Consultant has extensive experience in the
areas of the services he is to perform hereunder and has
performed the services contemplated by this Agreement for the
benefit of other client-companies.
C. Information. No representation or warranty contained herein,
nor a statement in any document, certificate or schedule
furnished or to be furnished pursuant to this Agreement by
Consultant, or in connection with the transaction contemplated
hereby, contains or contained any untrue statement of material
fact.
D. Inside Information - Securities Laws Violations. In the course
of the performance of his duties, Consultant may become aware
of information which may be considered "inside information"
within the meaning of the Federal Securities Laws, Rules and
Regulations. Consultant acknowledge that his use of such
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information to purchase or sell securities of Client, or its
affiliates, or to transmit such information to any other party
with a view to buy, sell or otherwise deal in Client's
securities is prohibited by law and would constitute a breach
of this Agreement.
E. Agreement Does not Contemplate Corrupt Practice, Domestic or
Foreign. All payments under this Agreement constitute
compensation for services performed and this Agreement any all
payments, and the use of the payments by Consultant, do and
shall not constitute an offer, payment or promise or
authorization of payment of any money or gift to an official
or political party of, or candidate for political office in
any jurisdiction within or outside the United States. These
payments may not be used to influence any act or decision of
an official, party, or candidate to use his/her/its influence
with a government to assist Client in obtaining, retaining, or
directing business to Client or any person or other corporate
entity. As used in this paragraph, the term "official" means
any officer or employee of a government, or any person acting
in an official capacity for or on behalf of any government;
the term "government" includes any department, agency, or
instrumentality of a government.
F. Reliance upon Representations. The information provided
pursuant to this Agreement may be relied upon by Client, as
true and correct as of the date hereof. Further, Consultant
represents as follows:
(a) by reason of Consultant's knowledge and experience of
financial and business matters in general, and
investments in particular Consultant is capable of
evaluating the merits and risks of this transaction and
in bearing the economic risks of an investment in the
Common Stock and the Client in general and fully
understand the speculative nature of such securities and
the possibility of such loss; and
(b) Consultant has had the opportunity to ask questions and
receive answers concerning the terms and conditions of
the shares to be issued hereby and reserved for issuance
pursuant hereto, and to obtain any additional
information which Client possess or can acquire without
reasonable effort or expense that is necessary to verity
the accuracy of information furnished; and
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(c) Consultant has been furnished with a copy of Client's
most recent Annual Report on Form 10- KSB and all
reports or documents required to be filed under Section
13(a), 14(a) and 15(d) of the Securities Exchange Act of
1934, including but not limited to quarterly reports on
Form 10-QSB; and, in addition, that Consultant has been
furnished with a brief description of the Client's
capital structure and any material changes in Client's
affairs that may not have been disclosed in the
aforementioned documents.
G. Subsequent Events. Consultant will notify Client if,
subsequent to the date hereof, either party incurs obligations
which could compromise its efforts and obligations under this
Agreement.
14. Consultant is not an Agent or Employee.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to act as the employee or agent of Client or otherwise represent or bind Client.
For the purposes of this Agreement, Consultant is an independent contractor. All
final decisions with respect to acts of Client or its affiliates, whether or not
made pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of Client or such affiliates and Consultant shall
under no circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
15. Miscellaneous.
A. Authority. The execution and performance of this Agreement
have been duly authorized by all requisite corporate action.
This Agreement constitutes a valid and binding obligation of
the parties hereto.
B. Amendment. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights
and remedies provided by law. No delay or failure on the part
of either party in the exercise of any right or remedy arising
from a breach of this Agreement shall operate as a waiver of
any subsequent right or remedy arising from a subsequent
breach of
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this Agreement. The consent of any party where required
hereunder to any act of occurrence shall not be deemed to be a
consent to any other act of occurrence.
D. Assignment.
(i) Neither this Agreement nor any obligation created by it
shall be assignable by either party without the prior
written consent of the other.
(ii) Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the
parties and their successors, any rights or remedies
under this Agreement.
E. Notices. Any notice or other communication required or
permitted by this Agreement must be in writing and shall be
deemed to be properly given when delivered in person to an
officer of the other party, when deposited in the United
States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph
company for transmittal or when sent by facsimile
transmission, charges prepared provided that the communication
is addressed to the respective party at the place indicated on
the first page of this Agreement or to such other person or
address designed by the parties to receive notice.
F. Headings and Captions. The headings of paragraph are included
solely for convenience. If a conflict exists between any
heading and the text of this Agreement, the text shall
control.
G. Entire Agreement. This Agreement annexed as an exhibit hereto
contain the entire Agreement between the parties with respect
to the transaction contemplated by the Agreement. This
Agreement may be executed in any number of counterparts but
the aggregate of the counterparts together constitute only one
and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or
more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but
this Agreement shall be
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constructed as if it never contained any such invalid, illegal
or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance
of this Agreement shall be controlled by and construed under
the laws of the State of New York.
J. Attorney's Fees. If any action at law or in equity, including
an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing
party shall be entitled to recover actual attorney's fee from
the other party. The attorney's fees may be ordered by the
court in the trial of any action described in this paragraph
or may be enforced in a separate action brought for
determining attorney's fees.
K. Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement, and shall
execute such other and further documents and take such other
and further actions as may be necessary or convenient to
effect the transactions described herein.
M. Further Actions. At any time and from tie to time, each party
agrees, at its or their expense, to take actions and to
execute and deliver documents as may be reasonably necessary
to effectuate the purpose of this Agreement.
N. Indemnification. Client and Consultant agree to indemnify,
defend and hold each other harmless from and against all
demands, claims, actions, losses, damages, liabilities, costs
and expenses, including without limitation, interest,
penalties and attorneys' fees and expenses asserted against or
imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person,
other than the parties hereto and their successors, any rights
or remedies under or by reason of this Agreement, unless this
Agreement specifically states such intent.
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P. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile a signed original of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
PROFORMIX SYSTEMS, INC.
By:______________________________
Xxxxx Xxxx, President
_________________________________
Xxxxx Xxxxxx
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