CONSULTING AGREEMENT
This Consulting Agreement is made effective this 1st day of March, 1996
by and between A & Z Professional Consultants, Inc., a Utah corporation with
offices at 000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000
(hereinafter "Consultant") and Flexweight Corporation a Kansas corporation, with
offices as found under "Notices" below (hereinafter "Client").
RECITALS
WHEREAS, Consultant is in the business of providing general business
consulting services to privately held and publicly-held corporations,
and
WHEREAS, Client desires to retain Consultant to provide advice relative
to corporate and consulting services, and
WHEREAS, Xx. Xxxxxx Xxxxxx is a shareholder and director of Client and
agrees to facilitate Consultant's efforts to the benefit of the Client
and subject to the limitations of their Agreement, then
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is expressly
acknowledged, Client and Consultant agree as follows:
1. Engagement of Consultant.
(a) Consultant agrees to retain sub-contractors, including Canton
Financial Services Corporation to act under Consultant's guidance, to
assist and counsel Client relative to the steps necessary to prepare
client for a merger. This includes, but is not limited to, facilitating
efforts to cause Client's corporate status with the state to be in good
standing; re-structuring Client's capital formation possibly through
reverse splits, re-authorization of debt and equity; participating in
the negotiations for potential settlement of Client's outstanding debts
and litigation; preparing financial statements and audits; preparing and
filing other documents with the necessary regulatory bodies as is
required by law, including, but not limited to preparing and filing
forms 10K and 10Q as necessary.
(b) Consultant agrees to prospect for, interview and perform necessary
due diligence on potential merger candidates and to negotiate and
structure proposed mergers with potential candidates.
(c) Consultant further agrees to aid Client in preparation of Client's
15c2-11, and to use its best efforts to recruit market makers in order
to develop a market for Client's stock. Additionally, Consultant agrees
to assist client in preparing press releases and corporate fact sheets
and to perform other public and investor relations services in an
attempt to develop an active market for Client's stock.
(d) Consultant requires, in order to proceed as outlined and proposed
herein, and Client agrees to use its best efforts to acquire, a vote
among existing shareholders to approve a reverse stock split which shall
reduce existing outstanding shares to no less than 50,000 shares.
(e) Client agrees to attempt to acquire sufficient vote from existing
shareholders to elect new board members and company officers as directed
by Consultant. Said board may also include Xx. Xxxxxx Xxxxxx at Xx.
Xxxxxx'x sole discretion. Xx. Xxxxxx further agrees to allow Consultant
to have complete voting rights of his shares for the term of this
agreement -- after which time said voting rights shall revert to him
automatically without any further instruments being executed.
2. Compensation.
(a) Upon the execution of this agreement, Client agrees to issue as an
engagement fee an amount equal to 25% of the issued and outstanding
shares of Client in restricted stock ("Engagement Shares") (the nature
of the restriction to be subject to approval of Xx. Xxxxxx), to be
divided among parties (described in items (i) and (ii) below) as
follows:
(i) A-Z Professional Consultants, Inc. shall receive
an amount equal to ninety-percent (90%) of
Engagement Shares.
(ii) Park Street Investment, Inc., shall receive an
amount equal to ten (10%) of Engagement Shares.
(iii) Said shares shall be common stock of Client with a
par value of .001. If Client experiences a share
split of its stock, said shares shall be adjusted
proportionately.
(c) Upon completion of Client's audited financials, filing of a current
10K and 10Q, and delivery of a Rule 15c2-11 package to a market maker as
submittal for trading on the NASD electronic bulletin board, Client
shall issue as an additional fee to designees of Consultant an amount
equal to fifteen-percent (15%) of the issued and outstanding shares of
Client. Said shares shall be issued pursuant to a form S-8 registration
to be prepared by Consultant with cooperation from Client and Xx.
Xxxxxx. In the event that an issuance based upon a form S-8 registration
is not available, said shares shall be issued with registration rights
as further described herein as Attachment "A".
(d) In addition to these fees, Consultant and/or its designees shall be
entitled to an option on additional shares in the event of a merger
between Client and parties introduced by Consultant. Said option shall
be equal to an amount such that Consultant and or its designees shall
own no more than ninety-percent (90%) of the issued and outstanding
shares of Client immediately prior to Transfer. Said shares shall be
issued pursuant to a form S-8 registration to be prepared by Consultant
with cooperation from Client and Xx. Xxxxxx. In the event that an
issuance based upon a form S-8 registration is not available, said
shares shall be issued with registration rights as further described
herein as Attachment "A".
(e) In the event of a merger, Consultant shall further pay to Xx. Xxxxxx
and/or designees ten percent (10%) of the total stock fee earned by
Consultant or its designees in the aggregate, or a minimum of 40,000
shares of Client's common stock for such merger, whichever is greater.
(f) For the Term of this Agreement, Client agrees not to issue
additional shares of Client to any parties without Consultant's written
permission.
3. Term of Agreement, Extensions and Renewals.
This Agreement shall have an initial term of one (1) year ("Term") from
the above date first appearing herein, although the Agreement may be
terminated earlier if the consulting services are completed prior to the
expiration of this time period. This Agreement can be extended on a
month to month basis (the "Extension Period") by mutual agreement of the
parties executed in writing specifying the compensation for the
Extension Period. Such notice of either extension or termination shall
be in writing and shall be effective ten (10) days after delivery to the
other party. In the event of termination pursuant to this paragraph,
neighter party shall have any further rights or obligations hereunder
after the effective date of such termination except that the obligation
of Client to make payments as provided for in this Agreement and to
reimburse costs and expenses shall continue until paid in full by
Client.
4. Due Diligence.
(a) Client will provide Consultant as soon as possible the following
information:
* Articles, By-Laws, Minutes of Shareholder's and
Director's meetings, Board Resolutions
* Copies of all tax and SEC filings going back five years
(including 10K's and 10Q's if available)
* Copies of most current three years of financial
statements
* Previous 15c-211 if available
* Letter from the Company listing all pending or
threatened litigation
* Computer printout of shareholder list and stock
transfer records
* Proof of ownership of assets, accounts receivable, bank
statements and copies of deeds, liens, mortgages, and
any other documents that may be reasonably required by
Consultant to execute its due diligence for the
transactions contemplated herein.
(b) Client shall use best efforts to make available to Consultant other
information relating to its business as may be reasonably requested by
Consultant to enable Consultant to make such investigation of Client and
its business prospects, and Client shall use best efforts to make
available to Consultant names, addresses and telephone numbers as
Consultant may need to verify or substantiate any such information
provided.
5. Best Efforts Basis.
Consultant agrees that it will at all times faithfully and to the best
of its experience, ability and talents, perform all the duties that may
be required of and from Consultant pursuant to the terms of this
Agreement. Consultant does not guarantee that its efforts will have any
impact on Client's business or that any subsequent financial improvement
will result of Consultant's efforts. Client understands and acknowledges
that the success or failure of Consultant's efforts will be predicated
on Client's assets and operating results, of which Consultant has been
advised that there are minimal assets and operating results at best.
6. All Prior Agreements Terminated.
This Agreement constitutes the entire understanding of the parties with
respect to the engagement of Consultant, and all prior agreements and
understandings with respect thereto are hereby terminated and shall be
of no force effect.
7. Consultant is Not an Agent or Employee.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be
considered to act as the employee or agent of Client or otherwise
represent or bind Client. For the purposes of this Agreement, Consultant
is an independent contractor. All final decisions with respect to acts
of Client or its affiliates, whether or not made pursuant to or in
reliance on information or advice furnished by Consultant hereunder,
shall be those of Client or such affiliates and Consultant shall under
no circumstances be liable for any expense incurred or loss suffered by
Client as a consequence of such action or decisions.
8. Independent Legal and Financial Advice.
Consultant is not a law firm, neither is it an accounting firm,
Consultant does, however, employ professionals in those capacities to
better enable Consultant to provide consulting services. Client
represents that it has not nor will it construe any of Consultant's
representations to be statements of law. Client has and will continue to
seek the independent advice of legal and financial counsel regarding all
material aspects of the transactions contemplated by this Agreement,
including the review of all documents provided by Consultant to Client
and all opportunities Consultant introduces to Client. Client
acknowledge that the attorneys, accountants and other advisors employed
by Consultant represent the interests of Consultant solely, and that no
representation or warranty has been given to Client by Consultant as to
any legal, tax, accounting, financial or other aspect of the
transactions contemplated by this Agreement.
9. Miscellaneous.
(a) Authority. The execution and performance of this Agreement have been
duty authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
(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) Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided bylaw. No delay or failure on the part of either party
in the exercise of any right or remedy arising from a breach of this
Agreement shall operate as a waiver of any subsequent right or remedy
arising from a subsequent breach of this Agreement. The consent of any
party where required hereunder to any act of occurrence shall not be
deemed to be a consent to any other act of occurrence.
(d) Assignment:
(i) Neither this Agreement nor any right created by it
shall be assignable by either party without the
prior written consent of the other;
(ii) This agreement is intended to confer its rights
and benefits upon Xx. Xxxxxxxxx, the Client, its
heirs, assigns, and successors in interest.
(e) 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 Unites States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal or when sent by facsimile
transmission, charges prepared provided that the communication is
addressed:
(i) In the case of Consultant to:
Canton Financial Services, Inc.
Attention: Xxxxxx X. Xxxxxxxxxxx
000 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) In the case of Client, to:
Flexweight Corporation
Attention: Xxxxxx X. Xxxxxx
0000 Xxxx Xxxxxx Xxxxx 000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other person or address designed by Client to receive notice.
(f) Headings and Captions. The headings of paragraphs are included
solely for convenience. If a conflict exists between any heading and the
text of this Agreement, the text shall control.
(g) Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with respect
to the transaction contemplated by the Agreement. It may be executed in
any number of counterparts but the aggregate of the counterparts
together constitute only one and the same instrument.
(h) Effect of Partial Invalidity. 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 unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be constructed as
if it never contained any such invalid, illegal or unenforceable
provisions.
(i) Controlling Law. The validity, interpretation, and performance of
this Agreement shall be controlled by and construed under the laws of
the State of Kansas.
(j) Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
recover actual attorney's fee from the other party. The attorney's fees
may be ordered by the court in the trial of any action described in this
paragraph or may be enforced in a separate action brought for
determining attorney's fees.
(k) Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
(l) Mutual Cooperation. The parties hereto shall cooperate with each
other to achieve the purpose of this Agreement, and shall execute such
other and further documents and take such other and further actions as
may be necessary or convenient to effect the transactions described
herein.
(m) Indemnification. The parties agrees to indemnify 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 and attorneys' fees and expenses
asserted against or imposed or incurred by either party by reason of or
resulting from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement.
(n) 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 rights or remedies under or by reason
of this Agreement, unless this Agreement specifically states such
intent.
(o) Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the other
party, the party who receives the transmission may rely upon the
electronic facsimile a signed original of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
A-Z PROFESSIONAL CONSULTANTS, INC.
By:/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx
President
FLEXWEIGHT CORPORATION
By:/s/ Xxxxxx Xxxxxx
President & Director
