THIS AGREEMENT made as of May 16, 2007 (the “Effective Date”)
A. WHEREAS, PMWI wishes to retain Securities Compliance with respect to the services of Smith;
B. WHEREAS, Consultant has certain know-how, expertise and a network of professional support contacts as may be required to achieve the Company’s objectives.
NOW, THEREFORE , in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, PMWI and Consultant hereby agree as follows:
Article I. ENGAGEMENT AND SERVICES
Subject to the terms and conditions herein contained, and effective upon the mutual execution of this Agreement, Smith shall serve PMWI as its Chief Financial Officer and the Company engages Consultant to, and Smith and Consultant accept such appointment and engagement (the “Engagement”) to:
a) develop business models and public company strategies; and
b) prepare summary business plans, presentations and road shows; and
c) introduce direct financing sources, and broker dealers who may act as agent for Company financings, and assist in negotiating financings; and
d) introduce mergers, acquisition and strategic partner candidates, and assist in negotiating related agreements with mergers, acquisition and strategic partner candidates; and
e) generally advise on the timing and implementation of Company corporate strategies as they relate to being a public company; and
f) generally advise on the Securities and Exchange Commission (SEC) rules and regulations as they relate to the Company objectives; and
g) make recommendations regarding the implementation of employee stock option and other stock incentive plans; and
h) review the Company’s capital structure and balance sheet and make recommendations for changes designed to increase the probability that the Company will obtain a listing on a National Exchange; and
i) introduce third parties necessary to effect the Company’s investor relations objectives; and
j) assist in the preparation of forms 10KSB, 10QSB, 8K, registration statements etc.; and
k) assist in the preparation of press releases; and
l) as reasonably may be required, meet with management, board of directors and principal shareholders to further the Company’s objectives (either in person or by telephone, as appropriate), jointly and severally the “Services”.
a) The Company acknowledges and agrees that Consultant has no obligation to perform any services not specifically set forth in Section 1.01 herein.
b) The Company agrees to cooperate with Consultant and will furnish to Consultant all information and data concerning the Company (“the “Information”) which Consultant reasonably deems appropriate for purposes of fulfilling the Services, and will provide Consultant with access to its officers, directors, employees and advisors;
c) The Company represents and warrants to Consultant that all Information included or incorporated by reference in Company documents or communications or otherwise made available to Consultant by the Company; i) will be complete and correct and does not and will not knowingly contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and ii) any projected financial information or other forward-looking information which the Company provides to Consultant will be made by the Company in good faith, based on management’s best estimates at the time and based on facts and assumptions which the Company believes are reasonable;
d) The Company agrees to promptly notify Consultant if the Company believes that any Information that was previously provided to Consultant has materially changed or has become materially misleading;
e) The Company acknowledges and agrees that; i) in rendering the Services hereunder, Consultant will be using and relying on Company provided Information (and information available from public sources and other sources deemed reliable by Consultant); and ii) while an authority on the processes necessary to achieve the Company’s objectives, Consultant, its employees, managers, subcontractors and affiliates are not licensed attorneys, certified public auditors, certified tax planners, registered or licensed investment advisors, registered representatives or broker dealers. The references in this Section 1.02 to the Company will, when appropriate, be deemed also to include its subsidiaries or other affiliates.
a) The manner in which Services are to be performed and the specific hours to be worked by Consultant shall be determined by Consultant, provided that Consultant shall work as many hours as may be reasonably necessary to fulfil Consultants obligations under this Agreement and Consultant shall regularly consult with Company as regards fulfilling the Company’s objectives.
b) Consultant will familiarize itself to the extent it deems appropriate with the business, operations, financial condition and prospects of the Company.
c) The Company acknowledges that Consultant is in the business of providing financial and corporate consulting advice to others and that Consultant’s services shall not be exclusive to Company and without limitation, during the term of this Agreement, nothing herein contained shall be construed to limit or restrict Consultant in conducting such business with others, or in rendering such advice to others nor from engaging in any other activity whether for gain, profit or other pecuniary advantage.
In addition to the compensation described below, the Company shall reimburse Consultant for the actual and reasonable out-of-pocket expenses incurred by Consultant in connection with the performance of its services hereunder; provided however, that Consultant shall obtain pre-approval from Company for any expense or related group of expenses which are to exceed Five Hundred dollars ($500) in total.
a) The term of this Agreement will commence on the Effective Date and will terminate on it own accord on that date which is 90 days year from the Effective Date (the “Termination Date”) and this shall constitute the “Initial Term” of the Agreement. Subsequent to the Initial Term, the Agreement may be renewed for one or more One (1) year periods by mutual written agreement of the parties, each such renewal an “Extension”.
b) Either Company or Consultant may terminate this Agreement by the giving of a Ten (10) day notice in writing (the “Early Termination”).
- 2 -
Article II. COMPENSATION AND EXPENSES
The Company agrees to pay SCI an engagement fee equal to Fifteen Thousand US dollars ($15,000USD) (the “Retainer Fee”) to cover the Initial Term of this engagement. The fee shall be payable in the amount of Two Thousand Five Hundred dollars ($2,500USD) on each of the 1 st and 15 th of each calendar month, with the first payment due on the Effective Date. In the event that there is an Early Termination then SCI shall be entitled to receive within three days of the date on which Early Termination occurs, a single lump payment equal to the full balance of the amounts due under this section 2.01 which would have been payable to SCI had it been engaged by Company through the date of Early Termination.
Article III. COVENANTS AND REPRESENTATIONS OF SCI AND SMITH
Subject to Sections 1.01, 1.02 and 1.03 herein and timely delivery of all compensation due SCI and Smith as set forth under Article II herein, Smith will devote his time, attention and ability to the business of Company and will well and faithfully serve Company and will use his best efforts to promote the interests of Company.
Consultant shall at all times during the performance of his services hereunder be an independent contractor, maintaining sole and exclusive control over his business and operations. At no time will Consultant hold itself out to be the agent, employee, lessee, sub lessee, partner or joint venturer of Company. Neither party hereto shall have the express or implied right or authority to assume or create any obligation on behalf of or in the name of the other party, or to bind the other party in regard to any contract, agreement or undertaking with any third party. It is understood that Smith will not be entitled to any benefits under Company’s retirement, group insurance or medical plans or any other employee benefits, if any, nor will any part of Consultant’s compensation be subject to withholding by Company for the payment of any social security, federal, state or other taxes. In the performance of all services hereunder Consultant shall comply with all applicable laws and regulations.
Upon any termination of this Agreement, Smith will at once deliver or cause to be delivered to Company all books, documents, money, securities, and records of Confidential Information (as defined in Section 5.02 herein) or copies thereto belonging to Company or for which Company is liable to others, which is in the possession, charge, control or custody of Smith.
Article IV. COVENANTS AND REPRESENTATIONS OF COMPANY
The Company represents and warrants to Consultant that this Agreement has been duly authorized, executed and delivered by the Company, and, assuming due execution by Consultant, constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.
a) The Company agrees to indemnify and hold harmless Smith and SCI and, its officers, directors, partners, employees, agents, and counsel, and each person, if any, who controls SCI within the meaning of Section 15 of the 33 Act or Section 20(a) of the 34 Act, as amended, against any and all loss, liability, claim, damage, and expense whatsoever (which shall