EXHIBIT 10.23
February 6, 2001
Xxxxxxxxx Xxxxxx
Chairman and Chief Executive Officer
U.S. Laboratories, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 00
Xxx Xxxxx, XX 00000
Re: Investor Relations Agreement
Dear Dick:
This letter agreement contains the terms under which Pont Loma Partners, Inc.
("PLP") will provide services to U.S. Laboratories, Inc. ("USLB"). It is a
contract between PLP and USLB. PLP and USLB will be referred to as a "Party" or
collectively, as the "Parties." The relationship between the Parties is that of
independent contractor and nothing else.
1. Services: USLB retains PLP to provide financial advisory and investor
relations services. Among other duties, PLP shall introduce USLB to its
contacts in the financial community and advise USLB on expanding its network
of securities firms, stockbrokers, market makers, research analysts, and
institutional and individual shareholders.
2. Access to Information: USLB acknowledges that in order for PLP to
successfully complete any aspect of this project, it must fully cooperate
with PLP. On execution of this agreement, USLB agrees to promptly provide
PLP with copies or make available the originals of all requested
information. PLP agrees to keep all such information confidential until such
time that USLB is authorized to release such information or required to do
so by court of law.
3. Confidentiality: The Parties may furnish each other confidential
information. "Confidential Information" means all non-public business and
technological information. Confidential Information does not include
information that is public at the date of disclosure, information that is
legally disclosed by a third party who is under no duty not to disclose the
information, and information a Party knew before the disclosing Party
disclosed that information publicly or directly to the receiving Party and
provided the receiving party did not obtain that information illegally. The
Parties agree to keep all Confidential Information confidential until it is
no longer Confidential Information. The Parties agree to maintain the
Confidential Information in strict confidence, not disclose it to any third
party unless required in connection with obligations under this agreement.
The Parties will require their officers, directors, employees, agents and
representatives to similarly restrict disclosure and use. The Parties are
responsible for any wrongful disclosure by its employees, officers,
directors and agents. If any court
Investor Relations Agreement
February 6, 2001
Page 2 of 4
or other authority orders disclosure of Confidential Information, the
Parties will use their best efforts to protect confidentiality and
immediately notify the disclosing Party so that it may also take actions to
preserve confidentiality.
4. Expenses: USLB agrees to reimburse PLP for all reasonable out-of-pocket
expenses. PLP will periodically xxxx USLB for all expenses as they are
incurred. PLP agrees that any single expense of $500.00 or more will require
advance approval from USLB before the expense is incurred.
5. Non-Circumvention: USLB agrees that all information relating to potential
business opportunities identified by PLP and the contacts identified by PLP
relating to such opportunities are Confidential Information and will not be
shared by USLB with any other party without advance written consent of PLP.
The Parties agree that any transaction with any such contact without the
participation of PLP before or after termination of this Letter Agreement
must include competitive compensation for PLP.
6. Cash Compensation: USLB will pay to PLP $3,000 per month in advance.
Payments shall be due on the 15th of each month. This Agreement will
commence and the first payment will be due on February 15, 2001.
7. Equity Compensation: USLB will grant the following stock purchase warrants
to PLP per the following terms:
a. $40,000 common stock purchase warrants with a strike price of $4.50 to
be granted immediately upon the execution of this Agreement.
b. 40,000 common stock purchase warrants with a strike price of $4.50 to be
granted immediately, yet exercisable only if the closing bid price of
USLB exceeds $6.00 for 20 consecutive trading days.
c. 40,000 common stock purchase warrants with a strike price of $4.50 to be
granted immediately, yet exercisable only if the closing bid price of
USLB exceeds $8.00 for 20 consecutive trading days.
d. The above stock purchase warrants will expire three (3) years from the
date they are granted.
8. Term of Engagement: The term of this Agreement shall be one (1) year and
will commence on February 15, 2001.
9. Limitation of Liability: Neither PLP, nor its affiliates, licensors,
contractors, representatives or agents will be liable to USLB for any
indirect, incidental, special, consequential, exemplary or punitive damages
arising from, connected with or relating to this letter agreement. This
include any lost profits or revenues, lost savings, or other similar
damages. Under no circumstances will PLP's liability ever exceed the amount
paid to it by USLB excluding expense reimbursement. Each party recognizes
and agrees that the warranty disclaimers and liability and remedy
limitations in this
2
Investor Relations Agreement
February 6, 2001
Page 3 of 4
agreement are material bargained for terms of this agreement. They take into
account and reflect the consideration given by each party pursuant to this
agreement and the decision by each party to enter into this agreement.
10. Arbitration: The Parties agree to resolve all claims, dispute and
controversies past, present or future arising out of or related to, this
letter agreement against each and against respective officers, directors,
agents and employees in final and binding arbitration in San Diego,
California under the rules of the American Arbitration Association ("AAA").
The Parties agree to waive any rights to trial by jury, adjudication in a
different venue and notice requirements. The arbitrator will be an
individual knowledgeable about the subject matter of the dispute mutually
agreed upon by the Parties from a AAA panel. If the Parties cannot agree on
an arbitrator, each Party will select an individual from the AAA list, and
the two so selected will choose the arbitrator from another AAA panel. The
arbitrator will apply the substantive law of California without regard to
the principles of conflicts of law or U.S. law, as applicable. The
arbitrator will have the exclusive authority to resolve disputes relating to
interpretation, applicability and enforcement of this letter agreement. Each
Party agrees to split the cost of arbitration excluding legal fees. The
arbitration process, including selection of the arbitrator, exchange of
requests for information and the arbitration hearing will be completed
within 60 days following the institution of the arbitration by a party, and
the actual arbitration hearing shall be limited to 1 day. The parties may
enter judgment on any arbitration award in any court having jurisdiction.
This paragraph shall survive termination of this agreement. Both arbitrators
and courts of law shall award all costs (excluding arbitration costs) and
reasonable attorney fees to the prevailing party in any arbitration or
litigation.
11. No Waiver: The Parties will not treat any failure to object to any terms of
this agreement as a waiver of those terms. Consent or approval on any one
occasion does not mean consent on any other item or any other time.
12. Governing Law: This letter agreement shall be interpreted equally as to all
Parties. It will be governed by the laws of the State of California without
giving effect to choice of law provisions.
13. Severability: If an arbitrator or court of competent jurisdiction determines
any part of this agreement invalid or unenforceable, and the decision is not
subject to appeal, the Parties agree that the particular part will be deemed
severed. If a term is invalid because of its scope, the term will be deemed
valid to the extent of the scope permitted by applicable law. This letter
agreement will be binding on successors and assigns.
14. Notification: Should a Party have to notify the other for any reason that
Party agrees to do so in writing delivered personally, by mail or by
reputable overnight delivery service. Notification shall be delivered to the
following addresses:
3
Investor Relations Agreement
February 6, 2001
Page 4 of 4
If to PLP: Xxxxxxx X. Xxxxx, Chief Executive Officer
Point Loma Partners, Inc.
000 X. Xxxxxx, Xxx. 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
If to USLB: Xxxxxxxxx Xxxxxx
Chairman and Chief Executive Officer
U.S. Laboratories, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 00
Xxx Xxxxx, XX 00000
The Parties can change these addresses by notifying each other in
writing in accordance with the terms of this agreement.
If USLB wishes to be a Party to this letter agreement, and be bound by its
terms, please have an authorized representative on the approval page (signature
line provided below). USLB should return a signed copy of this Agreement to PLP
together with a check in the amount of $3,000.00.
Sincerely,
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Chief Executive Officer
Point Loma Partners, Inc.
ACKNOWLEDGEMENT AND APPROVAL:
We have read this five (5) page letter agreement. We understand and accept its
contents. We, the undersigned, also represent that we are authorized to sign on
behalf of our respective Parties and authorized to bind our respective Parties
to the provisions of this letter agreement.
Point Loma Partners, Inc. U.S. Laboratories, Inc.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxxxx Xxxxxx
--------------------------- ------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxxxx Xxxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
Date: February 15, 2001 Date: February 15, 2001
4
POINT LOMA PARTNERS, INC.
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
(000) 000-0000
February 9, 2001
Xxxxxxxxx Xxxxxx
Chairman and Chief Executive Officer
U.S. Laboratories, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 00
Xxx Xxxxx, XX 00000
Re: Amendment to Investor Relations Agreement ("Amendment")
Dear Dick,
With respect to our Letter Agreement re: Investor Relations Agreement (the
"Original Agreement"), we have agreed to amend the Original Agreement as
follows:
1) We hereby confirm that the date of the Original Agreement shall be as of
February 6, 2001, the date on the first page of the Original Agreement.
2) Section 5 of the Original Agreement, "Non-Circumvention," is hereby amended
to read in its entirety:
"Non-Circumvention: USLB agrees that all information relating to
potential business opportunities identified by PLP and the
contacts identified by PLP relating to such opportunities are
Confidential Information and will not be shared by USLB with any
other party without advance written consent of PLP. The Parties
agree that any transaction before or after termination of this
Letter Agreement with any such contact without the participation
of PLP must include competitive compensation for PLP."
3) Section 8 of the Original Agreement, "Term of Engagement", is hereby amended
to read in its entirety: "The term of this Agreement shall commence on
February 6, 2001 and end on February 9, 2003."
IR Agreement Amendment
Februray 9, 2001
Page 2 of 3
4) The equity compensation described in Section 7 of the Original Agreement
shall be deleted in its entirety, and replaced by Sections 4, 5 and 6 of
this Amendment.
5) A warrant to purchase 65,000 shares of common stock at $4.50 per share,
shall be granted and fully vested as of the date hereof. This warrant shall
expire on February 8, 2004. U.S. Laboratories, Inc. ("USLB") hereby agrees
to register the shares underlying this warrant in its upcoming registration
statement.
6) A second warrant to purchase 30,000 shares of common stock at $4.50 per
share shall be granted by USLB to Point Loma Partners, Inc. ("PLP") on
February 9, 2002 at the sole discretion of USLB if it deems that PLP has
faithfully performed its duties. If so granted, this warrant shall expire on
February 8, 2005. If so granted, USLB hereby agrees to include the shares
issuable upon exercise of this warrant in any registration statement filed
after February 9, 2002.
7) A third warrant to purchase 25,000 shares of common stock at $7.00 per share
shall be granted by USLB to PLP on February 8, 2003 at the sole discretion
of USLB if it deems that PLP has faithfully performed its duties. If so
granted, this warrant shall expire on February 7, 2006. If so granted, USLB
hereby agrees to include the shares issuable upon exercise of this warrant
in any registration statement filed after February 8, 2003.
8) If PLP terminates or otherwise materially defaults under the Original
Agreement, as amended by the terms of this Amendment (as may be further
amended, the "Agreement") for any reason, then 50% of the cash payments
received through the date of such termination shall be refunded promptly to
USLB.
9) Both parties acknowledge that the Original Agreement was in error,
necessitating the changes set forth in this Agreement.
10) The Original Agreement shall remain in effect except as modified by the
terms of this Amendment.
11) The parties represent to each other that the person signing below is
authorized to sign on behalf of the respective parties to this Amendment and
is authorized to bind such party to the provisions of this Amendment.
12) PLP hereby represents that (i) it is an accredited investor as such term is
defined in Rule 501 promulgated under the Securities Act of 1933, as
amended, and (ii) it is acquiring the warrant granted as of the date hereof
for investment purposes only and not with a view towards resale or
distribution.
IR Agreement Amendment
Februray 9, 2001
Page 3 of 3
13) Each warrant granted pursuant to Section 4, 5 or 6 of this Letter Agreement
shall be in substantially the same form as that certain Common Stock
Purchase Warrant between USLB and Xxxxxx Capital Corporation, dated March
15, 1998. Any such Warrant Agreement shall supersede any conflicting
provision in the Agreement.
14) The parties may not assign their rights or obligations under the Agreement
without the written counsel of the other party.
If you understand the above and it is acceptable to you, please sign the
attached acknowledgement where indicated and return a copy of this letter to me.
Thank you.
Sincerely,
/S/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Chief Executive Officer
Point Loma Partners, Inc.
ACKNOWLEDGEMENT AND APPROVAL:
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the 9th
day of February, 2001.
Point Loma Partners, Inc. U.S. Laboratories, Inc.
/S/ XXXXXXX X. XXXXX /S/ XXXXXXXXX XXXXXX
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxxxx Xxxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
