May 22, 1996
Mr. C.E. Rick Strattan
President
Cyclodextrin Technologies Development, Inc.
3713 Southwest 42nd Avenue, Suite 3
Gainesville, Florida 32608-2531
By Facsimile Transmission to (352) 375-8287
Re: Professional Engagement
Dear Mr. Strattan:
This letter confirms the terms pursuant to which we have been engaged by
Cyclodextrin Technologies Development, Inc., a Florida corporation (the
"Company"), to provide the following services:
Diversified Corporate Consulting Group. LLC's Responsibilities
1. Recruit and retain at least five market makers for the Company's common
stock.
2. Recruit and supervise a financial public relations firm acceptable to
the Company's Board of Directors, to assist the Company to disseminate
information required in order to permit its securities to realize their proper
trading value.
3. Use our best efforts to introduce the Company to at least two
journalistic publications in multiple media, and to encourage such
publications to feature the Company's progress in communications to
subscribers.
4. (a) Assist the Company to raise required debt or equity capital
through introductions to investment banking firms and individual investors,
when and if necessary; and
(b) Assist the Company to list its securities, if eligible, for
trading on either one or more national securities exchanges or on the NASDAQ
inter dealer quotation system.
5. Use best efforts to induce retail securities brokerage firms to
consider the Company's securities as appropriate investments for their retail
clients.
6. Assist the Company to effect corporate restructuring designed to
maximize its operational efficiency, initiate an acquisitions program, and
develop programs to assure compliance with applicable securities laws, with
initial legal services to be provided through your legal counsel.
7. If required, train Company personnel and consultants in proper
procedures for regulatory compliance and to effect its various strategic and
tactical plans.
8. Develop programs to assist it to comply with the electronic filing
requirements of Securities and Exchange Commission Regulation ST.
Terms of Engagement
1. Except as described below with reference to the services described
above (which are to be completed within 12 months after the date of this
engagement letter), we will bill at out standard hourly rates for all work as
to which a prior written arrangement with different terms has not been entered
into. Any documents prepared by us on existing forms will be subject to a $50
per page initial licensing fee augmented by the time spent in personalizing
the subject form.
2. Notwithstanding the foregoing, during the initial 185 days of our
representation, we will accept and you will pay to us common stock of the
Company, in a quantity equal to 10% of all outstanding common stock (subject
to anti-dilutive rights), registered on Securities and Exchange Commission
Form S-8 in lieu of document licensing fees and of required cash payments for
up to an aggregate of 130 hours of our hourly and licensing fees.
3. Unless requested by you to the contrary, work will be performed by the
person with the lowest billing rate and the requisite knowledge and
experience.
4. All work requiring legal review will be submitted for approval by you
to your legal counsel prior to its use, or, in the alternative, we will engage
legal counsel to conduct such review on your behalf. In the latter case, our
general counsel will review legal matters pertaining to states in which it is
licensed to practice law and matters pertaining to other states will be
referred to attorneys licensed in such other states. Payment of all balances
due such unrelated attorneys will be your responsibility, notwithstanding our
collection function.
5. In addition to our hourly fees, you will be responsible for payment of
all costs and disbursements associated with our services. All statements will
be paid within 10 days after receipt. In the event additional time is
required, the Firm will have the option of selling the account receivable and
you agree to pay interest thereon at the monthly rate of 1%. In the event
collection activities are required you agree to pay all of our out of pocket
costs associated therewith. There will be no change or waiver of the
provisions contained herein, unless such change is in writing and signed by
you and the Firm.
6. Diversified Corporate Consulting Group, LLC, shall have a right of
first refusal to arrange all financing for the Company and its affiliates
(whether debt or equity, foreign or domestic), during the initial 12 months of
this engagement and shall be kept apprised of all capital raising activities
by the Company, whether on a debt or equity basis.
7. (a) The Company shall supply Diversified Corporate consulting
Group, LLC, on a regular and timely basis with all approved data and
information about the Company, its management, its products, and its
operations and Company shall be responsible for advising Diversified Corporate
Consulting Group, LLC of any fact which would affect the accuracy of any prior
data and information supplied to Diversified Corporate Consulting Group, LLC.
(b) The Company shall use its best efforts to promptly supply
Diversified Corporate Consulting Group, LLC with full and complete copies of
all filings with all federal and state securities agencies; with full and
complete copies of all shareholder reports and communications whether or not
prepared with Diversified Corporate Consulting Group, LLC's assistance, with
all data and information supplied to any analyst, broker-dealer, market maker,
or other member of the financial community; and with all product/services
brochures, sales materials, etc.
(c) The Company shall promptly notify Diversified Corporate
Consulting Group, LLC of the filing of any registration statement for the sale
of securities and/or of any other event which triggers any restrictions on
publicity.
(d) The Company shall notify Diversified Corporate Consulting Group,
LLC if any information or data supplied by the Company to Diversified
Corporate Consulting Group, LLC has not been released or promulgated to the
public.
(e) The Company shall be deemed to make a continuing representation
of the accuracy of any and all materials facts, material, information, and
data which it supplies to Diversified Corporate Consulting Group, LLC and the
Company acknowledges it awareness that Diversified Corporate Consulting Group,
LLC will rely on such continuing representation in disseminating such
information and otherwise performing its functions under this engagement
letter.
(f) Diversified Corporate Consulting Group, LLC, in the absence of
notice in writing from the Company, may rely on the continuing accuracy of
material, information and data supplied by the Company.
8. Final drafts of any matters prepared by us will be reviewed by you and,
if legally required, by legal your counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
Only after such review and approval by you and, if required, your legal
counsel, will any documents be filed with regulatory agencies or provided to
third parties. Financial data will be reviewed by competent, independent,
certified public accountants to be separately retained by you. If required by
you, we will assist in selection and supervision of such attorneys and
accountants. Such accountants will be required to review and approve all
financially related filings, prior to submission to the appropriate regulatory
authorities.
9. In the event our services are provided for the benefit of juridical
entities other than the company, no materials for which we are responsible
will be submitted to third parties until they have been reviewed and approved
as to form and content by all executive officers, directors, partners, joint
venturers or persons performing similar roles for the subject juridical
entity. The filing of materials prepared by us with any governmental agency
or provision of copies thereof to other persons shall be deemed presumptive
evidence that our materials have been reviewed and approved as heretofore
described.
Due Diligence Materials
We will upon receipt of a signed copy of this engagement letter, provide
you with the following materials:
1. Officers & Directors Questionnaires to be completed by all
officers, directors and principal consultants to entities for which we perform
services at your request, and then returned to us:
2. A Company Questionnaire to be completed by a knowledgeable person
or persons designated by entities for which we perform services at your
request and then returned to us;
3. A memorandum prepared by us acquainting you with the requirements
of Securities and Exchange Commission Regulation S-B, which governs the bulk
of required Securities and Exchange Commission disclosure, both in conjunction
with Fund raising activities and with periodic reporting obligations.
In the event that you desire different arrangements, either in general or
for specific projects, we will be glad to consider your proposals; however,
all contrary arrangements must be memorialized in a written instrument signed
by this firm. Please sign a copy of this transmission and return it to us by
facsimile transmission to (352) 245-5913.
We look forward to a pleasant and mutually profitable relationship.
Very truly yours,
Diversified Corporate Consulting Group, LLC
William A. Calvo, III
Managing Member
The foregoing is hereby accepted as of the date first above written
Mr. C.E. Rick Strattan
President
Cyclodextrin Technologies Development, Inc.