EXHIBIT 10.1
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement (the "Agreement") is entered into this
29th day of May, 2003 by and between Stanton, Walker & Company, a New Jersey
corporation (hereinafter referred to as, "Consultant"), and National Scientific
Corporation. (OTCBB: NSCT) (hereinafter referred to as, "Client"), a Texas
corporation, (collectively referred to as the "Parties") with reference to the
following:
PRELIMINARY STATEMENT
The Client desires to be assured of the association and services of the
Consultant in order to avail itself of the Consultant's experience, skills,
abilities, knowledge, and background to facilitate long range strategic
planning, and to advise the Client in business and/or financial and
merger/acquisition matters and is therefore willing to engage Consultant upon
the terms and conditions set forth herein. Consultant desires to be assured, and
Client desires to assure Consultant, that, if Consultant associates with Client
and allocates its resources necessary to provide Client with its business
advisory and consulting services, Consultant will be paid the consideration
described herein and said consideration will be nonrefundable, regardless of the
circumstances unless it shall be determined through binding arbitration as set
forth in Section 6 hereafter that the Consultant willfully and intentionally
committed fraud or gross negligence in connection with this Agreement.
Consultant agrees to be engaged and retained by Client and upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ENGAGEMENT. Client hereby engages Consultant on a non-exclusive basis, and
Consultant hereby accepts the engagement and its associated Engagement Fee
("Engagement Fee") described Section 2 below, to become a business and financial
Consultant to Client and to render such advice, consultation, information, and
services to the Directors and/or Officers of Client regarding general financial
and business matters including, but not limited to the following:
1.1 ADVICE AND COUNSEL. Consultant will provide advice and counsel regarding
Client's strategic business plans, strategy and negotiations with potential
business strategic partnering, corporate planning and or other general
business consulting needs as expressed by Client.
1.2 CLIENT AND/OR CLIENT'S AFFILIATE TRANSACTION DUE DILIGENCE. Consultant will
participate and assist Client in the due diligence process, where possible,
on all proposed financial transactions affecting Client of which Consultant
is notified in writing in advance, including conducting investigation of
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and providing advice on the financial, valuation and stock price
implications of the proposed transaction(s).
1.3 ANCILLARY DOCUMENT SERVICES. If necessary, Consultant will assist and
cooperate with Client in the development, editing and production of such
documents as are reasonably necessary to assist in any transaction covered
by this Agreement. However, this Agreement will not include the preparation
or procuring of legal documents or those documents normally prepared by an
attorney.
1.4 MERGERS AND ACQUISITIONS. Consultant will provide assistance to Client, as
mutually agreed, in identifying merger and/or acquisition candidates,
assisting in any due diligence process, recommending transaction terms and
providing advice and assistance during negotiations, as needed. It is
expressly understood that Consultant shall have no power to bind Client to
any contract or transaction obligation. Additional compensation to
Consultant for the successful closing of any such merger or acquisition
shall be made pursuant to Section 1.4.a.ii. below:
a. MERGERS AND ACQUISITIONS. Consultant agrees to introduce and/or assist
Client in acquiring, merging, and/or divesting on a non-exclusive
basis, from time to time, as Consultant deems appropriate in its sole
discretion. Consultant will introduce and/or assist the Client with
one or more parties who might be interested in (whether by way of
merger, consolidation, asset purchase, technology license, or
substantially similar transaction) either, (a) acquiring some or all
of Client's assets or, (b) selling some or all of their own assets to
Client and/or, (c) entering into some form of strategic alliance with
Client. In consideration of Consultant's services, Client agrees to
pay Consultant the Merger Fee ("Merger Fee") set forth in paragraph
1.4.a.ii, which is a separate fee from the Engagement Fee.
i. PERFORMANCE BY CONSULTANT. Consultant shall be deemed to have
earned its entire Merger Fee under Section 1.4.a.ii upon, (i)
Consultant's introduction of any potential acquirer or seller of
assets or merger candidate or, (ii) upon materially assisting
Client with merger, acquisition and/or divestiture efforts for an
introduced or non-introduced merger, acquisition and/or
divestiture candidate and, (iii) the consummation of the merger,
acquisition, and/or divestiture by Client within 12 months from
the date of such introduction or effort. Consultant shall be
entitled to receive a Merger Fee (as described in paragraph
1.4.a.ii., below) for each merger, acquisition and/or divestiture
by the Client. Each such obligation of Client to pay such Merger
Fee shall be deemed a separate agreement hereunder severable from
each of the other obligations to pay fees arising hereunder and
each obligation shall be separately enforceable as if separate
written agreements existed for each introduction and/or effort
made by Consultant. Consultant shall not be deemed to have earned
any Merger Fee if a merger/acquisition candidate presents itself
to Client independent from Consultant efforts and the Client
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implements resulting merger/acquisition process without any
material assistance or engagement by the Consultant.
ii. AMOUNT AND PAYMENT OF CONSULTANT'S MERGER FEE FOR
MERGER/ACQUISITION. For a merger/acquisition entered into by
Client as a result of the efforts of, or AN INTRODUCTION BY
CONSULTANT during the term of this Agreement, Client shall pay
Consultant, ten percent (10%) of the total value of the
transaction.
NOTE:Such percentage(s) shall be paid to Consultant in cash or
stock at the Client's discretion. "Total value" shall include,
but is not limited to cash, cash equivalents, debt or stock, and
the reasonable commercial value of any consideration other than
cash paid or received by Client. All shares earned under this
section that have not been registered with the Securities and
Exchange Commission shall be registered by Client on Form S-8 or
similar registration within 10 days of the completion of the
transaction. All registration filing costs in connection with the
registration shall be borne by Client.
b. PAYMENT. In addition to the payment of the Engagement Fee, which is
due and payable upon the execution of this Agreement pursuant to the
terms of Section 2 below, each time a Merger Fee is due as specified
in any other provision of this Agreement, the Merger Fee amount, as
specified therein, shall be payable by Client to Consultant within
twenty (20) days of the closing of the transaction. The Merger Fee due
Consultant shall be in addition to any fee or funds which may be
payable to any other person or entity as a result of the transaction.
Consultant makes no guarantee that it will be able to successfully
locate a merger or acquisition target and in turn consummate a merger
or acquisition transaction for client, or to successfully complete
such a transaction within client's desired time frame. Any comments
made regarding potential time frames or anything that pertains to the
outcome of client's needs are expressions of consultant's opinion
only, and for purposes of this agreement are specifically disavowed.
1.5 STANDARD OF PERFORMANCE. Consultant shall devote such time and efforts to
the affairs of the Client as is reasonably necessary to render the services
contemplated by this Agreement. Any work or task of Consultant provided for
herein which requires Client to provide certain information to assist
Consultant in completion of the work shall be excused (without effect upon
any obligation of Client) until such time as Client has fully provided all
information and cooperation necessary for Consultant to complete the work.
The services of Consultant shall not include the rendering of any legal
opinions or the performance of any work that is in the ordinary purview of
a certified public accountant, or other licensed professional. Consultant
cannot guarantee results on behalf of Client, but shall use commercially
reasonable efforts in providing the services listed above. If an interest
is communicated to Consultant regarding satisfying all or part of Client's
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business and corporate strategic planning needs, Consultant shall notify
Client and advise it as to the source of such interest and any terms and
conditions of such interest.
1.6 AVAILABILITY OF CONSULTANT. The Consultant shall make a reasonable effort
to be available to Client by telephone during the Term of this Agreement
including from time to time to be available after normal business hours as
well as on weekends.
2. COMPENSATION TO CONSULTANT. As consideration for Consultant entering into
this Agreement, Client agrees to cause 625,000 shares of its common stock,
par value $.001 per share, to be issued to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, alter egos of Stanton, Walker & Company in equal quantities of
312,500 shares each. The issuance of said shares shall be registered with
the U.S. Securities and Exchange Commission on its Form S-8 or similar
registration (the "Engagement Fee"). The issuance of said shares shall take
place within 5 business days of the execution of this agreement.
Consultant shall have no obligation to perform any duties provided for
herein if payment [cash and/or stock] is not received by consultant within
the time periods as stipulated above. In addition, consultant's obligations
under this agreement shall be become null and void if any payment owing
hereunder is not delivered within the time periods as stipulated above.
Furthermore, the receipt of the Engagement Fee due to consultant upon
execution of this agreement is not contingent upon any prior performance of
any duties whatsoever described within this agreement. Client expressly
agrees that the Engagement Fee is deemed earned upon execution of this
agreement and is thereafter non-refundable and non-cancelable unless it
shall be determined through binding arbitration as set forth in section 6
hereafter that the Consultant willfully and intentionally committed fraud
or gross negligence in connection with this Agreement.
2.1 EXPENSES. Client shall reimburse Consultant for any expenses that it has
pre-approved that Consultant incurred in performing its duties pursuant to
this Agreement (including printing, postage, express mail, photo
reproduction, travel, lodging, and long distance telephone and facsimile
charges). Such reimbursement shall be payable within thirty (30) days after
Client's receipt of Consultant' invoice.
3. INDEMNIFICATION. The Parties agree to indemnify and hold harmless each
other against any and all liability, loss and costs, expenses or damages,
including but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or howsoever caused by
reason of any injury (whether to body, property, personal or business
character or reputation) sustained by any person or to any person or
property, arising out of any act, failure to act, neglect, any untrue or
alleged untrue statement of a material fact or failure to state a material
fact which thereby makes a statement false or misleading, or any breach of
any material representation, warranty or covenant by the Parties or any of
their agents, employees, or other representatives. Nothing herein is
intended to nor shall it relieve either party from liability for its own
willful act, omission or negligence. All remedies provided by law, or in
equity shall be cumulative and not in the alternative.
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4. CONFIDENTIALITY.
4.1 Consultant and Client each agree to keep confidential and provide
reasonable security measures to keep confidential information where release
may be detrimental to their respective business interests. Consultant and
Client shall each require their employees, agents, affiliates, other
licensees, and others who will have access to the information through
Consultant and Client respectively, to first enter appropriate
non-disclosure Agreements requiring the confidentiality contemplated by
this Agreement in perpetuity.
4.2 Consultant will not, either during its engagement by the Client pursuant to
this Agreement or at any time thereafter, disclose, use or make known for
its or another's benefit any confidential information, knowledge, or data
of the Client or any of its affiliates in any way acquired or used by
Consultant during its engagement by the Client. Confidential information,
knowledge or data of the Client and its affiliates shall not include any
information that is, or becomes generally available to the public other
than as a result of a disclosure by Consultant or its representatives.
4.3 During the Term of this Agreement, Client may use the Consultant's business
name in conjunction with Client's press releases and other Client
communications materials provided Client has received prior written
approval from Consultant for each desired use, which approval will not be
unreasonably withheld.
5. MISCELLANEOUS PROVISIONS.
5.1 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified and
supplemented only by written agreement of Consultant and Client.
5.2 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The obligations of either
party hereunder cannot be assigned without the express written consent of
the other party.
5.3 GOVERNING LAW; VENUE. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the
laws of the State of Arizona, without regard to its conflict of law
doctrine. Client and Consultant agree that if any action is instituted to
enforce or interpret any provision of this Agreement, the jurisdiction and
venue shall be Phoenix, Arizona.
5.4 ATTORNEYS' FEES AND COSTS. If any action is necessary to enforce and
collect upon the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and costs, in addition to any other
relief to which that party may be entitled. This provision shall be
construed as applicable to the entire Agreement.
5.5 SURVIVABILITY. If any part of this Agreement is found, or deemed by a court
of competent jurisdiction, to be invalid or unenforceable, that part shall
be severable from the remainder of the Agreement.
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5.6 FACSIMILE SIGNATURES. The Parties hereto agree that this Agreement may be
executed by facsimile signatures and such signature shall be deemed
originals. The Parties further agree that within ten (10) days following
the execution of this Agreement, they shall exchange original signature
pages.
6. ARBITRATION. All disputes, controversies, or differences between client,
consultant or any of their officers, directors, legal representatives,
attorneys, accountants, agents or employees, or any customer or other
person or entity, arising out of, in connection with or as a result of this
agreement, shall be resolved through arbitration rather than through
litigation. With respect to the arbitration of any dispute, the undersigned
hereby acknowledge and agree that:
A. Arbitration is final and binding on the parties;
B. The parties are waiving their right to seek remedy in court,
including their right to jury trial;
C. Pre-arbitration discovery is generally more limited and different
from court proceeding;
D. The arbitrator's award is not required to include factual
findings or legal reasoning and any party's right of appeal or to
seek modification of ruling by the arbitrators is strictly
limited;
E. This arbitration provision is specifically intended to include
any and all statutory claims which might be asserted by any
party;
F. Each party hereby agrees to submit the dispute for resolution to
the American Arbitration Association, in Phoenix, Arizona within
fifteen (15) days after receiving a written request to do so from
the other party;
G. If either party fails to submit the dispute to arbitration on
request, then the requesting party may commence an arbitration
proceeding, but is under no obligation to do so;
H. Any hearing scheduled after an arbitration is initiated shall
take place in Phoenix, Arizona;
I. If either party shall institute any court proceeding in an effort
to resist arbitration and be unsuccessful in resisting
arbitration or shall unsuccessfully contest the jurisdiction of
any arbitration forum located in Phoenix, Arizona, over any
matter which is the subject of this agreement, the prevailing
party shall be entitled to recover from the losing party its
legal fees and any out-of-pocket expenses incurred in connection
with the defense of such legal proceeding or its efforts to
enforce its rights to arbitration as provided for herein;
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J. The parties shall accept the decision of any award as being final
and conclusive and agree to abide thereby;
K. Any decision may be filed with any court as a basis for judgment
and execution for collection.
7. TERM/TERMINATION. This Agreement is for a term of six (6) months ending
November 28, 2003 with an option at the Client's sole discretion to renew
for one additional six (6) month period ending May 28, 2004 for an
additional compensation of $67,500. Such additional compensation is due on
or before November 29, 2003 and shall be made in either cash or the Clients
common stock at the sole discretion of the Client. If paid in stock, the
exact number of shares to be delivered shall be determined by taking the
average closing bid price of the Clients stock for the ten trading days
prior to November 29, 2003 and dividing that number into $ 67,500. The
issuance of the resultant number of shares shall be registered with the
U.S. Securities and Exchange Commission on its Form S-8 or similar
registration within 5 business days of November 29, 2003. The Client's
timely payment of the additional compensation shall be the only needed
indication of the Client's renewal of this contract.
Consultant shall have no obligation to perform any duties provided for
herein if payment [cash and/or stock] is not received by consultant within
the time periods as stipulated above. In addition, consultant's obligations
under this agreement shall be become null and void if any payment owing
hereunder is not delivered within the time periods as stipulated above.
Client has the right to terminate this agreement at any time by giving the
Consultant 5 day's written notice of termination. Additionally, the
Client's failure to pay the additional 6 months compensation or notice of
termination shall be indication of termination of services under this
Agreement.
8. REPRESENTATIONS, WARRANTS AND COVENANTS. The Client represents, warrants
and covenants to the Consultant as follows:
The Client has the full authority, right, power and legal capacity to enter
into this Agreement and to consummate the transactions that are provided
for herein. The execution of this Agreement by the Client and its delivery
to the Consultant, and the consummation by it of the transactions which are
contemplated herein have been duly approved and authorized by all necessary
action by the Client's Board of Directors and no further authorization
shall be necessary on the part of the Client for the performance and
consummation by the Client of the transactions which are contemplated by
this Agreement.
The business and operations of the Client have been and are being conducted
in all material respects in accordance with all applicable laws, rules and
regulations of all authorities that affect the Client or its properties,
assets, businesses or prospects. The performance of this Agreement shall
not result in any breach of, or constitute a default under, or result in
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the imposition of any lien or encumbrance upon any property of the Client
or cause acceleration under any arrangement, agreement or other instrument
to which the Client is a party or by which any of its assets are bound. The
Client has performed in all respects all of its obligations which are, as
of the date of this Agreement, required to be performed by it pursuant to
the terms of any such agreement, contract or commitment.
The Consultant represents, warrants and covenants to the Client as follows:
The Consultant has the full authority, right, power and legal capacity to
enter into this Agreement and to consummate the transactions that are
provided for herein.
The business and operations of the Consultant have been and are being
conducted in all material respects in accordance with all applicable laws,
rules and regulations of all authorities that affect the Consultant or its
properties, assets, businesses or prospects. The performance of this
Agreement shall not result in any breach of, or constitute a default under,
or result in the imposition of any lien or encumbrance upon any property of
the Consultant or cause acceleration under any arrangement, agreement or
other instrument to which the Consultant is a party or by which any of its
assets are bound. The Consultant has performed in all respects all of its
obligations which are, as of the date of this Agreement, required to be
performed by it pursuant to the terms of any such agreement, contract or
commitment.
The Consultant represents and warrants that Consultant has no known
obligations, legal or otherwise, inconsistent with the terms of this
Agreement or with the Consultant's undertaking this relationship with the
Client.
9. NOTICES. Any notice or other communication required or permitted hereunder
must be in writing and sent by either (i) certified mail, postage prepaid,
return receipt requested and First Class mail; or (ii) overnight delivery
with confirmation of delivery; or (iii) facsimile transmission with an
original mailed by first class mail, postage prepaid, addressed as follows:
If to the Client: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
National Scientific Corp.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
If to Consultant: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Stanton, Walker & Company
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
or in each case to such other address and facsimile number as shall have
last been furnished by like notice. If mailing is impossible due to an
absence of postal service, and other methods of sending notice are not
otherwise available, notice shall be hand-delivered to the aforesaid
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addresses. Each notice or communication shall be deemed to have been given
as of the date so mailed or delivered, as the case may be; provided,
however, that any notice sent by facsimile shall be deemed to have been
given as of the date sent by facsimile if a copy of such notice is also
mailed by first class mail on the date sent by facsimile; if the date of
mailing is not the same as the date of sending by facsimile, then the date
of mailing by first class mail shall be deemed to be the date upon which
notice given.
10. COUNTERPARTS. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. PRELIMINARY STATEMENT. The Preliminary Statement is incorporated herein by
this reference and made a material part of this Agreement.
**SIGNATURE PAGE FOLLOWS**
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
CLIENT: NATIONAL SCIENTIFIC CORP (NSCT)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
Date: May 29, 2003
CONSULTANT:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Its Managing Director
Date: May 29, 2003