CLIENT SERVICE AGREEMENT
THIS AGREEMENT, effective as of August 1, 1998, is made by and between
PINNACLE FUNDING CORPORATION, INC., a Florida corporation ("PFC"), and CORONADO
INDUSTRIES, INC., a Nevada corporation (the "Company").
WITNESSETH:
WHEREAS, PFC is a financial public relations, direct market-
ing, advertising and consulting firm; and
WHEREAS, the Company is publicly held with its common stock trading on
the Over-The-Counter Bulletin Board Market; and
WHEREAS, the Company desires to publicize itself with the intentions of
making its name and business better known to its shareholders, investors and
securities brokerage houses.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed:
A. ENGAGEMENT: The Company hereby engages PFC to publicize the Company
to brokers, prospective investors and shareholders in the manner described in
Section B of this agreement, subject to the further provisions of this
agreement. PFC hereby accepts the Company as a client and agrees to publicize it
in the manner described in Section B of this agreement, subject to the further
provisions of this agreement.
B. PFC's SERVICE PROGRAM: Consists of the following components:
1. PFC will review and analyze all aspects of the Company's
goals, including any proposed acquisitions, and make recommendations on
feasibility and achievement of desired goals.
2. PFC will prepare and distribute a Corporate Overview to
each current shareholder of the Company's common stock along with a letter
highlighting PFC's investor relations campaign. PFC will provide through their
network, securities firms and brokers and individuals interested in purchasing
the Company's common stock in the secondary market and schedule and conduct the
necessary due diligence and obtain the required approvals necessary for those
firms to participate in such secondary market; provided, however, PFC shall
provide firms, brokers and all others only with information which has been
provided to PFC in writing by the Company. PFC will also interview and make
determinations on any securities firms or brokers referred by the Company with
regard to their participation in said secondary market.
3. PFC will be available to the Company to respond to all
inquires received from securities firms and brokers inquiring about the Company.
4. PFC will use its best efforts to obtain the Company
exposure on national and regional financial radio programming, in independent
financial newsletters, and various other financial related publications and
media.
5. PFC will write and produce a press release announcing its
engagement. The Company shall be solely responsible for paying all fees
associated with all actual release(s) through Business Wire, PR Newswire, or any
other comparable news dissemination source.
6. PFC may at its own discretion, and with approval of the
Company, at its own expense pay for special reports that can be published in
various financial trade publications for both public relations and
lead-generating purposes; provided, however, that the content of these special
reports is approved by the Company prior to their publication.
7. In its representation of the Company, PFC shall not violate
any federal or state securities laws.
C. TIME OF PERFORMANCE: Services to be performed under this agreement
shall commence on August 1, 1998 and, unless this agreement is sooner
terminated, shall continue for six months.
D. COMPENSATION AND EXPENSES: In consideration of the services to be
performed by PFC, the Company agrees to pay compensation to PFC as follows:
1. Two Hundred Thousand shares of unrestricted tradeable or
free trading shares of the Company's common stock are to be delivered to PFC by
the Company as follows: 50,000 shares within 10 days of the execution of this
Agreement, and 50,000 shares on or before September 30, October 31, and November
30, 1998. PFC may transfer the common stock issued to it to its officers,
directors and employees: however, PFC shall not transfer the common stock issued
to it except in sales through licensed NASDAQ members at prices no less than the
highest bid price at the time of the sale. Further, PFC, its officers, directors
or employees shall not use any of the common stock issued to it, or allow a
brokerage firm to use any of the common stock issued to it, to sell the
Company's stock "short" or to "short the Company's stock against the box".
2. The Company shall issue warrants to PFC allowing PFC, or
its officers, directors or employees to purchase 500,000 shares of the Company's
common stock at $1.00 per share. These warrants may be exercised through
December 1, 1998 after which date they shall expire.
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E. REPRESENTATIONS AND WARRANTIES OF COMPANY: The Company represents
and warrants to PFC, with each such representation and warranty being deemed to
be deemed material, that:
1. The Company will cooperate fully and timely with PFC to
enable PFC to perform its obligations under this agreement.
2. The execution and performance of this agreement by the
Company has been duly authorized by the Board of Directors of the Company with
accordance with applicable law, and, to the extent required, by the requisite
number of shareholders of the Company.
3. The performance by the Company of this agreement will not
violate any applicable court decree, law or regulation, nor will it violate any
provisions of the organizational documents of the Company or any contractual
obligations by which the Company may be bound.
4. The Company will promptly deliver to PFC a complete due
diligence package to include the latest 10K, latest 10Q, last six months press
releases, and all other relevant materials, including but not limited to
corporate reports, brochures, etc.
5. The Company will promptly deliver to PFC a list of names
and addresses of all shareholders of the Company which it is aware.
6. The Company will promptly deliver to PFC a list of
securities brokers and market makers of the Company's securities which have been
following the Company.
7. The Company will act diligently and promptly in reviewing
materials submitted to it by PFC to enhance timely distribution of the materials
and will inform PFC of any inaccuracies contained therein prior to the projected
publication date.
8. The Company represents that all information include in the
information package furnished to PFC shall disclose all material facts and not
omit any facts necessary to make statements made on behalf of the Company not
misleading.
F. FURNISHING OF INFORMATION BY THE COMPANY: The Company agrees to
update the information package on a continuous basis, the Company understands
that the sole purpose of the information package is for investors relations. PFC
may rely on and assume the accuracy of the information submitted to it by the
Company.
G. COVENANTS OF THE COMPANY: The Company covenants and warrants that
any information submitted for dissemination will be truthful, accurate, in
compliance with all copyright laws and all other applicable laws and regulations
and will not be submitted in connection with improper or illegal act or deed.
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H. COMPANY RESPONSIBLE FOR INFORMATION PROVIDED TO PFC: The Company
assumes and claims all responsibility and liability for the content of all
written information disseminated by PFC on behalf of the Company which have been
approved by the Company. The Company shall indemnity and hold PFC, its
subsidiaries, officers and employees harmless from and against all demands,
claims or liability arising for any reason due to the content of information
disseminated on behalf of the Company. This indemnity shall include any cost
incurred by PFC including, but not limited to, legal fees and expenses incurred
both in administrative proceedings at trial and appellate levels, in settlement
of claims, and payment of any judgement against PFC.
In order for the indemnity provisions of this paragraph to bind the
Company, PFC must within ten (10) business days of receipt notify the Company in
writing of any demands, claims or liability for which PFC claims the Company is
responsible and the Company shall be entitled, but shall not be obligated, to
assume and/or control defense and/or settlement of any action, demand, claim or
liability. The Company shall not be required to indemnify PFC for PFC's own
negligent or intentional acts or omissions.
I. ASSIGNMENT AND DELEGATION: Neither Party may assign any rights or
delegate and duties hereunder without the Party's express written consent.
J. EARLY TERMINATION: If the Company fails to cooperate with PFC, or
fails to make timely payment of the compensation set forth in Section D of this
agreement PFC shall have the right to terminate any further performance under
this agreement. The Company may terminate this Agreement at any time upon verbal
or written notice to PFC. In the event of an early termination of this
Agreement, PFC shall only be entitled to retain the shares previously received
by it as liquidated damages, and not as a penalty, in lieu of all other remedies
and damages; the parties acknowledging and agreeing that it would be too
difficult currently to determine the exact extent of PFC's damage, and that the
receipt and retention of such compensation is reasonable present estimate of
such damages.
K. LIMITATION OF PFC LIABILITY: If PFC fails to perform its service
hereunder, its entire liability to the Company shall not exceed the greater of
(a) the amount of each compensation PFC has received from the Company under
Section D of this agreement or (b) the actual damage to the Company as a result
of such nonperformance. In no event will PFC be liable for any indirect, special
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or consequential damages nor for any claims against the Company by any person or
entity arising from or in any way related to this agreement, unless such damages
result from the use by PFC of information not authorized by the Company or from
PFC's violation of federal or state securities laws.
L. OWNERSHIP OF MATERIALS: All rights, title and interest in and to
materials to be produced by PFC in connection with the agreement and other
services to be rendered under this agreement shall be and remain the sole and
exclusive property of PFC, except that if the Company performs fully and timely
its obligations hereunder, it shall be entitled to receive upon written request,
two hundred fifty (250) copies of all such materials.
M. CONFIDENTIALITY: Until such time as the same may become publicly
known, PFC agrees that any confidential nature will not be revealed or described
to any person or entity. Upon the completion of its services and upon written
request of the Company all materials, original documentation provided by the
Company will be returned to it. PFC will, however, require Confidentiality
Agreements from its own employees and from contractors PFC reasonably believes
will come in contact with confidential material.
N. ENTIRE AGREEMENT: This writing contains the entire agreement of the
parties. No representations were made or implied upon by either party, other
than those expressly set forth. Furthermore, the Company understands that PFC
makes no guarantees, assurances or representations in regard to the results of
its services. No agent, employee or other representative of either party is
empowered to alter any terms, unless done in writing and signed by an executive
officer of the respective parties.
O. CONTROLLING LAW AND VENUE: This agreement's validity, interpretation
and performance shall be controlled under the laws of the State of Arizona.
P. SEPARABILITY: If one or more of the provisions of this agreement
shall be held invalid, illegal, or unenforceable in any respect, such provision,
to the extent invalid, illegal, or unenforceable and provided that such
provision is not essential to the transaction provided for by this agreement,
shall not affect any other provision hereof, and the agreement, shall be
construed as if such provision had never been contained herein.
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Q. ARBITRATION: Any controversy or claim arising out of or relating to
the agreement or the breach thereof, shall be settled by arbitration in
accordance with commercial arbitration rules of the American Arbitration
Association, and judgement upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
R. PREVAILING PARTY: In the event of the institution of any arbitration
or litigation, including the appellate level, with regard to this agreement, the
prevailing party shall be entitled to receive from the non-prevailing party all
costs, reasonable attorney fees and expenses.
S. FAILURE TO OBJECT NOT A WAIVER: The failure of either party to this
agreement to object to, or to take affirmative action with respect to any
conduct the other which is in violation of the terms of the agreement shall not
be construed as a waiver of the violation or breach, or of any future violation,
breach or wrongful conduct.
T. NOTICE: All notices or other documents under this agreement shall be
in writing and delivered personally or mailed by certified mail or overnight
service, postage prepaid and addressed to the representative or company as
follows:
Coronado Industries, Inc. Pinnacle Funding Corp.
00000 X. Xxxxxxxxxx Xxxxx 0000 Xxxxxx Xxxx
Xxxxx 000 Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Xxxxxxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
U. HEADINGS: Headings in this agreement are for convenience only and
shall not be used to interpret or construe its provisions.
V. MISCELLANEOUS:
1. EFFECTIVE DATE OF REPRESENTATION: Shall be August 1, 1998.
2. CURRENCY: In all instances, references to dollars shall be
deemed to be United States Dollars.
3. MULTIPLE COUNTERPARTS: This agreement may be executed in
multiple counterparts, each of which shall be deemed an original.
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4. SIGNATURES: All parties agree that signatures sent by
facsimile transmission are legally binding and acceptable by each party.
The parties hereto have executed this Agreement, effective as of August
1, 1998.
CORONADO INDUSTRIES, INC. PINNACLE FUNDING CORP.
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Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxxx
President President
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