EXHIBIT 99.6
CONSULTING AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of this 3rd day
of April, 2001, by and between Genesis Financial Group,
L.L.C., a Delaware limited liability company with principal offices at
0000 Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the
"Consultant") and Entertainment Technologies and Programs, Inc., a Delaware
corporation with its principal offices at 00000 Xxxxx
Xxxxxx Xxxx.; Xxxxx 000; Xxxxxxx, Xxxxx 00000 (collectively hereinafter referred
to as the "Corporation").
WHEREAS, the Consultant has developed expertise in providing strategic
business advice and consulting services; and
WHEREAS, the Corporation desires to engage the services of the
Consultant and the Consultant desires to provide services to
the Corporation as set forth below, upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for such
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Engagement. Effective upon execution hereof, the Corporation
hereby engages the Consultant to render to it assistance in
the preparation of certain sections of the SB-2 Registration Statement (the
"Registration Statement") for the Corporation pursuant to
its proposed financing in the amount of $900,000 from N.I.R. Group, LLC or
other similar financing sources, as well as preparation of
responses to comments on the Registration Statement which may be received by
the Corporation from the United States Securities and
Exchange Commission (the "SEC") (the "Project"). This Agreement shall
remain in effect for a period of the earlier of six months
from the date hereof or the approval of said Registration Statement by
the SEC (the "Term"). The Term hereof may be extended or
renewed upon the written agreement of the Corporation and the Consultant
prior to expiration of the Term hereof upon such terms as
the parties hereto may negotiate at the time of such extension or renewal.
By executing this Agreement, the Corporation acknowledges that it has
been sufficiently informed that certain parts of the
Registration Statement require certain legal expertise in order to
conform to state and federal securities regulations and the
Corporation understands that the Consultant does not posses such legal
expertise; and, therefore, the Corporation will also be
required to utilize the services of competent legal counsel in the preparation
and submission of the Registration Statement. Any fees
incurred by such legal counsel are not in any way to be construed as being
included in or are a part of the compensation due the
Consultant as outlined herein this Agreement and are the separate and sole
responsibility of the Corporation.
2. Services. For the Term of this Agreement, the Consultant shall
render to the Corporation management consulting advice in
the areas of strategic planning, business strategy, administration and such
other related management services as shall reasonably be
requested by the board of directors of the Corporation in connection
with the Project. Notwithstanding the foregoing, yet
understanding that time is of the essence in the completion of the Project,
the Consultant shall not be required to devote more than
twenty hours per week to the performance of services hereunder.
3. Compensation. In consideration for the performance of the services
described above, the Corporation shall pay to the
Consultant, Seven Thousand Five Hundred Dollars ($7,500) in cash upon execution
of this Agreement; provided, however, at the option
of the Corporation, such cash consideration may be paid out of the proceeds
of the next financing made by the Corporation. In
addition to any cash consideration due and payable under the terms of this
Agreement, within 10 business days from the date of
execution of this Agreement, the Corporation shall issue to the Consultant
a certificate, or certificates, representing in the
aggregate Sixty-Five Thousand Two Hundred Seventeen (65,217) shares of
common stock of the Corporation (the "Stock"), which the
Corporation shall be required to register for sale in the open markets
pursuant to Form S-8 within 30 days from the date of
issuance. The Stock shall be issuable in the name(s) of and in such amount(s)
as requested by the Consultant
4. Out-of-Pocket Expenses. The Corporation shall reimburse Consultant
for its travel and other out-of-pocket expenses incurred
in connection with this Agreement, and such reimbursement shall be in
addition to any other fees payable hereunder. The Consultant
will submit to the Corporation for pre-approval of all out-of-pocket expenses
greater than $250. Out-of-pocket expenses less than
$250 will not require pre-approval by the Corporation. All invoices shall
be paid in cash and are due and payable upon receipt of
monthly invoices from Consultant
5. Confidential Information. By reason of performance under this
Agreement, the Consultant may have access to and may obtain
specialized knowledge, trade secrets and confidential information about
the business and operation of the Corporation, its
subsidiaries and divisions thereof. Therefore, the Consultant hereby
agrees that he shall keep secret and retain in confidence and
shall not use, disclose to others, or publish, other than in connection with
the performance of services hereunder and in accordance
herewith, any information relating to the business, operation or other
affairs of the Corporation, its subsidiaries and divisions
thereof, which information is acquired in the course of providing services
for the Corporation. To the extent that any of such
information may be deemed from time to time to be "material non-public
information" as construed under the Exchange Act of 1934, the
Consultant hereby agrees not to purchase or sell (or offer to purchase
or sell) any of the Corporation's securities while in
possession of information which may be so deemed to be "material non-public
information" prior to termination of this engagement
without prior approval of legal counsel. Notwithstanding the foregoing,
the Corporation is entitled to sell the shares of common
stock of the Corporation resulting from the exercise of the Warrant as outlined
in paragraph 3 hereof.
6. Indemnification. The Consultant and the Corporation hereby agree as
follows:
(a) the Corporation will indemnify and hold harmless the Consultant
against and in respect of all damages, claims, losses and
expenses (including, without limitation, attorneys' fees and
disbursements) reasonably incurred (all such amounts may hereinafter
be referred to as the "Damages") by the Consultant arising out of: (i)
any misrepresentation or breach of any warranty made by
the Corporation pursuant to the provisions of this Agreement or in any
statement, certificate or other document furnished by the
Corporation pursuant to this Agreement, and (ii) the nonperformance or
breach of any covenant, agreement or obligation of the
Corporation contained in this Agreement which has not been waived by the
Consultant;
(b) the Corporation will be obligated to indemnify and hold harmless
the Consultant with respect to claims for Damages as to
which the Consultant shall have given written notice to the
Corporation on or before the close of business on the sixtieth day
following the expiration of the Term hereof;
(c) in any case where the Corporation has indemnified the Consultant
for any Damages and the Consultant recovers from third
parties all or any part of the amount so indemnified by the
Corporation, the Consultant shall promptly pay over to the
Corporation the amount so recovered;
(d) with respect to claims or demands by third parties, whenever the
Consultant shall have received notice that such a claim or
demand has been asserted or threatened which, if valid, would be subject
to indemnification hereunder, the Consultant shall as
soon as reasonably possible and in any event within thirty (30) days of
receipt of such notice, notify the Corporation of such
claim or demand and of all relevant facts within its knowledge which
relate thereto. The Corporation shall then have the right
at its own expense to undertake the defense of any such claims or
demands utilizing counsel selected by the Corporation and
approved by the Consultant, which approval shall not be unreasonably
withheld. In the event that the Corporation should fail to
give notice of the intention to undertake the defense of any such claim or
demand within thirty (30) days after receiving notice
that it has been asserted or threatened, the Consultant shall have
the right to satisfy and discharge the same by payment,
compromise or otherwise and shall give written notice of any such payment,
compromise or settlement to the Corporation;
(e) the Consultant will indemnify and hold harmless the Corporation
against and in respect of all Damages reasonably incurred by
the Corporation arising out of: (i) any misrepresentation or breach of
any warranty made by the Consultant pursuant to the
provisions of this Agreement, and (ii) the nonperformance or breach of
any covenant, agreement or obligation of the Consultant
which has not been waived by the Corporation;
(f) the Consultant will be obligated to indemnify the Corporation
for Damages as to which the Corporation shall have given
written notice to the Consultant on or before the close of business on the
sixtieth day following the second anniversary hereof;
(g) in any case where the Consultant has indemnified the Corporation
for any Damages and the Corporation recovers from third
parties all or any part of the amount so indemnified by the Consultant,
the Corporation shall promptly pay over to the Consultant
the amount so recovered; and
(h) with respect to claims or demands by third parties, whenever the
Corporation shall have received notice that such a claim or
demand has been asserted or threatened, which, if valid, would be subject
to indemnification hereunder, the Corporation shall as
soon as reasonably possible and in any event within thirty (30) days of
receipt of such notice, notify the Consultant of such
claim or demand and of all relevant facts within its knowledge which
relate thereto. The Consultant shall have the right at its
expense to undertake the defense of any such claim or demand utilizing
counsel selected by the Consultant and approved by the
Corporation, which approval shall not be unreasonably withheld. In the
event that the Consultant should fail to give notice of
its intention to undertake the defense of any such claim or demand
within thirty (30) days after receiving notice that it has
been asserted or threatened, the Corporation shall have the right to
satisfy and discharge the same by payment, compromise or
otherwise and shall give written notice of any such payment, compromise or
settlement to the Consultant.
7. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without
regard to the principles of conflicts of laws thereof and shall inure to
the benefit of and be binding upon the Consultant and the
Corporation and their respective legal successors and assigns.
8. Arbitration. The Corporation represents, warrants, covenants and
agrees that any controversy or claim brought in any
capacity by the Corporation against the Consultant or any members, officers,
directors, agents, affiliates, associates, employees or
controlling persons of the Consultant shall be settled by expedited
arbitration under the Federal Arbitration Act in accordance with
the commercial arbitration rules of the American Arbitration Association
("AAA") and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. Any
controversy or claim brought by the Consultant against the
Corporation or its securityholders, officers, directors, agents, affiliates,
associates, employees or controlling persons shall be
settled by arbitration under the Federal Arbitration Act in accordance with
the commercial arbitration rules of the AAA and judgment
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. In arbitration proceedings under this section,
the parties shall be entitled to any and all remedies that would be available
in the absence of this section and the arbitrators, in
rendering their decision, shall follow the substantive laws of the State of
Delaware. The arbitration of any dispute pursuant to
this paragraph shall be held in the State of Texas, County of Xxxxxx.
Notwithstanding the foregoing, in order to preserve the status quo
pending the resolution by arbitration of a claim seeking
relief of an injunctive or equitable nature, any party, upon submitting a
matter to arbitration as required by this section, may
simultaneously or thereafter seek a temporary restraining order or
preliminary injunction from a court of competent jurisdiction
pending the outcome of the arbitration. This section is intended to benefit
the members, managers, agents, affiliates, associates
and employees of the Consultant, each of whom shall be deemed to be a third
party beneficiary of this section, and each of whom may
enforce this section to the full extent that the Consultant could do so if a
controversy or claim were brought against it.
9. No Continuing Waiver. The waiver by any party of any provision
or breach of this Agreement shall not operate as or be
construed to be a waiver of any other provision hereof or of any other breach
of any provision hereof.
10. Notice. Any and all notices from either party to the other which
may be specified by, or otherwise deemed necessary or
incident to this Agreement shall, in the absence of hand delivery with return
receipt requested, be deemed duly given when mailed if
the same shall be sent to the address of the party set out on the first page
of this Agreement by registered or certified mail,
return receipt requested, or express delivery (e.g., Federal Express).
11. Severability of Provisions. The provisions of this Agreement
shall be considered severable in the event that any of such
provisions are held by a court of competent jurisdiction to be invalid,
void or otherwise unenforceable. Such invalid, void or
otherwise unenforceable provisions shall be automatically replaced by other
provisions which are valid and enforceable and which are
as similar as possible in term and intent to those provisions deemed to be
invalid, void or otherwise unenforceable. Notwithstanding
the foregoing, the remaining provisions hereof shall remain enforceable to the
fullest extent permitted by law.
12. Assignability. This Agreement shall not be assignable without the
prior written consent of the non-assigning party or
parties hereto and shall be binding upon and inure to the benefit of any heirs,
executors, legal representatives or successors or
permitted assigns of the parties hereto.
13. Entire Agreement; Amendment. This Agreement contains the entire
agreement among the Corporation and the Consultant with
respect to the subject matter hereof. This Agreement may not be amended,
changed, modified or discharged, nor may any provision
hereof be waived, except by an instrument in writing executed by or on behalf
of the party against whom enforcement of any amendment,
waiver, change, modification or discharge is sought. No course of
conduct or dealing shall be construed to modify, amend or
otherwise affect any of the provisions hereof.
14. Headings. The paragraph headings contained in this Agreement are
for reference purposes only and shall not in any way
affect the meaning or interpretation of the provisions of this Agreement.
15. Survival. Sections 3, 4, 5, 6, 7, 8, 9 and 11 of this Agreement
shall survive the termination of this Agreement for any
reason (whether such termination is by the Corporation, upon the expiration of
this Agreement, by its terms or otherwise).
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as
set forth below and have caused their respective corporate seals to be hereunder
affixed as of the date first above written.
GENESIS FINANCIAL GROUP, L.L.C.
By: /s/ Xxxxx X. Xxxxx
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Managing Member
AGREED TO AND ACCEPTED THIS
3RD DAY OF APRIL 2001.
ENTERTAINMENT TECHNOLOGIES
and PROGRAMS, INC.
By: /s/Xxxxx X. Xxxxxxx
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Its: Chairman/CEO
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