EXHIBIT 10.3
Q MATRIX, INC.
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into as
of September 1, 2003 by and between Q Matrix, Inc., 000 Xxxxxxxx Xxxx., Xxxxx
000, Xxxxx Xxxx, XX 00000, and Hanover Capital Corporation a Nevada
Corporation located at 00 Xxxxxxxx Xxxx, Xxxx Xxxxxx, XX 00000
("Consultant").
1. Engagement and Responsibilities
1.1 Upon the terms and subject to the conditions set forth in this
Agreement, Q Matrix, Inc. hereby engages Consultant as a consultant, and
Consultant accepts such engagement. Unless Q Matrix, Inc. consents otherwise;
Consultant agrees that Xxxxx X. Xxxx shall be primarily responsible for the
services of Consultant under this Agreement.
1.2 The Consultant acknowledges that the company desires to accomplish
the following agenda:
a. The company wishes to implement a $2,000,000 equity offering
with a qualified broker dealer.
b. Q Matrix, Inc. wishes to create a public awareness of the stock
issue via the Internet, broker dealer relations, and use of financial news
networks, etc.
c. The company will embark on an additional corporate financing
structure of two to five million dollars that will enable the company to
pursue various forms of financing either through a private placement, a
secondary offering, or funding from various institutions or pension funds.
d. The company will pursue a merger and acquisition program by
locating and evaluating synergistic opportunities that could be beneficial
towards the total evaluation and growth of Q Matrix, Inc.
1.3 Consultant's duties and responsibilities shall include assistance in
identifying; developing and promoting the formation of relationships with
Persons that may be beneficial to Q Matrix, Inc. These relationships would
include potential strategic partners, merger or acquisition candidates,
customers, business contacts, employees, agents, consultants, broker dealers
or other valuable contacts for Q Matrix, Inc. Consultant shall not be
obligated to spend any fixed or minimum number of hours in the performance of
its duties pursuant to this Agreement.
1.4 Q Matrix, Inc. acknowledges that Consultant retains the right to
provide consulting services to other Persons and nothing in this Agreement
shall be construed to limit or restrict Consultant in conducting such business
with respect to others, or in rendering advice to others or conducting any
other business.
1.5 The Company acknowledges that Hanover Capital Corp. is not a broker
dealer and will not partake in the following activities:
a. Provide evaluations.
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b. Negotiate or advise to the structure or terms of a security
offering.
c. Participate in negotiations with third-party investors.
d. Perform due diligence for broker dealers.
e. Participate in the preparation or distribution of documents
relating to a securities offering.
f. Participate in securities distribution.
2. Definitions
"Person" shall mean an individual, corporation, partnership, limited
liability company or partnership, association, trust, government or
governmental agency, or other entity.
3. Compensation; Reimbursement of Expenses
Hanover's capital compensation is fee based and will not be percentage
based in relation to any type of securities offering.
Hanover Capital Corporation's compensation package will be as follows:
1. The term of the contract will be 12 months, which can be cancelled by
any party at any time with 10 days written notice prior to the end of each
monthly period.
2. Retainer $5,000; $5,000 a month thereafter.
3. A total of 400,000 shares will be issued based upon 10 million shares
outstanding. These shares will have piggyback registration rights but will
not have anti-dilution rights.
i) 100,000 shares upon the initiation of an SB2 registration
statement and cancelable if SB2 registration is negated.
ii) 300,000 shares upon the filing of an SB2 registration statement.
4. Q Matrix, Inc. agrees, from time to time upon request, to reimburse
Consultant for all reasonable out-of-pocket expenses and disbursements
incurred in connection with this retention.
4. Term of Engagement
4.1 Consultant's engagement pursuant to this Agreement shall commence on
the date hereof and shall terminate on the earlier to occur of the following:
4.2 Upon the date set forth in a written notice of termination delivered
by Q Matrix, Inc. to Consultant, which date shall not be prior to 10 days from
the date of delivery of the notice.
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5. Indemnification
Q Matrix, Inc. agrees to indemnify and hold harmless Consultant and its
directors, officers, agents and employees, and each other person, if any,
controlling Consultant ("Indemnified Parties"), from and against any losses,
claims, damages or liabilities (or actions, including shareholder actions, in
respect thereof) related to or arising out of this engagement, the Financing
and Consultant's actions pursuant to this Agreement, and will reimburse the
Indemnified Parties for all expenses (including counsel fees and court costs)
as they are incurred by the Indemnified Parties in connection with
investigating, preparing or defending any such action or claim, whether or not
in connection with pending or threatened litigation in which the Indemnified
Party is a party. If a claim for indemnification hereunder is to be made by
any party entitled to be indemnified hereunder, such party shall provide
prompt written notice to Q Matrix, Inc. of the commencement of such action or
assertion of such claim, but the failure to give such notice shall not affect
any obligation of Q Matrix, Inc. to indemnify such party, except to the extent
(and only to the extent) that Q Matrix, Inc. is materially prejudiced in its
defense. Q Matrix, Inc. will not, however, be responsible for any claims,
liabilities, losses, damages or expenses which are determined to have resulted
from Consultants' bad faith or willful misconduct. Q Matrix, Inc. also agrees
that no Indemnified Party shall have any liability to Q Matrix, Inc. for or in
connection with such engagement except for any such liability for losses,
claims, damages, liabilities or expenses incurred by Q Matrix, Inc. that is
determined to have resulted from Consultants' bad faith or willful misconduct.
The foregoing indemnification shall be in addition to any rights that any
Indemnified Party may have at common law or otherwise, including, but not
limited to, any rights to contribution.
6. Corporate Obligation
The obligations of Consultant are solely corporate obligations, and no
officer, director, employee, agent, shareholder or controlling person of
Consultant shall be subject to any personal liability whatsoever to any
person, nor will any such claim be asserted by or on behalf of any other party
to this Agreement.
7. Miscellaneous
7.1 Notices. All notices, requests, demands and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in
writing, and shall be delivered by personal service, courier, facsimile
transmission or by United States first class, registered or certified mail,
postage prepaid, addressed to the party at the address set forth on the
signature page of this Agreement. Any Notice, other than a Notice sent by
registered or certified mail, shall be effective when received; a Notice sent
by registered or certified mail, postage prepaid return receipt requested,
shall be effective on the earlier of when received or the third day following
deposit in the United States mails.
7.2 Any party may from time to time change its address for further
Notices hereunder by giving notice to the other party in the manner prescribed
in this Section
7.3 Entire Agreement. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, related to the subject matter of this
Agreement are hereby merged herein.
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7.4 Waiver and Amendment. No provision of this Agreement may be waived
unless in writing signed by all the parties to this Agreement, and waiver of
any one provision of this Agreement shall not be deemed to be a waiver of any
other provision. This Agreement may be amended only by a written agreement
executed by all of the parties to this Agreement.
7.5 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California without giving effect to the principles of
conflicts of law thereof.
7.6 Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
7.7 Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
7.9 Attorneys' Fees. If any action or proceeding is brought to enforce
or interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages,
reasonable attorneys' fees to be fixed by the court. The prevailing party is
the party who is entitled to recover the costs of its action or proceeding,
whether or not such action or proceeding proceeds to final judgment. A party
not entitled to recover its costs of suit may not recover attorneys' fees. No
sum for attorneys' fees shall be counted in calculating the amount of a
judgment for purposes of determining whether a party is entitled to recover
its costs or attorneys' fees.
7.10 Judicial Interpretation. Should any provision of this Agreement or
any of the warrants require judicial interpretation, it is agreed that a court
interpreting or construing the same shall not apply a presumption that the
terms hereof or thereof shall be more strictly construed against any person by
reason of the rule of construction that a document is to be construed more
strictly against the person who itself or through its agent prepared the same,
it being agreed that all parties have participated in the preparation of this
Agreement and the Warrants.
In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Q Matrix, Inc.
By:/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
Hanover Capital Corporation
By:/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx, President
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