Exhibit 99.2
CONSULTING AGREEMENT (the "Agreement") dated as of August 3, 2004 (the
"Effective Date") by and between, EDISON RENEWABLES, INC., a Nevada corporation
(the "Company") and CJM GROUP, INC., a New York corporation (the "Consultant").
-------------------------------
WHEREAS, the Company acknowledges that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the sole beneficial
owner of the Consultant, has previously provided services to the Company;
WHEREAS, the Company desires to retain the Consultant to perform the
following consulting services for and on behalf of the Company: (A) assisting
the Company in developing its (i) business model and corporate structure, (ii)
product market positioning, and (iii) strategizing the marketing of industry
related products, and (B) performing certain advisory services in connection
with business development and corporate strategy (the "Services"), and the
Consultant is willing to perform such services on a non-exclusive basis, upon
the terms and conditions herein.;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree, as follows:
1. Retention; Consultant Duties. Subject to the terms and conditions set
forth herein, the Company hereby retains the Consultant, and the Consultant
hereby accepts such retention, to act as a consultant, on a non-exclusive basis,
with respect to providing the Company with the Services during the Term (as
hereinafter defined) of this Agreement. The Consultant will, subject to its
availability, provide such services, from time-to-time, upon the request of the
Chief Executive Officer of the Company during the Term. The Consultant may, in
its discretion, provide such services in person, or via telephone, e-mail, or
fax from any location.
2. Term.
(a) The term (the "Term") of this Agreement shall commence as of the
Effective Date and subject to Section 2(b) below, continue until the third
anniversary of the Effective Date.
(b) Notwithstanding Section 2(a) above, the parties hereto may terminate
this Agreement by mutual consent at any time upon thirty (30) days prior written
notice.
3. Compensation.
(a) As compensation for the Services provided hereunder, the Company shall
issue an aggregate of Three Million Five Hundred Thousand (3,500,000) shares of
Common Stock, $0.001 par value per share (the "Shares"), of the Company to the
Consultant, and shall deliver certificates representing the Shares to the
Consultant (i) within three (3) days after a registration statement on Form S-8
of the Company, registering the issuance of the Shares becomes effective under
the Securities Act of 1933, as amended (the "Securities Act"), or (ii) ninety
(90) days
following the Effective Date. In the event the Shares are issued prior to the
registration thereof on Form S-8, the Consultant does not waive any of its
rights hereunder with respect to such registration by accepting such Shares.
(b) In the event that the Shares have not been issued and the outstanding
shares of Common Stock of the Company are hereafter changed by reason of
reorganization, recapitalization, reclassification, stock split-up, reverse
stock split, combination of shares, stock dividend or the like, an appropriate
adjustment shall be made by the Company's Board of Directors in the number of
Shares to be issued to the Consultant. If the Company shall be consolidated or
merged with another entity, the Consultant shall be entitled to receive the same
number and kind of shares of stock or the same amount of property, cash or
securities as it would have been entitled to receive upon the happening of any
such corporate events as if it had been, immediately prior to such event, the
holder of the Shares.
(c) The Consultant hereby agrees that it shall not sell, dispose of, or
otherwise transfer or grant any option for the sale of the Shares, directly or
indirectly, (i) with respect to 500,000 Shares for a period of six (6) months
following the Effective Date, and (ii) with respect to 500,000 Shares for a
period of twelve (12) months following the Effective Date, without the consent
of the Company, except (x) in a private transaction, provided the transferee or
donee of the Shares agrees to be bound by the terms of this Section 3(c) of the
Agreement, or (y) in the event that the issuance or resale of the Shares have
not been registered, pursuant to Rule 144 promulgated under the Securities Act
of 1933, as amended. The Consultant acknowledges and agrees further that the
certificate(s) representing the Shares shall bear a legend reflecting the
restrictions set forth herein, in or substantially in, the following form:
"Certain of the shares of common stock represented in this stock
certificate (the "Shares") are subject to that certain Consulting
Agreement (the "Agreement") dated August 3, 2004 (the "Effective
Date") between Edison Renewables, Inc. and CJM Group, Inc.
pursuant to which the transfer of (a) 500,000 Shares is
restricted for a period ending on the six (6) month anniversary
of the Effective Date, and (b) 500,000 Shares is restricted for a
period ending on the twelve (12) month anniversary of the
Effective Date, pursuant to the terms of the Agreement."
The Consultant and the Company agree that the Consultant shall return his
certificate(s) representing the Shares to have the number of Shares in the
legend adjusted if the number of issued and outstanding shares of the Company
are changed by reason of reorganization, recapitalization, reclassification,
stock split-up, reverse stock split, combination of shares, stock dividend or
the like.
2
4. Registration Rights. Upon the Effective Date, the Company shall file a
Registration Statement on Form S-8 covering the issuance of the Shares issuable
pursuant to Section 3(a) above, and shall use best efforts to have such
Registration Statement become effective upon the filing thereof. The Company
hereby acknowledges that the Consultant is placing material reliance on the
timely effectiveness of the registration statement in entering into, and
performing under, this Agreement.
5. Independent Contractor. The relationship created hereunder is that of
the Consultant acting as an independent contractor. It is expressly acknowledged
and agreed that the Consultant shall have no authority to bind the Company to
any agreement or obligation with any third party. Consultant acknowledges and
agrees further that, since it is not an employee of the Company, the Company
shall not be responsible for the withholding or payment of any taxes.
6. Representations and Warranties of the Consultant. The Consultant hereto,
hereby represents and warrants to the Company:
(a) it has the power and authority to execute and deliver this Agreement
and to perform the duties and responsibilities contemplated hereby;
(b) that neither the execution of this Agreement nor performance hereunder
will (i) violate, conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under the terms, conditions or provisions of any
contract, agreement or other instrument or obligation to which it is a party, or
by which it may be bound, or (ii) violate any order, judgment, writ, injunction
or decree applicable to it.
(c) In the event the Shares are issued prior to the effectiveness of a
Registration Statement on Form S-8 covering the issuance of the Shares, then in
connection with the issuance of the Shares, the Consultant does hereby represent
and warrant to the Company as follows:
(i) The Shares are being acquired for its own account, for investment
purposes and not with a view to any distribution. The Consultant will not sell,
assign, mortgage, pledge, hypothecate, transfer or otherwise dispose of any of
the Shares unless (A) a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect thereto is in effect and the
prospectus included therein meets the requirements of Section 10 of the
Securities Act, or (B) the Company has received a written opinion of its counsel
that, after an investigation of the relevant facts, such counsel is of the
opinion that such proposed sale, assignment, mortgage, pledge, hypothecation,
transfer or disposition does not require registration under the Securities Act.
(ii) The Consultant represents and warrants further that (A) it is
either an "accredited investor," as such term is defined in Rule 501(a)
3
promulgated under the Securities Act, or, either alone or with the purchaser
representative, has such knowledge and experience in financial and business
matters that it he is capable of evaluating the merits and risks of the
acquisition of the Shares; (B) it is able to bear the economic risks of an
investment in the Shares, including, without limitation, the risk of the loss of
part or all of its investment and the inability to sell or transfer the Shares
for an indefinite period of time; (C) it has adequate financial means of
providing for current needs and contingencies and has no need for liquidity in
its investment in the Shares; and (D) it does not have an overall commitment to
investments which are not readily marketable that is excessive in proportion to
net worth and an investment in the Shares will not cause such overall commitment
to become excessive.
(iii) The Consultant has reviewed the Company's reports, proxy
statements, information statements, and registration statements filed by the
Company with the Securities and Exchange Commission via the ▇▇▇▇▇ System since
January 1, 2003, and the Consultant has been afforded the opportunity to obtain
such information with regard to the Company it has reasonably requested to
evaluate the merits and risks of the Consultant's investment in the Shares.
(iv) The Consultant acknowledges that a restrictive legend will be
placed on any instrument, certificate or other document evidencing the Shares,
or substantially in, the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
sold,transferred, pledged, hypothecated or otherwise disposed of
in the absence of (i) an effective registration statement for
such securities under said act or (ii) an opinion of Company
counsel that such registration is not required."
The Consultant acknowledges that the Company will be relying upon the
foregoing with regard to the issuance of the Shares to the Consultant and any
subsequent transfer of the Shares by the Consultant, in the event the Shares are
issued prior to the registration of the issuance thereof and agrees to advise
the Company in writing in the event of any change in any of the foregoing.
(d) The Consultant agrees, (i) as a condition precedent to the Company's
obligations under Section 4 hereof, to cooperate with the Company as requested
by the Company in
4
connection with the preparation and filing of a Registration Statement on Form
S-8 covering the issuance of the Shares and to execute such documents in
connection with such registration as the Company may reasonably request, and
(ii) to cooperate with the Company as requested by the Company in connection
with the issuance or and any subsequent transfer of the Shares and to execute
such documents in connection thereto as the Company may reasonably request.
(e) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ is the sole beneficial owner of the Consultant.
7. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Consultant:
(a) it is a corporation duly organized validly existing and in good
standing under the laws of the state of its incorporation and it has qualified
to do business as a foreign corporation in the jurisdictions, if any, outside of
such state, in which it does business and is required to so qualify;
(b) it has full corporate power and authority to execute and deliver this
Agreement and to perform the duties and responsibilities contemplated hereby;
(c) the execution, delivery and performance of this Agreement has been duly
authorized by its Board of Directors and no other corporate approvals are
necessary;
(d) that neither the execution of this Agreement nor performance hereunder
will (i) violate, conflict with or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under the terms, conditions or provisions of its
Articles of Incorporation or By-Laws or any contract, agreement or other
instrument or obligation to which it is a party, or by which it may be bound, or
(ii) violate any order, judgment, writ, injunction or decree applicable to it.
(e) the Shares issued to the Consultant pursuant to Section 3 hereof shall,
upon issuance, shall be duly authorized, validly issued, fully paid and
non-assessable Common Shares of the Company.
8. Arbitration.
(a) Any claim, dispute or controversy arising out of or in connection with
this Agreement shall be settled by arbitration in Suffolk County, New York or
San Diego, California in accordance with the governing rules of the American
Arbitration Association. Judgment upon the award rendered may be entered in any
court of competent jurisdiction.
(b) Each party shall pay its own expenses of arbitration, and the expenses
of the arbitrators and the arbitration proceeding shall be equally shared;
provided, however, that, if, in the opinion the arbitrator(s), any claim or
defense was unreasonable, the arbitrators may assess, as part of their award,
all or any part of the arbitration expenses of the other party (including
reasonable
5
attorneys' fees) and of the arbitrators and the arbitration proceeding against
the party raising such unreasonable claim or defense.
9. Assignment. This Agreement shall not be assigned by the Company or the
Consultant without the prior written consent of the other, except that the
Consultant may assign this Agreement to an entity which is wholly beneficially
owned by the Consultant.
10. Notices. Any notice required or permitted to be given pursuant to this
Agreement shall be deemed to have been duly given when delivered by hand or sent
by certified or registered mail, return receipt requested and postage prepaid,
overnight mail or telecopier as follows:
If to the Company: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
If to the Consultant: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or at such other address as any party shall designate by notice to the other
party given in accordance with this Paragraph 10.
11. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California applicable to
agreements made and to be performed entirely in California.
12. Waiver of Breach; Partial Invalidity. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach. If any provision, or part thereof, of this
Agreement shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and not in any way affect
or render invalid or unenforceable any other provisions of this Agreement, and
this Agreement shall be carried out as if such invalid or unenforceable
provision, or part thereof, had been reformed, and any court of competent
jurisdiction or arbiters, as the case may be, are authorized to so reform such
invalid or unenforceable provision, or part thereof, so that it would be valid,
legal and enforceable to the fullest extent permitted by applicable law.
6
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and there are no representations, warranties or commitments
except as set forth herein. This Agreement supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral, of the
parties hereto relating to the transactions contemplated by this Agreement. This
Agreement may be amended only by a writing executed by the parties hereto.
14. Representation by Counsel; Interpretation. Each party acknowledges that
it has been represented by counsel, or has been afforded the opportunity to be
represented by counsel, in connection with this Agreement. Accordingly, any rule
or law or any legal decision that would require the interpretation of any
claimed ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived by the parties. The provisions of this
Agreement shall be interpreted in a reasonable manner to give effect to the
intent of the parties hereto.
Remainder of page intentionally left blank. Signature page follows.
7
IN WITNESS WHEREOF, the Consultant and the Company have executed or have
caused to be duly executed, this Agreement as of the day and year above written.
EDISON RENEWABLES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: President
CJM GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
8