AMENDED AND RESTATED CONSULTING AGREEMENT
BETWEEN
HC INNOVATIONS, INC.
AND
STRATEGIC GROWTH INTERNATIONAL, INC.
THIS CONSULTING AGREEMENT (THE "AGREEMENT") IS MADE AND ENTERED INTO AS OF
THE DATE SET OUT BELOW BY AND BETWEEN HC INNOVATIONS, INC., A DELAWARE
CORPORATION (THE "COMPANY") AND STRATEGIC GROWTH INTERNATIONAL, INC.,
A DELAWARE CORPORATION ("SGI").
WHEREAS
WHEREAS, the Company and SGI have entered into that certain Consulting
Agreement, dated July 1, 2005 ("2005 Agreement"), a copy of which is attached
hereto as Exhibit A;
WHEREAS, pursuant to the terms and conditions of the 2005 Agreement,
the Company issued shares of its Common Stock in consideration for services
rendered as provided therein (the "SGI Stock");
WHEREAS, the Company desires to engage SGI in connection with
consulting with the Company with a certain financing and SGI desires to accept
such engagement, all on the terms and conditions hereinafter set forth; and
WHEREAS, the Company and SGI wish to amend and restate the 2005
Agreement as provided herein to provide for the terms and conditions of the new
engagement
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth in this Agreement, the parties hereto agree as
follows:
I. DUTIES
1. SGI will assist the Company in determining a strategy to raise funds in
the aggregate amount of $1,000,000 ("Offering Amount") through a
private placement of debt, equity or convertible securities (the
"Offering"). It is agreed that any such Offering shall be conducted
pursuant to Regulation D of the Securities Act of 1933, as amended.
2. SGI will conduct and attend meetings with the professional financial
community to discuss the feasibility of any Offering and shall solicit
interest
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in assisting THE COMPANY to meet these financing goals.
3. SGI will assist the Company with presentations in connection with any
such Offering, including the preparation of power points, website
content and other information that provides general information about
the Company to the financial community.
4. SGI will advise THE COMPANY regarding the structure of any resulting
transactions.
II. RELATIONSHIP AMONG THE PARTIES
SGI acknowledges that it is not an officer, director or agent of the Company, it
is not, and will not, be responsible for any management decisions on behalf of
the Company, and may not commit the Company to any action. The Company
represents that SGI does not have, through stock ownership or otherwise, the
power to control the Company, nor to exercise any dominating influence over its
management.
SGI understands and acknowledges that this Agreement shall not create or imply
any agency relationship among the parties, and SGI will not commit the Company
in any manner except when a commitment has been specifically authorized in
writing by the Company. The Company and SGI agree that the relationship among
the parties shall be that of independent contractor. SGI agrees that its
employees and subcontractors will be bound by the terms herein.
III. COMPENSATION
Unless sooner terminated as provided herein, the Company shall pay to SGI a cash
consulting fee of 10% of the gross proceeds (excluding the $50,000 below) raised
for the Offering. In the event that the Company raises less than the Offering
Amount, the Company shall pay to SGI a pro rata portion of such fee adjusted to
reflect the amount actually sold in the Offering. The Company shall pay such fee
simultaneously with any closings of the Offering or as soon as practicable
thereafter.
The Company additionally agrees to pay SGI an initial retainer of $50,000 for
services pursuant to this Agreement. SGI agrees to receive such fee from the
gross proceeds of any offering raised.
The Company agrees to revise the lock-up provision pursuant to Section IV of the
2005 Agreement to the following.
IV. RESTRICTIONS ON SGI STOCK/LOCK-UP
The SGI Principals each agree that prior to June 9, 2007 they will not, without
the prior written consent of the Company, sell assign, hypothocate, pledge,
transfer, or otherwise dispose of, directly or indirectly, any of their
respective SGI Stock. In the event that the SGI Stock is included in a
Registration Statement that is declared effective by the Securities and Exchange
Commission prior to June 9, 2007, each of the SGI Principals agree that any and
all sales of the SGI Stock shall be restricted by new a
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lock-up as required by the Company. Furthermore, the SGI Principals agree that
(i) all certificates representing the SGI Stock received shall be endorsed with
an appropriate restrictive legend setting forth the restriction on transfer as
provided herein, (ii) in event that the SGI Stock becomes registered, stop
orders shall be placed by the Company's transfer agent against the certificates
representing the SGI Stock, and (iii) the Company and the Company's transfer
agent shall decline to effectuate the transfer and re-registration of any shares
of SGI Stock transferred in violation of this Agreement.
The Company agrees to exchange the existing certificates reflecting the legend
above.
V. OUT OF POCKET EXPENSES
THE COMPANY will reimburse SGI for all reasonable out of pocket disbursements,
including travel expenses, made in the performance of its duties under the
agreement; provided, however, that SGI must receive prior written approval from
the Company for any out of pocket expenses that exceed $500. Items, such as
luncheons with the professional community, graphic design and printing, postage,
long distance telephone calls, etc., will be billed as expenses are incurred.
VI. LIABILITY
THE COMPANY agrees to indemnify and hold harmless from and against any and all
losses, claims, damages, expenses or liabilities which SGI may incur based upon
information, representations, reports or data furnished by THE COMPANY to the
extent that such material is furnished, prepared or approved by THE COMPANY for
use by SGI; provided, however, the Company shall not be liable for any gross
negligence or willful misconduct on the part of SGI.
VII. TERMINATION UNDER CERTAIN CIRCUMSTANCES
If SGI shall fail, for a period of more than thirty (30) consecutive days, or
for thirty (30) days within any sixty (60) day period, to perform any of SGI's
duties under this Agreement, Company may, at its option, upon notice to SGI,
terminate SGI's engagement effective on the date of that notice.
If SGI shall breach or violate any of the provisions of this Agreement, or fail
to perform in a manner reasonably satisfactory to Company any of the duties
required of SGI and such breach, violation or failure shall continue for a
period of ten (10) days after Company shall have given SGI written notice
specifying the nature thereof in reasonable detail, Company may, at its option,
upon notice to SGI, terminate SGI's engagement effective on the date of that
notice.
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VIII. CONFIDENTIAL INFORMATION
SGI shall maintain in strict secrecy all Confidential Information (as defined
below) obtained by SGI in the course of SGI's engagement, and SGI shall not,
unless first authorized in writing by Company, disclose to, or use for SGI's
benefit or for the benefit of any person, firm or entity at any time either
during or subsequent to the term of SGI's engagement, any Confidential
Information, except as required in the performance of SGI's duties on behalf of
Company. For purposes hereof, "Confidential Information" means all material
information about the Company's business disclosed to the SGI or known by SGI as
a consequence of or through his service to the Company (including information
conceived, originated, discovered or developed by SGI) after the date hereof,
and not generally known.
IX. COVENANT NOT TO COMPETE
During the term of this Agreement, SGI warrants, represents and agrees that it
will not directly participate in the information developed for and by the
Company, and will not compete directly with the Company in the Company's primary
industry or related fields.
X. RETURN OF BOOKS AND PAPERS
Upon the termination of SGI's engagement with Company for any reason, SGI shall
deliver promptly to Company all written or printed materials which are the
property of Company (and any copies of them); and all other materials which may
contain Confidential Information relating to the business of Company, which SGI
may then have in his possession whether prepared by SGI or not.
XI. EQUITABLE RELIEF
In the event a violation of any of the restrictions contained in this paragraph
is established, Company shall be entitled to preliminary and permanent
injunctive relief as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which right
shall be cumulative and in addition to any other rights or remedies to which
Company may be entitled.
XII. TERM
The term of this Agreement shall be for six months commencing on the date set
out below and ending on March 25, 2007.
XIII. BINDING NATURE OF AGREEMENT
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
assigns except that no party may assign or transfer such party's rights or
obligations under this Agreement without the prior written consent of the other
party.
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XIV. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of Connecticut.
XV. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements and conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
XVI. EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of the parties
reflected hereon as the signatories.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set out below
HC INNOVATIONS, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DATE: SEPTEMBER 22, 2006
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STRATEGIC GROWTH INTERNATIONAL, INC.
BY: Strategic Growth International, Inc. DATE: SEPTEMBER 22, 2006
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SGI PRINCIPALS:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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