Exhibit 6(iv)
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ( "Agreement") is made effective this 19th
day of March 1999, by and between ▇▇▇▇▇▇ Consulting Group, Inc., a Nevada
corporation ("Consultant") and Genesis Capital Corporation of Nevada, a Nevada
corporation (the "Company").
WHEREAS, Consultant and Consultant's personnel are in the business of
assisting development stage companies through locating, evaluating, and
effecting mergers and acquisitions;
WHEREAS, Consultant also provides general financial advice to corporate
management and performs general administrative duties for publicly-held
companies; and
WHEREAS, the Company desires to retain Consultant to advise and assist
it, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Consultant agree as follows:
1. Engagement
The Company hereby retains Consultant, effective the date hereof and
continuing until termination, as provided herein, to (1) assist the
Company in locating evaluating, and effecting a merger and/or
acquisition; (2) provide general financial advice to corporate
management; (3) provide general administrative duties and (4) assist in
the acquisition of various assets (collectively termed the "Services").
The Services are to be provided on a "best efforts" basis directly and
through Consultant's employees or others employed or retained and under
the direction of Consultant ("Consultant's Personnel"); provided,
however, that the Services are expressly agreed to exclude all legal
advice, accounting services or other services which require licenses or
certification.
2. Term
This Agreement shall have an initial term of one (1) year (the "Primary
Term"), with an effective date retroactive to the date services were
first performed by Consultant, which was on or about September 1, 1998,
and may be renewed at the Company's option by written notice of
renewal.
3. Time and Effort of Consultant
Consultant shall allocate time and Consultant's personnel as it deems
necessary to provide the Services. The particular amount of time may
vary from day to day or week to week. Consultant has provided a
statement identifying, in general, the tasks it has performed from
September 1, 1998 to March 19, 1999. The Company has reviewed this
statement and believes the time and effort expended by Consultant to be
reasonable for the tasks it has completed. Consultant will continue to
provide billing statements on a monthly basis or within (7) days of the
Company's request. These billing
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statements shall be conclusive evidence that the Services have been
performed. Additionally, in the absence of willful misfeasance, bad
faith, or reckless disregard for the obligations or duties hereunder by
Consultant, neither Consultant nor Consultant's personnel shall be
liable to the Company or any of its shareholders for any act or
omission in the course of or connected with rendering the Services,
including but not limited to losses that may be sustained in any
corporate act in any subsequent Asset Opportunity or Business
Opportunity (as defined herein) undertaken by the Company as a result
of advice provided by Consultant or Consultant's personnel.
4. Compensation
The Company agrees to pay Consultant a fee for the Services it has
provided from September 1, 1998 to March 19, 1999 (the "Initial Fee")
in the following manner: by issuing Four Hundred Fifty-Five Thousand
(455,000) shares of the Company's common stock issued pursuant to Rule
504 of Regulation D of the Securities Act of 1933 (the "'33 Act").
5. Compensation for Other Services
If the Company after the date hereof enters into a merger or
acquisition, or enters into an agreement for the purchase of assets, as
a direct or indirect result of Consultant's efforts, the Company agrees
to pay Consultant a fee in the manner described below.
If Consultant provides any material assistance to the Company in a
merger, acquisition or asset purchase of an entity ("Business
Opportunity"), which assistance includes (but is not limited to)
introducing the Business Opportunity to the Company or helping to
prepare documents used in negotiating such Business Opportunity,
Consultant shall be paid the following amounts ("M&A Fee"): $33,000 in
cash; and a promissory note in the amount of $67,000 (attached as
Exhibit "A"), secured by Six Hundred Seventy Thousand (670,000) shares
of the Company's common stock issued pursuant to Rule 504 of Regulation
D of the '33 Act. The $33,000 in cash, the $67,000 promissory note, and
the Six Hundred Seventy Thousand (670,000) shares securing such
promissory note shall be delivered to Consultant on the date the
Company signs a Merger, Acquisition or Asset Purchase Agreement. For
purposes of determining Consultant's M&A Fee, the Company's shares
shall be valued at $.10 per share.
If the Company acquires any asset or obtains any payment or other
benefit, other than a Business Opportunity described above, as a result
of Consultant's Services (an "Asset Opportunity"), the Company agrees
to pay Consultant 10% of the gross value of such Asset Opportunity. The
Company will pay Consultant in cash, shares of the Company or in like
kind for each Asset Opportunity the Company acquires as a result of
Consultant's efforts ("Consultant's Fee"). Such payment shall be made
on the date the Company substantially completes the transaction
involved with such Asset Opportunity.
The Initial Fee, Consultant's Fee, M&A Fee and any other shares issued
pursuant to this Agreement are in addition to any preferred shares paid
to Consultant for services rendered.
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6. Registration of Shares
Consultant agrees to accept the above-described shares as compensation,
based on exemptions from registration provided by Section 4(2) of the
'33 Act, Regulation D of the '33 Act, and applicable state securities
laws. The Company shall have no obligation to register Consultant's
shares.
7. Costs and Expenses
All third-party and out-of-pocket expenses incurred by Consultant in
the performance of the Services shall be paid by the Company, or shall
be reimbursed if paid by Consultant on behalf of the Company, within
ten (10) days of receipt of written notice by Consultant, provided that
the Company must approve in advance all such expenses in excess of $500
per month.
8. Place of Services
The Services provided by Consultant or Consultant's Personnel will be
performed at Consultant's offices except as otherwise mutually agreed
in writing by Consultant and the Company.
9. Independent Contractor
Consultant and Consultant's Personnel will act as independent
contractors in the performance of any duties under this Agreement.
Accordingly, Consultant will be responsible for paying all federal,
state, and local taxes on compensation paid under this Agreement,
including income and social security taxes, unemployment insurance, and
any other taxes due relative to Consultant's Personnel, and any and all
business license fees as may be required. This Agreement neither
expressly nor impliedly creates a relationship of principal and agent,
or employer and employee, between the Company and Consultant's
Personnel. Neither Consultant nor Consultant's Personnel are authorized
to enter into any agreements on behalf of the Company. The Company
expressly retains the right to approve, in its sole discretion, each
Asset Opportunity or Business Opportunity introduced by Consultant, and
to make all final decisions with respect to all transactions on any
Asset Opportunity or Business Opportunity.
10. Rejected Asset Opportunity or Business Opportunity
If, during the term of this Agreement, the Company makes a written
election not to proceed to acquire, participate or invest in any Asset
Opportunity or Business Opportunity identified and/or selected by
Consultant, notwithstanding the time and expense the Company may have
incurred reviewing such transaction, such Asset Opportunity or Business
Opportunity shall re-vest back to and become proprietary to Consultant.
Consultant shall be entitled to acquire or broker the sale or
investment in such rejected Asset Opportunity or Business Opportunity
for its own account, or submit such Asset Opportunity or Business
Opportunity elsewhere. In such event, Consultant shall be entitled to
any and all profits or fees resulting from Consultant's purchase,
referral or placement of any such rejected Asset Opportunity or
Business Opportunity, or from the Company's subsequent purchase or
financing with such Asset Opportunity or Business Opportunity in
circumvention of Consultant's reasonable expectation to be paid.
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11. No Agency Express or Implied
This Agreement creates neither a principal-agent nor an
employer-employee relationship, either express or implied, between the
Company and either Consultant or Consultant's Personnel.
12. Termination
The Company and Consultant may terminate this Agreement before the
Primary Term expires, on thirty (30) days written notice, with mutual
written consent. Absent mutual consent, and without prejudice to any
other remedy to which the terminating party may be entitled, either
party may terminate this Agreement with thirty (30) days written notice
under the following conditions:
(A) By the Company.
(i) If during the Primary Term of this Agreement, Consultant is unable
to provide the Services as set forth herein for thirty (30) consecutive
business days because of illness, accident, or other incapacity of
Consultant's personnel; or,
(ii) If Consultant willfully breaches or grossly neglects the duties
required to be performed hereunder; or,
(B) By Consultant.
(i) If the Company breaches this Agreement or fails to make any payment
or provide any information required hereunder; or
(ii) If the Company ceases business or, other than in a merger arranged
by Consultant, sells a controlling interest to a third party, or agrees
to a consolidation or merger of itself with or into another
corporation, or enters into such a transaction outside of the scope of
this Agreement, or sells substantially all of its assets to another
corporation, entity or individual outside the scope of this Agreement;
or
(iii) If the Company has a receiver appointed for its business or
assets, or otherwise becomes insolvent or unable to timely satisfy its
obligations in the ordinary course of business, including but not
limited to the obligation to pay the Initial Fee, the M&A Fee, or the
Consultant's Fee; or
(iv) If the Company institutes or has instituted against it any
bankruptcy proceeding, files a petition in a court of bankruptcy, is
adjudicated a bankrupt, or makes a general assignment for the benefit
of creditors; or
(v) If any disclosure made by the Company, either herein or subsequent
hereto, is materially false or misleading.
If Consultant terminates this Agreement without relying on one of the
conditions listed in B(i) through (v) above, or if this Agreement is
terminated by mutual written agreement before the Primary Term expires,
or if the Company terminates this Agreement for the reasons set forth
in A(i) and (ii) above, the Company shall only pay Consultant for
unreimbursed expenses and for any M&A Fee and/or
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Consultant's Fee accrued up to and including the effective date of
termination. If this Agreement is terminated by the Company for any
other reason, or by Consultant for the reasons set forth in B(i)
through (v) above, the Company shall pay Consultant for unreimbursed
expenses, for any M&A Fee accrued up to and including the effective
date of termination, and for the balance of the Consultant's Fee for
the remainder of the unexpired term of this Agreement.
13. Indemnification
Subject to the provisions herein, the Company and Consultant agree to
indemnify and defend each other, and hold each other harmless, from and
against all demands, claims, actions, losses, damages, liabilities,
costs and expenses, including without limitation interest, penalties,
attorneys' fees and expenses, asserted against, imposed on, or incurred
by either party by reason of or resulting from any action of, or the
breach of any representation, warranty, covenant, condition, or
agreement of, the other party to this Agreement.
14. Remedies
Consultant and the Company acknowledge that in the event of a breach of
this Agreement by either party, money damages would be inadequate, and
the non-breaching party would have no adequate remedy at law.
Accordingly, in the event of any controversy concerning the rights or
obligations under this Agreement, such rights or obligations shall be
enforceable in a court of equity by a decree of specific performance.
Such remedy, however, shall be cumulative and non-exclusive and shall
be in addition to any other remedy to which the parties may be
entitled.
15. Miscellaneous
(A) Subsequent Events. Consultant and the Company each agree to notify
the other party if, subsequent to the date of this Agreement, either
party incurs obligations which could compromise its efforts and
obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by the
parties hereto.
(C) Further Actions and Assurances. At any time and from time to time,
each party agrees, at its or their expense, to take actions and to
execute and deliver documents as may be reasonably necessary to
effectuate the purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with
any of its obligations, agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed. The
failure of any party to this Agreement to enforce at any time any of
the provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
(E) Assignment. Neither this Agreement nor any right created by it
shall be assignable by either party without the prior written consent
of the other.
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(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, when deposited with a public
telegraph company for transmittal, or when sent by facsimile
transmission, provided that the communication is addressed:
(i) In the case of the Company:
Genesis Capital Corporation of Nevada
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) In the case of Consultant:
▇▇▇▇▇▇ Consulting Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address designated in writing by the Company
or Consultant to receive notice.
(G) Headings. The headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) Governing Law. The parties agree that this Agreement was negotiated
in, and the place of performance is in, and the place of contracting is
in, the United States of America, State of Utah. Accordingly, this
Agreement shall be governed by the laws of the State of Utah, and of
the United States of America, notwithstanding any conflict-of-law
provision to the contrary. The parties further agree that any action
brought to interpret or enforce any provision of this Agreement shall
be brought exclusively in a court of competent jurisdiction within Salt
Lake County, State of Utah. The parties mutually agree to waive the
operation of any court ruling, statute, or other provision which would
allow or require an action to be brought in any other jurisdiction or
to be governed by any other law than as agreed to herein. The parties
make this waiver with full understanding of its effect.
(I) Binding Effect. This Agreement shall be binding on the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
(J) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements, or understandings between the parties relating to the
subject matter of this Agreement. No oral understandings, statements,
promises, or inducements contrary to the terms of this Agreement exist.
No representations, warranties, covenants, or conditions, express or
implied, other than as set forth herein, have been made by any party.
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(K) Severability. If any part of this Agreement is deemed to be void,
illegal, or unenforceable, the balance of the Agreement shall remain in
full force and effect.
(L) Counterparts. A facsimile, telecopy, or other reproduction of this
Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, by one or more parties
hereto, and such executed copy may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen. In this event,
such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
(M) Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
"Consultant"
▇▇▇▇▇▇ Consulting Group, Inc.
a Nevada corporation
By: /s/
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
The "Company"
Genesis Capital Corporation of Nevada
a Nevada corporation
By: /s/
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
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Exhibit A
"Promissory Note"
Recourse
$67,000 Dated: March 19, 1999
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, Genesis Capital Corporation of Nevada ("Maker")
promises to pay to ▇▇▇▇▇▇ Consulting Group, Inc. ("Holder"), or to order, the
principal sum of Sixty-Seven Thousand dollars ($67,000).
1. Payments. The principal amount shall be paid in full WITHIN THREE (3) DAYS of
the written demand of Holder upon the Maker, but in any event the principal
amount shall be paid in full no later than June 1, 1999.
2. Interest. The obligation shall bear simple interest at the rate of 12% per
annum, commencing on the date this Note is made, and shall be paid in full on
the date(s) of payment identified in Paragraph 1, above, provided, however, that
the obligation shall bear interest at the rate of 24% per annum on the
occurrence of a default as set forth in Section 5 below.
3. Type and Place of Payments. Payments of principal and interest shall be made
in lawful money of the United States of America to the above-named Holder at ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or to order.
4. Prepayment. Advance payment or payments may be made on the principal, without
penalty or forfeiture. There shall be no penalty for any prepayment.
5. Default. Upon the occurrence or during the continuance of any one or more of
the events listed below, Holder or the holder of this Note may forthwith or at
any time thereafter during the continuance of any such event, by notice in
writing to the Maker, declare the unpaid balance of the principal of this Note
to be immediately due and payable, and the principal shall become and shall be
immediately due and payable without presentation, demand, protest, notice of
protest, or other notice of dishonor, all of which are hereby expressly waived
by Maker, with full knowledge of the effect of such waiver. The events deemed as
defaults shall include without limitation the following:
(a) Maker's failure to pay the principal and interest of this Note or
any portion thereof when the same shall become due and payable (whether
at maturity as herein expressed, by acceleration, or otherwise) unless
cured within five (5) days after Holder or the holder of this Note
delivers to Maker written notice of default;
(b) Maker's filing a voluntary petition in bankruptcy; or filing a
voluntary petition seeking reorganization; or filing an answer
admitting the jurisdiction of the court and any material allegations of
an involuntary petition filed pursuant to any act of Congress relating
to bankruptcy or to any act purporting to be amendatory thereof; or
making an assignment for the benefit of its creditors; or applying for
or consenting to the appointment of any receiver or trustee for Maker
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or all or any substantial portion of its property; or assigning an
agent to liquidate any substantial part of Maker's assets;
(c) The entry of (i) any court order pursuant to any act of Congress
(or amendment thereof) relating to Maker's bankruptcy or
reorganization; or (ii) any court order approving an involuntary
petition for the bankruptcy or reorganization of the Maker; or (iii)
any court order appointing any receiver or trustee of or for Maker or
for all or any substantial portion of the Maker's property; or (iv) any
writ or warrant of attachment or any similar process issued by any
court against all or any substantial portion of the Maker's property
(unless such court orders, writs, or warrants as identified in
subpoints (i) to (iv) of this paragraph are vacated or stayed or
released or bonded within 60 days after their entry).
6. Attorneys' Fees & Construction. If either party hereto seeks to enforce any
portion of this Note through litigation or arbitration, then the prevailing
party shall be entitled to recover reasonable attorney's fees, costs, and
interest at the maximum legal rate. The parties agree that the interpretation of
any provision in this Agreement shall be governed by the laws of the State of
Utah. The parties further acknowledge that the terms of this Note were
negotiated with the Holder in the State of Utah, that the place of contracting
was in the State of Utah, and that the place for performing this note is in the
State of Utah. Accordingly, the parties irrevocably consent to the jurisdiction
of the United States District Court for the District of Utah and agree to bring
any action solely in that Court. The parties expressly waive the operation of
any court ruling, statute, or other provision that would allow or require suit
to be brought in any other jurisdiction, with full knowledge of the effect of
such waiver.
7. Security. This Note is secured by the pledge of Six Hundred Seventy Thousand
shares of the common stock of Genesis Capital Corporation of Nevada, issued
pursuant to Rule 504 of Regulation D under the Securities Act of 1933 and issued
in the name of the Holder. The shares shall be held by the Holder pursuant to
the Security Agreement between the Maker and the Holder dated March 19, 1999.
Any default, or any failure to make payment in full by the due date(s) described
herein, will result in the immediate and irrevocable delivery of the above
identified stock to the Holder.
By /s/
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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