Exhibit 6 (viii)
DEBT SETTLEMENT AGREEMENT
THIS DEBT SETTLEMENT AGREEMENT ("Agreement"), is hereby made effective
on June 11, 1999, by and between Xxxxxx Consulting Group, Inc., a Nevada
corporation, and Global Universal, Inc., a Nevada corporation (hereinafter
collectively referred to as "Consultants"); and Genesis Capital Corporation of
Nevada, a Nevada corporation; Motor Sports on Dirt, Inc., a Texas corporation;
Calbear Gas, LLC, a Texas limited liability company; and Xxxxxx X. Xxxxxx, an
individual resident of Arkansas (hereinafter collectively referred to as
"Debtors").
Recitals
WHEREAS, Genesis Capital Corporation of Nevada ("Genesis") incurred
certain debts by entering into Consulting Agreements with the Consultants
(attached as Exhibits A and B), which agreements were accompanied by Security
Agreements (attached as Exhibits C and D) and Secured Promissory Notes (attached
as Exhibits E and F), all of which agreements were executed by Genesis in favor
of the Consultants;
WHEREAS, Genesis incurred an additional debt by entering into a
Preferred Stock Buyback Agreement (attached as Exhibit G) with one of the
Consultants (Global Universal, Inc.);
WHEREAS, Motor Sports on Dirt, Inc. ("Motor Sports") entered into an
Acquisition Agreement with Genesis, which together with Addendum #1 to such
Acquisition Agreement required Motor Sports to pay all of the above-described
debts owed to Consultants;
WHEREAS, the above-described agreements allow for interest, attorneys
fees, and costs of suit--and applicable law may allow for additional
consequential damages--if the agreements were breached;
WHEREAS, the above-described debts were due and payable from Genesis as
of March 25, 1999; such debts were assumed by Motor Sports pursuant to the
Acquisition Agreement dated April 6, 1999; such debts have not been paid to
date; and Motor Sports is now technically in breach of the agreements creating
these debts, but is making attempts to remedy such breach;
WHEREAS, Consultants are willing to forgive all indebtedness, interest,
attorneys fees, and consequential damages arising from or connected with the
above-described agreements in exchange for two cash payments from Debtors, as
follows: one payment in the amount of $345,000 (allocable to all liability
arising from the two Consulting Agreements) and the second payment in the amount
of $255,000 (allocable to all liability arising from the Preferred Stock Buyback
Agreement), on the condition that Consultants receive such payment by wire
transfer or certified cashier's check before 5:00 p.m. MDT on June 15, 1999;
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WHEREAS, in the alternative, Consultants are willing to forgive all
indebtedness, interest, attorneys fees, and consequential damages arising from
or connected with the above-described agreements in exchange for the transfer of
Xxxxxx X. Xxxxxx'x 100% ownership interest (consisting of 1,000 member shares)
in Calbear Gas, LLC (Calbear), whose balance sheet has been warranted to consist
of zero (0) liabilities and the following single asset: the non- dilutable
ownership of Nine Million Ninety Five Thousand (9,095,000) shares of the common
stock of Caye Chapel, Inc. ("Caye");
WHEREAS, Caye has Forty Million Five Hundred Eighty One Thousand Eight
Hundred Thirty Three (40,581,833) shares of its common stock issued and
outstanding as of the date of this Agreement; has agreed that it will neither
dilute Calbear's shareholder interest in Caye nor effect any reverse split of
Caye's Common Stock until June 10, 2002 or until Calbear has fully liquidated
its position, whichever occurs sooner;
WHEREAS, Xxxxxx X. Xxxxxx is not a volunteer in settling the
above-described debts owed to the Consultants, but is the President of Motor
Sports and is intervening to settle such debts in order to effect the Closing of
the Acquisition Agreement between Motor Sports and Genesis in order to protect
his financial interest in Motor Sports, Genesis, and the merger/acquisition of
those two entities;
WHEREAS, Debtors are also willing to guarantee that the value of the
9,095,000 shares of Caye Common Stock owned by Calbear ("the Caye Stock") and
transferred to the Consultants will be at least $345,000 upon liquidation, and
are further willing to transfer additional shares of Caye Common Stock--or pay
other valuable consideration--sufficient to cover any deficiency if liquidation
of the Caye Stock fails to net at least $345,000 for Consultants.
Agreement
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements contained in this Agreement, and in reliance on the representations
and warranties set forth in this Agreement, and for other good and valuable
consideration, the sufficiency of which is hereby expressly acknowledged, the
parties agree as follows:
1. Purchase and Sale. Xxxxxx X. Xxxxxx ("Xxxxxx") hereby agrees to sell,
transfer, assign ----------------- and convey to Consultants, and Con-
sultants hereby agree to purchase and acquire from Xxxxxx, One Hundred
Percent (100%) of the total ownership (which consists of 1,000
membership shares) of Calbear. As an integral part of the purchase and
sale of Calbear, Xxxxxx and Calbear also hereby agree to sell, and Con-
sultants agree to purchase, the sole asset owned by Calbear, namely
Nine Million Ninety Five Thousand (9,095,000) shares of the common
stock of Caye Chapel, Inc. All parties agree that as a result of such
purchase and sale, Consultants will become the sole owners of Calbear,
and the sole owners of the Nine Million Ninety Five Thousand
(9,095,000)shares of Caye Chapel, Inc. described in this Agreement.
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2. Purchase Price and Settlement of Debt. The aggregate purchase price to be
paid by the ------------------------------------- Consultants for the 100%
ownership of Calbear and of the 9,095,000 shares of Caye Chapel, Inc. shall
be the cancellation of SIX HUNDRED THOUSAND dollars ($600,000) in unpaid
debt and unpaid claims for interest, attorney fees, and possible
consequential damages arising from or connected with the unpaid Consulting
Agreements, Security Agreements, Secured Promissory Notes, and Preferred
Stock Buyback Agreement attached as Exhibits A-- G to this Agreement. Each
of the Debtors hereby agree to the terms of this Agreement.
3. Guarantee of Minimum Value of Caye Stock. Calbear and Xxxxxx hereby
guarantee that the value of the 9,095,000 shares of Caye Stock described in
this Agreement will be worth at least $345,000 upon liquidation, and
Calbear and Xxxxxx hereby agree, covenant and promise to transfer
additional shares of Caye common stock--or pay other valuable
consideration--sufficient to cover any deficiency if liquidation of the
Caye Stock fails to net at least $345,000 upon liquidation.
4. Transfer of Shares in Genesis Capital Corporation of Nevada. Genesis, Motor
Sports, ----------------------------------------------------------- Xxxxxx,
Calbear, Xxxxxx and Global all agree that the transfer of Eleven Million
Seven Hundred Ninety Thousand shares of Genesis common stock contemplated
in the Acquisition Agreement and Addendum #1 thereto shall be completed
from Genesis to Motor Sports on the following conditions: the Consultants
succeed in liquidating enough of the Caye Chapel stock to satisfy the
$600,000 in unpaid debts and claims the Consultants have (as described in
this Agreement), and all other relevant conditions in the Acquisition
Agreement and Addendum #1 are met.
5. Representations and Warranties of Xxxxxx and Calbear. In order to induce
Consultants to enter into this Agreement and to complete the transaction
contemplated hereby, Xxxxxx and Calbear represent and warrant that each of
the following are true and complete statements of material fact as of the
date of this Agreement and the Closing Date:
A. Entity Existence. Calbear Gas, LLC is a limited liability company
duly organized, validly existing, and in good standing under the laws
of the state of its formation, with full authority to own, lease and
operate property and to carry on business as it is now being conducted.
Calbear is duly qualified to do business in--and is in good standing
in-- every jurisdiction where such qualification is necessary to carry
out the terms of this Agreement.
X. Xxxxxx'x Ownership of Calbear. Xxxxxx is the sole owner of Calbear,
such ownership being represented by 1,000 member shares in Calbear, all
of which are shares are owned by Xxxxxx, free and clear of all liens,
encumbrances and restrictions of any nature whatsoever, except that
such shares have not been registered under the 1933 Securities Act, as
amended, or any applicable state securities laws.
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C. Calbear's Assets and Liabilities. Calbear has zero (0) liabilities,
and its sole asset is the ownership of Nine Million Ninety Five
Thousand (9,095,000) shares of the common stock of Caye Chapel, Inc.,
which Calbear holds free and clear of all liens, encumbrances and
restrictions of any nature whatsoever, except that such shares have not
been registered under the 1933 Securities Act, as amended, or any
applicable state securities laws. The Caye Stock is all validly issued,
fully paid and non-assessable, with full voting rights, dividend
rights, and the rights to receive the proceeds of liquidation, if any,
as set forth in Caye's Articles of Incorporation and Bylaws.
D. Caye's Capitalization. As of the date of this Agreement, Caye's
entire authorized equity capital consists of Fifty Million (50,000,000)
shares of $.001 par value common stock, of which Forty Million Five
Hundred Eighty One Thousand Eight Hundred Thirty Three (40,581,833)
shares are currently issued and outstanding. There will be no other
voting or equity securities authorized or issued, nor any authorized or
issued securities convertible into voting stock, and no outstanding
subscriptions, warrants, calls, options, rights, commitments or other
agreements calling for the issuance of any additional shares of Caye's
common stock or of any other voting or equity security.
E. No Misleading Statements or Omissions. Neither this Agreement nor
any document attached to this Agreement or presented to the Consultants
in connection herewith contain or will contain any materially
misleading statement, nor do they omit to make any statement of fact
necessary to make the other statements or facts set forth herein not
materially misleading.
X. Xxxxxx'x and Calbear's Authority for Agreement. Xxxxxx and Calbear
have duly authorized the execution and delivery of this Agreement and
the consummation of the transactions contemplated herein. Xxxxxx and
Calbear have each duly executed and delivered this Agreement; it
constitutes the valid and legally binding obligation of both Xxxxxx and
Calbear, enforceable according to its terms. To the best knowledge of
Xxxxxx and Calbear, after due inquiry, the execution and delivery of
this Agreement and the consummation of the transactions contemplated
herein will not conflict with any mortgage, indenture, lease, contract,
commitment, agreement, or other instrument applicable to either Xxxxxx
or Calbear or any of its properties or assets.
G. Consents and Authorizations. Any consent, approval, order or
authorization of, or registration, declaration, compliance with or
filing with any governmental or regulatory authority required of the
Debtors in connection with the execution and delivery of this Agreement
to permit the consummation of the transactions contemplated herein
shall be accomplished by the Debtors in a timely manner and in
accordance with federal and/or state law.
H. Assurances of Anti-Dilution and Lifting Restrictions on Stock.
Calbear and Xxxxxx have received contractual assurances from Caye
Chapel, Inc. to the effect that (i) Caye
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will neither dilute Calbear's shareholder interest in Caye nor effect
any reverse split of Caye's Common Stock until June 10, 2002 or until
Calbear has fully liquidated its position, whichever occurs sooner;
(ii) Caye will exert its best efforts to make available, as soon as
reasonably possible and in no event more than 10 days from the date of
this Agreement, "current public information" on itself sufficient to
comply with the "current public information" requirement set forth in
Rule 144 promulgated under the Securities Act of 1933; and (iii) Caye
will cooperate to the fullest extent possible with removing the
restrictive legend, as soon as possible, from the 9,095,000 shares of
Caye Stock transferred pursuant to this Agreement.
I. Ownership of Caye Stock Certificate No. 1025. Calbear is the legal
and lawful owner of stock certificate no. 1025 (a true and correct copy
of which is attached as Exhibit H to this Agreement), representing
9,095,000 shares of the common stock of Caye Chapel, Inc., currently
registered in the name of Xxxxxxxxx Resources, Inc., and its ownership
is free and clear of any lien, encumbrance, or restriction on transfer,
except that the shares represented by certificate no. 1025 have not
been registered under the Securities Act of 1933 or any relevant state
securities law. Neither Calbear nor Xxxxxx have transferred or will
transfer any of the shares represented by certificate 1025 to any other
person whomsoever.
6. Term. All representations, warranties, covenants and agreements made in
this Agreement and in the exhibits attached hereto shall survive the
execution and delivery of this Agreement and any payments made pursuant
hereto.
7. Conditions Precedent to Closing. The obligations of the Consultants
under this Agreement are subject to the fulfillment--before or at the
Closing--of each of the following conditions, and no obligation on the
part of the Consultants shall arise or be enforceable until all of such
conditions are met:
A. The representations and warranties contained in this Agreement shall
all be true and correct;
B. The Debtors shall have performed or complied with all terms and
conditions of this Agreement which are required to be performed or
complied with before or at the time of Closing;
X. Xxxxxx shall provide Consultants with a true and correct copy of a
signed contract between Caye Chapel, Inc. and Calbear including the
following terms: (i) Caye will neither dilute Calbear's shareholder
interest in Caye nor effect any reverse split of Caye's Common Stock
until June 10, 2002 or until Calbear has fully liquidated its position,
whichever occurs sooner; (ii) Caye will exert its best efforts to make
available, as soon as reasonably possible and in no event more than 10
days from the date of this Agreement, "current public information" on
itself sufficient to comply with the "current
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public information" requirement set forth in Rule 144 promulgated under
the Securities Act of 1933; and (iii) Caye will cooperate to the
fullest extent possible with removing the restrictive legend, as soon
as possible, from the 9,095,000 shares of Caye Stock transferred
pursuant to this Agreement.
X. Xxxxxx shall provide Consultants with written proof that he is the
sole and exclusive owner of all membership interest in Calbear Gas,
LLC.
X. Xxxxxx shall provide Consultants with written proof that Caye
Chapel, Inc. currently has no more than 50,000,000 shares of common
stock authorized, and no more than 40,581,833 shares of its common
stock issued and outstanding.
X. Xxxxxx shall provide Consultants with written proof that Calbear is
the rightful owner, with ownership free and clear of any lien,
encumbrance, or restriction on transfer (other than as required by the
Securities Act of 1933, rules and regulations promulgated thereunder,
or comparable state securities laws), with regard to stock certificate
1025 (attached hereto as Exhibit H), which is currently registered in
the name of Xxxxxxxxx Resources, Inc., and that Xxxxxx has full power,
authority, and right to transfer such certificate into the name of
Consultants.
8. Conditional Return of the Caye Stock. Consultants hereby agree to
return Xxxxxx'x 100% interest in Calbear (and all 9,095,000 shares of
the Caye Stock) on the condition that the following event occurs at or
before Closing: Debtors make two cash payments to Consultants, as
follows: one in the amount of $345,000 for payment of all liability
arising from the two Consulting Agreements and the other in the amount
of $255,000 for payment of all liability arising from the Preferred
Stock Buyback Agreement, such payment to be made by wire transfer or
certified cashier's check.
If Debtors do not make the cash payments for $345,000 and $255,000 by
the Closing Date in the manner set forth in this Agreement, then the
sale of Calbear and the Caye Stock shall be consummated as set forth in
This Agreement. The Consultants shall then have the absolute and
irrevocable right, obtained in consideration for releasing the Debtors
from $600,000 in debts and unpaid claims, to complete ownership of
Calbear and the Caye Stock.
9. Closing. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place at or before 5:00 p.m. Mountain Daylight
Time on June 15, 1999. The Closing shall occur at 000 Xxxx 000 Xxxxx,
Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, or at such other place as the
parties hereto shall agree upon in writing. At the Closing, all of the
documents, payments, and items referred to in this Agreement shall be
exchanged. Facsimiles of signatures and documents shall be accepted by
all parties as originals, so long as they are legible.
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10. Non-Circumvention. Debtors agree not to terminate this Agreement or
refuse to perform any of its terms solely as a means to avoid paying
Consultants under this Agreement. Debtors will not act in any other way
to circumvent paying Consultants.
11. Calculation of Profits. The Debtors and Consultants acknowledge that in
the event Consultants, as a result of this Agreement, receive shares of
the Caye Stock, they may be considered an "affiliate" subject to
Section 16(b) of the Securities Exchange Act of 1934 (the "'34 Act").
In this regard, Debtors and Consultants agree that for the purposes of
any "profit" computation under Section 16(b) of the '34 Act, the price
paid for such shares is equal to the amount of the debts and unpaid
claims forgiven.
12. Indemnification. Subject to the provisions herein, Debtors and
Consultants shall indemnify, defend and hold each other harmless from
and against all demands, claims, actions, damages, liabilities, costs
and expenses (including, without limitation, interest, penalties and
attorneys' fees) asserted or imposed against or incurred by any other
party, arising from any action of, or a breach of any representation,
warranty, covenant, or agreement of, any other party to this Agreement.
13. Remedies. Debtors and Consultants acknowledge that in the event of a
breach of this Agreement by any of the debtors, money damages would be
inadequate, and the non- breaching parties 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.
14. MISCELLANEOUS.
A. Subsequent Events. Consultants and Debtors agree to notify each
other if, subsequent to the date of this Agreement, any 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 or
in any manner, but only by an instrument in writing executed by the
parties hereto.
C. Entire Agreement. This Agreement contains the entire agreement
between Consultants and Debtors relating to the settlement of the debts
described herein. This Agreement supersedes any and all prior
agreements, arrangements, or understandings (written or oral) between
the parties with respect to the settlement of such debts. No
understandings, statements, promises, or inducements contrary to the
terms of this Agreement exist with respect to the settlement of the
debts described herein. No representations, warranties, covenants, or
conditions, express or implied, other than as set forth herein, have
been made by any party with respect to the settlement of the debts
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described herein. This Agreement does not supersede the Acquisition
Agreement between Motor Sports and Genesis, dated April 6, 1999 and
amended by Addendum #1 dated May 10, 1999. Those written agreements
shall be construed together with this Agreement to effect the intent of
the parties, but no oral expressions or agreements whatsoever shall be
used to modify or supplement the terms of the written agreements
referred to herein.
D. Waiver. Any failure of any party to this Agreement to comply with
any of its obligations hereunder may be waived in writing by the party
to whom compliance is owed. The failure of any party to enforce at any
time any of the provisions of this Agreement shall in no way be
construed as a waiver of any such provision or a waiver of the right to
enforce 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.
G. Headings and Captions. The section headings in this Agreement are
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
H. Governing Law. All provisions of this Agreement shall be interpreted
under the laws of the State of Utah, without regard to its conflict of
laws rules. Any dispute arising out of this Agreement shall be brought
in a court of competent jurisdiction in Salt Lake County, Utah. The
parties expressly consent to the personal jurisdiction of the above-
identified courts and agree to exclude and waive any statute, law or
treaty which allows or requires any dispute to be decided in any forum,
or by any law, other than as provided in this Agreement.
I. Binding Effect. This Agreement is binding on the parties hereto and
inures to the benefit of the parties, their respective heirs, admin-
istrators, executors, successors, and assigns.
J. 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.
K. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret any
provision of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney's fees, court costs, and other costs
incurred in proceeding with the action. Attorney's fees, court costs,
or other costs may be ordered by the court in its decision of the
action or may be enforced in a separate action for such fees and costs.
If any party is represented by in-house counsel, the
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attorney fee attributed to in-house counsel shall equal the attorney
fee normally charged by attorneys in the prevailing party's community
who have similar backgrounds.
L. Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality
or un-enforceability shall not affect any other provisions of this
Agreement. Instead, this Agreement shall be construed as if it never
contained any such invalid, illegal or unenforceable provisions.
M. Mutual Cooperation The parties shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other
documents and take such other actions as may be necessary or convenient
to effect the transactions described herein.
N. Counterparts. A facsimile, telecopy, or other reproduction of this
Agreement may be executed 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. Such executed copy may be delivered by
facsimile or similar electronic transmission device if such delivery
produces legible copies of the relevant signatures. Such execution and
delivery shall be valid, binding and effective for all purposes.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any right or remedy by reason of this
Agreement, unless this Agreement specifically states such intent.
P. 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 effective
as of the date first written above.
"Global" or "Consultant
Global Universal, Inc.
__________/s/__________________
Xxxxxx Xxxxxxx, President
"Xxxxxx" or "Consultant"
Xxxxxx Consulting Group, Inc.
/s/
Xxxxxxx Xxxxxx, President
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"Calbear" or "Debtor"
Calbear Gas, LLC
____________/s/________________
Xxxxxx X. Xxxxxx, Member
"Genesis" or "Debtor"
Genesis Capital Corporation of Nevada
_____________/s/_______________
Xxxxxxxx X. Xxxxx, President
"Motor Sports" or "Debtor"
Motor Sports On Dirt, Inc.
_____________/s/_______________
Xxxxxx X. Xxxxxx, President
"Xxxxxx" or "Debtor"
Xxxxxx X. Xxxxxx, an individual
_______________/s/_____________
Xxxxxx X. Xxxxxx, an individual
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