FINANCIAL PUBLIC RELATIONS AGREEMENT
SECURED SERVICES/SOUTHERN SOFTWARE GROUP (NASDAQ-OTCBB:SSWG)
This Financial Public Relations Agreement ("Agreement") is made and entered on
July 7, 2003 (the "Effective Date") or upon the closing of the reverse merger
with Southern Software Group (SSWG) and SecureD Services, Inc. by and between
SecureD Services/Southern Software Group (NASDAQ-OTCBB:SSWG), a Delaware
corporation ("Company") and ▇▇▇▇▇ ▇▇▇▇▇▇ doing business as Capital Market
Relations ("Consultant" or "Capital Market Relations") of Mission Viejo,
California.
WHEREAS, Capital Market Relations' business is financial public relations. Some
of the vehicles and processes which Capital Market Relations offers its clients
include the following:
BROKERAGE CAMPAIGN: Capital Market Relations presents emerging growth companies
to the leading national and retail brokerages.
INSTITUTIONAL CAMPAIGN: CMR works closely with the nation's top money managers,
mutual funds, hedge funds and institutions. These firms specialize and invest in
growth companies like the Company.
RESEARCH COVERAGE: Establish client information with leading buyside and
sellside analysts. Great emphasis is directed toward the Consulting, Managed
Services opportunity and strength and experience of management.
PRESS RELEASES; Issue press releases for distribution to the Capital Market
Relations database of institutional and media contracts. All material releases
will be presented to editors for financial coverage in Dow ▇▇▇▇▇ Newswires,
Reuters, and Bloomberg Networks.
MEDIA RELEASES: Capital Market Relations presents opportunities for interviews
with the financial media, including CNBC, CNNFN, Bloomberg Television, CBS
MarketWatch, The Wall Street Journal, ▇▇▇▇▇▇'▇ and investor's Business Daily, as
well as several financial newsletters and internet portals.
QUARTERLY CONFERENCE CALLS: Arrange investor conference calls with analysts,
brokers, and portfolio managers who invest in emerging companies.
FINANCIAL "ROAD-SHOWS": Schedule periodic meetings for management to present
growth prospects to institutional investors and analysts.
INVESTOR CONFERENCES: Schedule management presentations at selected small-cap
investor conferences.
FAIR DISCLOSURE COMPLIANCE: Capital Market Relations will advise regarding
compliance with all requirements for disclosure of material information
following the corporate guidelines set by the SEC and NASDAQ.
WHEREAS, Company desires to retain Consultant to perform the above financial
public relations services for it, and the Consultant desires, subject to terms
and conditions of this Agreement, to perform such financial public relations
services for the Company.
NOW, THEREFORE, in consideration of the mutual promises and undertakings herein
contained and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged the parties agree as follows:
1) ENGAGEMENT OF CONSULTANT
Company hereby engages Consultant upon the successful merger with SSWG, and
Consultant hereby agrees to render, at the request of the Company, independent
advisory and consulting services for the Company to the best of its ability upon
the terms and conditions herein set forth. Such consulting services
1
shall include but not be limited to the development, implementation and
maintenance of an on-going stock market support system to increase broker
awareness of the Company's activities and to stimulate investor interest in the
Company. The stock market support system shall include but not be limited to
Shareholder Communication Systems and Media Relations Systems, which will be
defined and developed by the Consultant with the approval of the Company. It is
understood that Consultants ability to relate information regarding the
Company's activities is directly proportionate to information provided by the
Company to the Consultant.
2) COMPENSATION
2.1) As compensation for the services rendered by the Consultant, the Company
agrees to pay the Consultant ($60,000 U.S.) annually at a rate of $5,000
per month payable in advance on the first day of each month. The first
two-months shall be paid in advance on the Effective Date.
2.2) Further, as compensation to the Consultant for services rendered pursuant
to this Agreement, the Company shall, upon execution of this Agreement,
issue certain warrants (the "Warrants") to Consultant to purchase up to
150,000 shares of common stock of the Company, $.001 per value, (the
"Warrant Stock") at the exercise prices set forth below for a purchase
price of $150.00 in the aggregate.
The Warrants shall become exercisable at any time commencing on the Effective
Date, pursuant to the following schedule.
A warrant to purchase 25,000 shares at an exercise price of $1.00 per share.
A warrant to purchase 25,000 shares at an exercise price of $2.00 per share.
A warrant to purchase 25,000 shares at an exercise price of $3.00 per share.
A warrant to purchase 25,000 shares at an exercise price of $4.00 per share.
A warrant to purchase 25,000 shares at an exercise price of $5.00 per share.
A warrant to purchase 25,000 shares at an exercise price of $6.00 per share.
The expiration term for the Warrants shall be 3 years from the Effective Date.
The purchase price for the Warrants shall be paid and credited against the first
payment by the Company to Consultant as provided in paragraph 2.1 above.
2
If the outstanding shares of common stock underlying the Warrants are increased
or decreased, or are changed into or exchanged for a different number or kind of
shares or securities or other forms of property (including cash) or rights, as a
result of one or more reorganizations, recapitalization, spin-offs, stock
splits, reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the number and/or kind of shares or securities or
other forms of property (including cash) or rights for which the Warrants may
thereafter be exercised, all without any change in the aggregate exercise price
applicable to the unexercised portions of the Warrants, but with a corresponding
adjustment in the exercise price per share or other unit.
2.3) EXERCISE OF WARRANT
(i) Consultant hereby agrees to provide to the Company ten (10) business
days' prior written notice (a "Notice of Proposed Exercise") of
Consultant's intention to exercise the Warrant, which notice will
specify whether such exercise is a Cashless Exercise or an exercise of
the Warrant for cash as provided in the Warrant agreement.
(ii) If the Notice of Proposed Exercise is given within the ten (10)
business days immediately preceding the Expiration Date of the
Warrant, the Expiration Date of the Warrant shall be extended such
number of days (and only such number of days) necessary to permit
timely exercise of the Warrant.
2.4) RULE 144 STOCK
During the initial term of this Agreement, at the end of each month, Company
shall issue 8,000 shares of its restricted 144 stock to Consultant (that on a
cumulative basis total no more than 96,000 shares), if in Company's sole, good
faith opinion, Consultant has fulfilled Consultant's Investor Relations
activities ("IR") for that month. Company and Consultant will work together to
develop a list of monthly IR activities that will be the basis for determining
if Consultant has met his monthly activity requirements. This list of IR
activities shall be updated by the Parties from time to time so as to be
appropriate for the market conditions at the time.
2.5) REGISTRATION OF WARRANT STOCK AND RULE 144 STOCK
The Company agrees to use commercially reasonable efforts to register the common
stock underlying the Warrant and the Rule 144 stock.
(i) Consultant will be entitled to piggyback registration rights on all
registrations of the Company Stock. If the Company at any time
proposes to conduct a public offering of its securities so as to
register any of its securities under the Act, including under an SB-2
registration statement or otherwise, it will each such time give a
written notice to the Consultant, or its assigns, of its intention to
do so. Upon the written request of Consultant, or assigns, given
within 30 days after the receipt of any such notice, the Company will
use its best efforts to cause all shares underlying the exercise of
the Warrants and the shares of common stock to be registered under the
Act (with the securities which the Company at the time proposes to
register). All expenses incurred by the Company in complying with this
Section shall be paid by the Company (including without limitation all
registration and filing fees, listing fees, printing expenses,
accountants' fees, legal counsel fees or blue sky filing fees).
(ii) In the case of any registration effected by the Company pursuant to
these registration provisions, the Company will use its commercially
reasonable efforts to keep such Registration Statement effective for a
period beginning on the date the Registration Statement is declared
effective by the SEC and ending on the date as of which all of the
Registrable Securities have been sold pursuant to the Registration
Statement; (b) prepare and file with the SEC such amendments and
supplements to the Registration Statement and
3
the prospectus used in connection with the Registration Statement and
the prospectus used in connection with the Registration Statement as
may be necessary to comply with the provisions of the Securities Act
with respect to sales of the Registrable Securities pursuant to the
Registration Statement; (c) provide a transfer agent and registrar for
all Warrant Stock and Rule 144 Stock and a CUSIP number for all
Warrant Stock and Rule 144 Stock; and (d) use its commercially
reasonable efforts to comply with all applicable rules and regulations
of the SEC; and (e) furnish to the Consultant, so long as Consultant
owns any securities forthwith upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual report of the Company; and (iii) such other
information as may be reasonably requested in order to avail the
Holder of any rule or regulation of the SEC that permits the selling
of any such Securities without registration.
2.6) The Company shall also reimburse Consultant for all reasonable
out-of-pocket expenses, including but not limited to travel, air, hotel,
car rental, press releases, conference calls, fax and web broadcasts. Any
expense over $300K must be pre-approved by the Company.
3) TERM
The term of this agreement ("Term") shall begin as of the Effective Date and
shall terminate twelve months (12) months thereafter ("Anniversary Date").
Either party shall have the right to terminate this Agreement by thirty (30)
days written notice to the other party; however, the minimum term of this
Agreement shall be no less than six (6) months. In such termination event, any
consulting fees due Consultant shall be paid on a pro-rated basis, and any
expenses due Consultant shall be paid promptly. Consultant shall have six (6)
months from the later of (i) the termination date, or (ii) registration of
Warrant Stock, to convert all or part of his Warrant to Company common stock.
Any portion of the Warrant not so converted shall expire as of the last day of
the effective period.
Notwithstanding any termination as provided above, provided the Company cause
the Warrant Stock to be registered, the Warrant shall expire three (3) years
from the Anniversary Date. Notwithstanding any termination as provided above,
provided the Company cause the Warrant Stock to be registered, the Warrant shall
expire three (3) years from the Anniversary Date. Further, notwithstanding any
termination as provided above, the Company will have the right to terminate the
Agreement immediately on confirmation that legal action has been brought against
the Consultant for any reason, relating to his relationship with his financial
public relations clients in the information security sector and or investors in
any of these clients.
4) FINDER'S FEE; NON-CIRCUMVENTION AND NON-DISCLOSURE
Neither the Company nor its directors, officers, agents attorneys, employees,
affiliates, representatives, successors, or assigns will consummate a
transaction with any financing sources introduced to the Company by the
Consultant without first notifying Consultant and paying Consultant a fee equal
to eight percent (8%) of any equity capital raised and two percent (2%) of any
debt capital raised on a per transaction basis. This provision will extend for a
period of two (2) years from the date of first introduction of such financing
source by Consultant. The Company shall keep completely confidential the
identity of all financing sources introduced to the Company by Consultant.
5) COMPANY REPRESENTATIONS. The Company represents and warrants to Consultant,
that, as of the Effective Date:
(a) The Company is a corporation organized, in good standing and validly
existing under the law and has requisite power to own and operate its property
and assets and carry on its business as presently conducted.
4
(b) The execution, delivery and performance of this Agreement by the
Company has been duly authorized by all requisite corporate action, and this
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject as to the enforcement of
remedies to applicable bankruptcy, insolvency, reorganization similar laws
relating to or affecting the enforcement of creditors' rights. The execution,
delivery and performance of this Agreement, 144 Stock and the Warrant and
compliance with the provisions hereof and thereof by the Company does not
conflict with, or constitute a breach or violation of the terms, conditions or
provisions of, or constitute a default (or an event with which the giving of
notice or passage of time both could result in default) under, or result in the
creation or imposition of any lien pursuant to the terms of, the Articles of
Incorporation or Bylaws of the Company.
(c) The issuance and delivery of the Warrant, Warrant Stock and Rule 144
Stock is not subject to preemptive or any similar rights of the stockholders of
the Company or any liens or encumbrances arising through the Company; and when
the Warrant Stock and Rule 144 Stock are issued upon exercise and in accordance
with the terms of the Warrant, they will be validly issued and outstanding,
fully paid and authorized nonassessable and free of any liens or encumbrances
arising through the Company.
(d) During the period within which this Warrant may be exercised; the
Company will at all times have authorized and reserved, for the purpose of issue
or transfer upon exercise of this Warrant, a sufficient number of authorized but
unissued shares of Common Stock, when and as required to provide for the
exercise of the rights represented by this Warrant.
6) INDEMNITY
Company shall indemnify Consultant and hold Consultant harmless, except in
the case of gross negligence and material misrepresentation on the part of the
Consultant, from any and all liabilities, claims, damages, losses, costs and
causes of action, including without limitation, attorney's fees arising out of
or connected with the Company's business, representations and actions.
7) CONFIDENTIALITY
The Consultant and the Company each agree to provide reasonable security
measures to keep information of the other party confidential where release may
be detrimental to such party's business interests ("Confidential Information").
Information shall only be deemed Confidential Information if disclosed in
writing to the other party and clearly labeled as Confidential Information.
Consultant and the Company shall each require their employees, agents,
affiliates, subcontractors, other licensees, and others who will have access to
Confidential Information through Consultant and the Company, as the case may be,
to enter into appropriate non-disclosure agreements requiring the
confidentiality contemplated by this Agreement. Each of Consultant and the
Company agree that it will not, either during the term of this Agreement or at
any time thereafter, disclose, use or make known for its or another's benefit,
any Confidential Information acquired or used by it hereunder. Confidential
Information shall not include any information that is or becomes generally
available to the public other than as a result of a disclosure by the party
under a duty of confidentiality, or its representatives, or which is required by
law to be disclosed by the party under a duty of confidentiality.
8) RIGHTS TO WORK
The Company and Consultant agrees and acknowledges that except for the
information directly provided by Consultant to the Company in the scope of his
services under this Agreement, the proprietary information and results of the
Consultant's work for the Company, such as the Capital Market Relations
database, belong exclusively to the Consultant.
5
9) GENERAL PROVISIONS
9.1) GOVERNING LAW AND JURISDICTION
This agreement shall be governed by and interpreted in accordance with the laws
of the state of Delaware. Each of the parties hereto consents to such
jurisdiction for the enforcement of this agreement and matters pertaining to the
transactions and activities contemplated hereby.
9.2) COMPLETE AGREEMENT
This Agreement supersedes any and all of the other agreements, either oral or in
writing, between the parties with respect to such subject matter in any manner
whatsoever. Each party to this agreement Acknowledges that no representations,
inducements, promises or agreements, oral or otherwise have been made by any
Party, or anyone herein, and that no other Agreement, statement or promise not
contained in the agreement may be changed or amended only by an amendment in
writing signed by all Parties or their respective successors-in-interest.
9.3) BINDING
This agreement shall be binding upon and inure to the benefit of the
successors-in-interest, assigns and personal representatives of the respective
Parties.
Binding arbitration. The Company and Consultant agree that any dispute or
controversy arising out of or in connection with this Agreement or any alleged
breach hereof shall be settled by arbitration in the State of Delaware, pursuant
to the rules of the American Arbitration Association. If the parties to such
arbitration cannot jointly select a single arbitrator to determine the matter,
one arbitrator shall be chosen by each party (or, if a party fails to make a
choice, by the American Arbitration Association. On behalf of such party) and
the two arbitrators so chosen will select a third. The decisions of the single
arbitrator jointly selected by the parties thereto, or if the three arbitrators
are selected, the decision of any two of them, will be final and binding upon
the parties thereto and the judgment of a court of competent jurisdiction may be
jurisdiction in such a manner as shall be determined by the arbitrator or
arbitrators.
9.4) UNENFORCEABLE TERMS
Any provisions hereof prohibited by the law or unenforceable under the law of
any jurisdiction in which such provision is applicable shall adhere to such
jurisdiction only be ineffective without effecting any other provision if this
Agreement. To the full extent, however, that such applicable law may be waived
to the end that this Agreement be deemed valid and binding agreement enforceable
in accordance with its terms, the parties hereto hereby waive such applicable
law knowingly and understanding the effect of such waiver.
9.5) EXECUTION IN COUNTERPARTS
This Agreement may be executed in several counterparts and when so executed
shall constitute one agreement binding on all the parties, not withstanding that
all the parties are not signatory to the original to the original and same
counterpart.
9.6) PUBLICITY. Neither party shall make or issue, or cause to be made or
issued, any announcement or written statement concerning this Agreement without
the prior consent of the other party. This provision shall not apply, however,
to any announcement or written statement required to be made by law.
9.7) RETURN OF INFORMATION. Each party shall keep a record of the location where
all Confidential Information furnished or created by the other party is located.
Upon termination of the Agreement, all copies of the Confidential Information of
the other party, including analyses, compilations, forecasts, studies or other
documents will be returned immediately upon the written request therefore. That
portion of the Confidential Information which consists of analyses,
compilations, forecasts, studies or other documents prepared by Consultant or
its representatives will continue to be held by Consultant and kept confidential
and subject to the
6
terms of this Agreement.
9.8) MISCELLANEOUS PROVISIONS
The various headings and numbers herein and the grouping of provisions of this
Agreement into separate articles and paragraphs are for the purpose of
convenience only and shall not be considered a part hereof. The language in all
parts of the this Agreement shall in all cases be construed in accordance with
its fair meanings as if prepared by all parties to the Agreement and not
strictly for or against any of the Parties.
10) NOTICES
Any notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission (provided acknowledgment of receipt thereof is delivered
to the sender) or sent by overnight delivery, or certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed, sent by facsimile transmission or if
mailed three days after the date of deposit in the United States mail as
follows:
If to Consultant, to:
Capital Market Relations
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
E-Mail: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to Company, to:
SecureD Services/▇▇▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
E-Mail:
Fax:
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Or such address as any of the above shall have specified by notice hereunder.
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first herein above written.
SecureD Services/Southern Software Group (NASDAQ-OTCBB:SSWG),
a corporation
By: /s/ King ▇▇▇▇▇
Name: King ▇▇▇▇▇
Title: Chief Executive Officer
Capital Market Relations
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Owner
8