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EXHIBIT 10.22
CONSULTING AGREEMENT
THIS AGREEMENT is among TEAM COMMUNICATIONS GROUP, INC., a corporation
organized under the laws of the State of California, whose address is 12300
Wilshire Boulevard, Suite 400, Los Angeles, California 90025 (hereinafter
referred to as the "Company"); INVESTOR RELATIONS SERVICES, INC., of 490 North
Causeway, New Smyrna Beach, Florida 32169 (hereinafter referred to as the
"Consultant"); and INFUSION CAPITAL INVESTMENT CORPORATION, a North Carolina
corporation with its principal offices at 932 Burke Street, Winston-Salem,
North Carolina, as the Financing Agent (hereinafter referred to as "ICIC").
WHEREAS, the Consultant is in the business of assisting public companies
in financial advisory, strategic business planning, and investor and public
relations services designed to make the investing public knowledgeable about
the benefits of stock ownership in the Company; and
WHEREAS, the Consultant may, during the period of time covered by this
Agreement, present to the Company one or more plans of public and investor
relations to utilize other business entities to achieve the Company's goals of
making the investing public knowledgeable about the benefits of stock ownership
in the Company; and
WHEREAS, the Company recognizes that the Consultant is not in the business
of stock brokerage, investment advice, activities which require registration
under either the Securities Act of 1933 (hereinafter "the Act") or the
Securities and Exchange Act of 1934) (hereinafter "the Exchange Act"),
underwriting, banking, is not an insurance Company, nor does it offer services
to the Company which may require regulation under federal or state securities
laws; and
WHEREAS, the parties agree, after having a complete understanding of the
services desired and the services to be provided, that the Company desires to
retain Consultant to provide such assistance through its services for the
Company, and the Consultant is willing to provide such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. DUTIES AND INVOLVEMENT.
The Company hereby engages Consultant to provide a plan, and for
coordination in executing the agreed-upon plan, for using various investor and
public relations services as agreed by both parties. The plan may include, but
not by way of limitation, the following services: consulting with the Company's
management concerning marketing surveys, investor accreditation, availability
to expand investor base, investor support, strategic business planning, broker
relations, conducting due diligence
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meetings, attendance at conventions and trade shows, assistance in the
preparation and dissemination of press releases and stockholder communications,
consulting of mergers with companies, review and assistance in updating a
business plan, review and advise on the capital structure for the Company,
propose legal counsel, assist in the development of an acquisition profile and
structure, recommend financing alternatives and sources, and consult on
corporate finance and/or investment banking issues. In addition, these services
may include production of a corporate profile and fact sheets, personal
consultant services, financial analyst and newsletter campaigns, conferences,
seminars and national tour, including, but not by way of limitation, due
diligence meetings, investor conferences and institutional conferences, printed
media advertising design, newsletter production, broker solicitation campaigns,
electronic public relations campaigns, direct mail campaigns, placement in
investment publications and press releases (see Addendum A).
2. RELATIONSHIP AMONG THE PARTIES.
Consultant 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 the consultant does not have, through stock
ownership or otherwise, the power to control the Company, nor to exercise any
dominating influence over its management.
Consultant understands and acknowledges that this Agreement shall not
create or imply any agency relationship among the parties, and Consultant will
not commit the Company in any manner except when a commitment has been
specifically authorized in writing by the Company.
The Company and the Consultant agree that the relationship among the
parties shall be that of independent contractor.
3. EFFECTIVE DATE, TERM AND TERMINATION.
This Agreement shall begin on November 17, 1998, and will continue
until November 16, 2000.
4. OPTION TO RENEW AND EXTEND.
Company may renew this Agreement on the same terms by providing
written notice to Consultant at any time prior to the expiration hereof.
5. COMPENSATION AND PAYMENT OF EXPENSES.
The Company agrees to pay to ICIC, or its designee, the total sum of
three hundred thirty-three thousand (333,000) shares of commons stock of the
Company as total and complete consideration for the services to be provided by
the Consultant to the Company. The stock shall contain a Rule 144
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restriction and shall be delivered to the Company upon the execution of this
Agreement. It is understood and contemplated by this Agreement that at least
forty-eight thousand (48,000) shares are to be assigned by ICIC to one or more
of its subcontractors.
The parties understand and agree that for its accounting purposes, Company
may elect to amortize the costs of this Agreement over the full term thereof,
even though payment shall be due upon execution.
Upon payment of such stock to ICIC, ICIC will arrange for payment on
behalf of the Company to the Consultant for the services to be provided, and
Company shall have no other obligation to Consultant or to ICIC for payment,
excepting the obligation for additional compensation as contained herein.
Company agrees to pay for all costs and expenses incurred associated with
its employees' working with Consultant and its representatives, including
lodging, meals and travel as necessary. All other expenses for the fulfillment
of this Agreement, as contained in Addendum A, shall be borne by the
Consultant, and by third parties engaged by it in connection with the
performance of the financial and public relations services provided for herein.
If required by federal law or regulation, ICIC will take necessary steps
to prepare and file any necessary forms to comply with the transfer of the
shares of stock from Company to ICIC, including, if required, form 13(d).
6. SERVICES NOT EXCLUSIVE.
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. the Company acknowledges that consultant is
engaged in other business activities, and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
7. CONFIDENTIALITY.
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, divulge, furnish
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not by way of limitation, the
products of the Company, whether in the concept or development stage, or being
marketed by the Company on the effective date of this Agreement or during the
term hereof.
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8. COVENANT NOT TO COMPETE.
During the term of this Agreement, Consultant 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.
9. INVESTMENT REPRESENTATION.
The Company represents and warrants that it has provided ICIC with access
to all information available to the Company concerning its condition, financial
and otherwise, its management, its business and its prospects. the Company
represents that it has provided ICIC with all copies of the Company's filings
for the prior twelve (12) months, if any, (the "Disclosure Documents") made
under the rules and regulations promulgated under the Act, as amended, or the
Exchange Act, as amended. Consultant and ICIC acknowledge that the acquisition
of the securities to be issued to Consultant involves a high degree of risk.
ICIC represents that it and its advisors have been afforded the opportunity to
discuss the Company with its management. The Company represents that it has and
will continue to provide ICIC with any information or documentation to verify
the accuracy of the information contained in the Disclosure Documents, and will
promptly notify Consultant and ICIC upon the filing or any registration
statement or other periodic reporting documents filed pursuant to the Act or the
Exchange Act. This information with include DTC sheets, which shall be provided
to the Consultant no less than every two (2) weeks. the Company hereby
represents that it does not currently have any of its securities in
registration.
The Consultant represents that neither it nor its officers, directors, or
employees is not subject to any disciplinary action by either the National
Association of Securities Dealers or the Securities and Exchange Commission by
virtue of any violations of their rules and regulations and that to the best of
its knowledge neither is its affiliates nor subcontractors subject to any such
disciplinary action.
10. REGULATION S.
The Company agrees that during the term of this Agreement it will notify
the Consultant in writing of the issuance of any common stock pursuant to
Regulation S of the General Regulations of the Securities and Exchange
Commission, or any registration of the Company's securities by means of a Form
S-8 registration statement.
11. ASSIGNMENT.
This Agreement may not be assigned by either party hereto without the
written consent of the other, but shall be binding upon the successors of the
parties. The parties specifically consent to ICIC assigning a portion of its
stock as aforementioned in paragraph 5 whom will act as the contact person
between the Consultant and the Company to be agreed upon by the parties
hereafter.
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12. ARBITRATION.
If a dispute arises out of or relates to this Agreement, or the breach
thereof, and if said dispute cannot be settled through direct discussion, the
parties agree to first endeavor to settle the dispute in an amicable manner by
mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to this Agreement or a breach
thereof shall be settled by arbitration in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator may be entered in any court having jurisdiction thereof. Any
provisional remedy which would be available from a court of law shall be
available to the parties to this Agreement from the Arbitrator pending
arbitration. The situs of the arbitration shall be Orange County, Florida.
13. INDEMNIFICATION.
(a) Both parties agree to indemnify and hold harmless the other, and their
respective agents and employees, against any losses, claims, damages or
liabilities, joint or several, to which either party, or any such other
person, may become subject under the Act, the Exchange Act, or otherwise,
insofar as such losses, claims, damages or liabilities (or actions, suits
or proceedings in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the registration statement, any preliminary prospectus, the prospectus,
or any amendment or supplement thereto; or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading; and will reimburse the other party, or any such other person,
for any legal or other expenses reasonably incurred by the other party, or
any such other person, in connection with investigation or defending any
such loss, claim, damage, liability, or action, suit or proceeding;
provided, however, that the other party will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission, from the registration statement, any
preliminary prospectus, the prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished by one party to the other specifically for use in the preparation
thereof.
(b) Promptly after receipt by an indemnified party under this Section or
notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may otherwise have to
any indemnified other than under this Section. In case of any such action,
suit or proceeding is brought against any indemnified party, and it
notified an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from
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the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
14. REGISTRATION OF SECURITIES AND LIQUIDATED DAMAGES.
The Company hereby acknowledges that time is of the essence with respect
to registration of the Shares, and that in the event the Shares are not
available for sale, by an effective registration statement or otherwise, by
November 16, 1999, the Company agrees to issue either an additional number of
shares equal to ten percent (10%) of the total number of shares issued herein
for each additional thirty (30) day delay in providing an effective
registration statement or removing any Rule 144 legend, or the cash equivalent
of such shares. In the event of a delay of less than a full thirty (30) day
period, the Consultant shall be entitled to a pro-rata allocation of additional
shares.
Consultant understands and acknowledges that the shares of common stock
are being acquired by ICIC for its own account, and not on behalf of any other
person, and are being acquired for investment purposes and not for
distribution. ICIC represents that the common stock will be a suitable
investment for ICIC, taking into consideration the restrictions on
transferability affecting the common stock.
Company will undertake to comply with the various states' securities laws
with respect to the registration of the Shares referred to herein. Company
undertakes to make available for review and comment, on a timely basis and
prior to submission to any regulatory agency, copies of the registration
statement.
15. "PIGGYBACK REGISTRATION."
If the Company proposes to register any equity securities under the
Securities Act for sale to the Public for cash, whether for its own account or
for the account of other security holders, or both, on each such occasion the
Company will give written notice to ICIC and Consultant no less than fifteen
(15) business days prior to the anticipated filing date of its intention to do
so. Upon the written request of ICIC, received by the Company no later than the
tenth (10th) business day after receipt by ICIC of the notice sent by the
Company, to register, on the same terms and conditions as the securities
otherwise being sold pursuant to such registration, any of its registerable
securities (which request shall state the intended method of disposition
thereof), the Company will cause the registerable securities as to which
registration shall have been so requested to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
on the same terms and conditions as any similar securities included therein,
all to the extent requisite to permit the sale or other disposition by the
Consultant (in accordance with its written request) of such registerable
securities so registered; provided, however, that the Company may, at any time
prior to the effectiveness of any such registration
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statement, in its sole discretion and with the consent of ICIC, abandon the
proposed offering in which ICIC had requested to participate.
16. NOTICES.
All notices required or permitted to be given under this Agreement shall
be given in writing and shall be delivered, either personally or by express
delivery service, to the party to be notified. Notice to each party shall be
deemed to have been duly given upon delivery, personally or by courier (such
as Federal Express or similar express delivery service), addressed to the
attention of the officer at the address set forth beneath the signature line
below, or to such other officer or addresses as either party may designate,
upon at least ten (10) days' written notice, to the other party.
17. GOVERNING LAW.
The Agreement shall be construed by and enforced in accordance with the
laws of the State of California.
18. ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement among the
parties. There are no other agreements, conditions or representations, oral or
written, express or implied, with regard thereto. This Agreement may be amended
only in writing signed by all parties.
19. NON-WAIVER.
A delay or failure by any party to exercise a right under this Agreement,
or a partial or single exercise of that right, shall not constitute a waiver of
that or any other right.
20. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
21. BINDING EFFECT.
The provisions of this Agreement shall be binding upon all parties, their
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year provided herein.
CONSULTANT: COMPANY:
TEAM COMMUNICATIONS GROUP, INC. INVESTOR RELATIONS SERVICES, INC.
By: /s/ DREW S. LEVIN By: /s/ RICHARD J. FIXARIS
--------------------------- -------------------------------
Drew S. Levin, Chairman Richard J. Fixaris, President
and CEO
ICIC:
INFUSION CAPITAL INVESTMENT
CORPORATION
By: /s/ DANIEL STARCZEWSKI
-------------------------------
Daniel Starczewski, President
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ADDENDUM A
CORPORATE PROFILE AND FACT SHEET
A two-page, two color broker fact sheet, and a four-page, full color
Company profile will be created, each highlighting the Company and the benefits
of owning the Company's stock. These places are included in broker/dealer
information packages for dissemination to prospective investors, and may also be
targeted to stock analysts and newsletter editors. Consultant's services include
creative writing, art work, layout and design and printing. Materials updated
four time per year as applicable.
PERSONAL CONSULTANT SERVICES
A Personal Consultant will supervise and actively assist in every facet of
the Company's overall marketing campaign. In addition to coordinating all
above-listed services, the Personal Consultant will maintain daily contact with
investor relations office staff. Company officers and active brokers: he will be
available for consultation 24 hours per day, every day, via cellular telephone,
to address urgent needs as well as general strategy planning. The Personal
Consultant will travel extensively to meet qualified brokers one-on-one, and
will arrange specially scheduled conference calls with audiences of brokers,
analysts and money managers. The Personal Consultant will personally arrange
invitation-only due diligence broker meetings and will directly supervise all
logistics and follow-up. The cost of the Personal Consultant will be paid by the
Consultant.
BROKER SOLICITATION CAMPAIGN
Specialized professional financing public relations services will be
provided through an ongoing telemarketing campaign soliciting new broker dealers
to generate interest in the Company and its stock. This campaign will include
direct personal telephone follow-up with retail brokers in active contact with
Company executives and investor relations staff. Supervised in-house personnel
will be assigned specifically to guide Company interactions with brokers and
field representatives.
PRESS RELEASE
Company press releases will be written and disseminated to news wire
services. Press releases will also be disseminated to the at-large broker
community by fax and mail, plus telephone and fax follow-up with 500-1,000
active brokers. Press releases may be reproduced in national financial magazines
such as Investor's Business Daily, Barron's and Individual Investor.
Addendum A - Page 1
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PRINT MEDIA ADVERTISING
An advertisement, targeted to both brokers and investors, will be
created and inserted in a major financial and investment magazine or newspaper
at the Consultant's cost. Publications which target and deliver large numbers of
active brokers, qualified investors and other niche groups interested
specifically in the Company's product or industry category will be emphasized.
Consultant's services include creative writing, art work, layout and design, and
coordination of magazine/newspaper inserts.
FINANCIAL ANALYST AND NEWSLETTER CAMPAIGN
The Financial Analyst and Newsletter Campaign will be intertwined with
our Broker Solicitation Campaign which provides an essential link to increasing
investor awareness for the Company. Each Company is presented to our carefully
developed network of financial analysts and newsletter publications that
specialize in identifying emerging growth companies and presenting buy
recommendations to their loyal following of investors. Utilization of direct
mail pieces, E-mail, broadcast faxing, and phone contacts will be used to
ensure effective and prompt coverage for our clientele. In order to best expose
the Company, this campaign may include personal meetings with editors,
analysts, and writers for a number of publications and research houses
nationwide.
CONFERENCES, SEMINARS AND NATIONAL TOURS
DUE DILIGENCE MEETINGS. Opportunities for Company exposure before
broker/dealer audiences will be provided in New York, Boston, Chicago, Atlanta,
Orlando, Boca Raton, Denver, San Francisco, southern California and other major
metro areas. Consultant's services include overall meeting coordination and
implementation: room rental, catering (hot and cold hors d'oeuvres and snacks),
alcoholic and non-alcoholic beverages, broker/dealer invitations (printing, mail
coordination, postage and telephone contact), transportation (coach air fare and
hotel accommodations, as applicable), additional broker meetings and telephone
follow-up.
INVESTOR CONFERENCES: Opportunities for Company exposure before large
audiences of qualified, wealthy investors will be provided in various locations
across North America. These conferences provide executives of participating
companies with unique forums for sharing the spotlight with top financial and
investment experts while making personal contact with wealthy investors and
presenting the benefits of the companies. The most popular package for
conference participants includes an exhibit booth, private workshop, broker
presentation and distribution of collateral materials. Among the most popular
and established conferences are those produced by Investment Seminars Inc.,
Blanchard's Investment Conferences and Sound Money Investors, Inc.
Addendum A - Page 2
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CONFERENCE, SEMINARS AND NATIONAL TOURS (CONTINUED)
INSTITUTIONAL CONFERENCES: Opportunities for Company exposure before
representatives of major financial institutions may be arranged for any of the
following conferences: North American Corporate Forum, Westerguard Waldorf
Conference Series, Boston Stockholders Club, Hartford Stockholders Club,
Equities Conference and Investment Research Institute. The conferences sponsored
by the North American Corporate Forum and Westerguard Waldorf Conference Series
are three-day events held in New York, designed to allow participant companies
to meet and consult with investment analysts and portfolio managers representing
all primary investment centers in the United States and Canada.
ELECTRONIC MEDIA
A coordinated mix of financial and investment radio and television
programming, covering major markets across the United States and designed to
serve as Company marketing and lead generation conduits, will be arranged. The
Company may be featured on talk shows, special interview segments and
commercials. Program duplicates may be distributed to select brokers and
investors to heighten Company awareness.
DIRECT MAIL CAMPAIGN
A four-page, full color direct mail lead generation piece, highlighting the
Company and the benefits of owning the Company's stock, will be created. This
lead generator will be mailed to 100,000 selected, qualified investors, in one
large mailing or in smaller increments. Printed on heavy gloss stock, the piece
includes a postage-paid business reply card, plus an identifying telephone
number enabling investors to respond immediately. Additionally, market makers
names and phone numbers may be listed directly on the mailing piece for all-in
lead generation. The piece includes a postage-paid business reply card, plus an
identifying telephone number enabling investors to respond immediately.
Consultant's services include creative writing, art work, layout and design,
printing, list rentals, mail handling, postage and business reply card
coordination.
INVESTMENT PUBLICATIONS
Personal Investing News is a glossy magazine distributed bi-monthly to
approximately 40,000 educated, affluent U.S. investors active in the emerging
growth company marketplace. A two-page interview with a key officer of the
Company, emphasizing the Company's merits and growth potential, will be created
for inclusion in Personal Investing News. An additional two-page advertorial
about the Company, with a similar emphasis on the Company's merits, will be
included in Personal Investing News, and will feature the address and telephone
number of the Company, and/or the address and telephone number for market
makers of the Company stock. In addition, a photograph of the key Company
officer featured in the interview will appear on the front cover of Personal
Investing News to draw attention to the Company's story inside the magazine.
Consultant's services include creative writing, art work, layout and design,
printing and list rentals.
Addendum A - Page 3
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INVESTMENT PUBLICATIONS (CONTINUED)
International Money & Politics is a glossy magazine distributed bi-monthly
to approximately 5,000 educated, affluent U.S. investors active in the emerging
growth company marketplace. The two-page Personal Investing News advertorial
will be reprinted for inclusion in International Money & Politics.
Bull & Bear is a tabloid-style newspaper distributed six to nine times per
year to approximately 60,000 active investors in the United States and Canada.
The two-page Personal Investing News advertorial will be reprinted for
inclusion in Bull & Bear.
Addendum A -- Page 4