CONSULTING AGREEMENT
This Agreement is made and entered into this _____ day of March, 1999, between
CybeRecord, Inc. (Nevada) (the "Company") and Northwest Capital Partners, L.L.C.
(the "Consultant"), and sets forth the terms and conditions upon which the
Consultant will act as financial advisor to the Company in connection with the
completion of the financing described in Exhibit "A" attached hereto (the
"Financing").
In consideration for the mutual promises and covenants contained herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. PURPOSE. The Company hereby engages the Consultant during the term hereof to
arrange financing, as a finder, for the Company upon terms and conditions as set
forth herein and in accordance with the requirements set forth in Exhibit "A"
(the "Financing"). Consultant shall also have a right of first refusal to
consult with the Company regarding appropriate financings subsequent to the
Financings set forth in Exhibit "A" for a period of three years following the
term of this Agreement.
2. TERM. The term of this Agreement shall be for a period of 36 months, provided
that the first Interim Financing shall be completed within 30 days of the
Company's approval and, following the quotation of the Company's common stock on
the NASD OTC Bulletin Board. The second Interim Financing shall be completed
within 180 days of the Company's approval, following the quotation of the
Company's common stock on the NASD OTC Bulletin Board. This offering will be
pursuant to Rule 504 or other applicable Rule adopted pursuant to the Securities
Act of 1933, as amended (the "Act"). A third round of financing, if required,
shall be negotiated and completed after the 180 day period following the date
the Company's common stock is quoted on the NASD OTC Bull tin Board.
3. DUTIES OF THE CONSULTANT. During the term hereof, Consultant shall provide
the Company with the benefit of its best judgment and efforts to complete the
Financing on a reasonable business basis in accordance with the requirements set
forth in Exhibit "A." It shall be Consultant's duty to suggest and evaluate from
the standpoint of financial soundness, the Company's business plans and
programs, corporate financial structures, and corporate organization, and any
other financial matters involving the Company. In connection with the financing
contemplated by this Agreement, Consultant agrees that it will advise and work
with the Company to complete the Financing successfully in accordance with Rule
504 or other applicable Rule under the Act and the related and applicable Blue
Sky laws of the states in which the financing is completed. Consultant shall
advise the Company of each proposed broker or other financing or referral source
identified by Consultant prior to authorizing any participation in the
Financing. Consultant shall use its best efforts, after receiving information
from Company sufficient to comply with the informational requirements of Rule 1
5c2-l 1 under the Securities Exchange Act of 1934 (the "1934 Act"), to arrange
for the shares of common stock of the Company to be quoted on the NASD OTC
Bulletin Board either by direct application and approval through the NASD or by
reverse merger. The Company and the Consultant shall review the potential filing
of a Form 10 (1934 Act form) with the U.S. Securities and Exchange Commission
following the Second Stage Financing. Company agrees that it will accept
Financing amounts at each closing contemplated by Exhibit "A" which are in
excess of the amounts in Exhibit "A" if Consultant is able to raise such
additional amounts in accordance with the appropriate disclosure and the
securities registration exemption provisions of the Act and the relevant Blue
Sky laws. Consultant's duties shall also include, but not be limited to:
3.1 Assist the Company's management in the development and execution of a
strategic short-term, intermediate term and long-term financial plan;
3.2 Assist the Company in the negotiation of the terms of the Financings;
3.3 Assist the management of the Company in connection with inquiries made by
or on behalf 0 any proposed brokers and investors;
3.4 Assist the management of the Company in the preparation of presentation
materials for the purpose of pursuing the Financing;
3.5 Using its best efforts, on terms acceptable to the Company, to arrange
the Financings as described in Exhibit "A" attached hereto.
3.6 If the Company and the Consultant determine that a direct application to
the NASD is not n the best interest of the Company and determine that the
Company go public by way of a reverse merger with an existing publicly traded
company the Consultant will be responsible for the location and acquisition of
such public company including all costs associated with its acquisition.
4. CONSULTANT'S COMPENSATION.
4.1 The Company shall pay Consultant a fee of $500.00 for each month or
partial month this Agreement has been in effect, providing that such payment
shall be paid, as accrued, at the closing of the Interim Financing and then
continuing through the closing of the Second and Third Stage Financings, as
described in Exhibit "A," by the Consultant. Upon the closing of any Third Round
of Financing, the fee of $500.00 will be increased to $1,000.00 per month will
be extended for an additional 36 months, for duties to be mutually agreed upon
by the parties.
4.2 The Company agrees to issue the Consultant 500,000 shares at a value of
$0.01 per share if the Company's market capitalization achieves the value of
$100,000,000.00 or more. The Company agrees to issue the Consultant an
additional 500,000 shares a' a value of $0.01 per share if the Company's market
capitalization achieves the value of $200,000,000.00 or more. These shares will
be issued by the company as restricted shares at a value of $0.01 per share and
will be granted "piggy- back" rights so that the shares will be registered upon
the Company's first registration after the share's issuance.
4.3 The Company agrees that it shall reimburse Consultant for reasonable,
out-of-pocket expenses incurred by Consultant in performing the services
provided pursuant to this Agreement, provided that such out-of-pocket expense
reimbursement shall not exceed $3,000 in any calendar month or partial month,
and provided that any expenses in excess of $500 ill any calendar month shall
require advance approval by the Company. Such reimbursement shall be paid upon
the within 15 days of the Company's receipt of the Consultant's invoice. Such
reimbursement may be claimed for any month commencing with the signing of this
Agreement and monthly thereafter to the date of each closing, payable within 15
days of receipt.
4.4 If he Consultant is unsuccessful in introducing investors to the Company
(either directly or through a broker) who would be willing to fund the
Financings contemplated in Exhibit "A" within the time periods set forth, this
Agreement may be terminated at the Company's discretion, unless otherwise
extended by mutual consent. Such consent will be implied should the Company be
in or continue negotiation with investors which should reasonably result in
successful Financing or should the Company accept funds from one of the sources
introduced to the Company by the Consultant during this period. Following
termination, however, Consultant will be entitled to the consideration above as
to those stages of the Financing completed and in the event that after
termination a financing of any kind or amount is consummated with any party
introduced to the Company by the Consultant during a period of twelve months
after termination of this Agreement.
5. INDEMNIFICATION.
5.1 The Company agrees to indemnify the Consultant, its agents and employees
against any and all claims, lawsuits, and litigation arising from
representations of the Company made t Consultant or prospective investors
concerning its business plan and financial condition. Such indemnification shall
include reasonable attorney's fees to defend any such actions or claims.
5.2 The Consultant agrees to indemnify the Company, its agents and employees
against any and all claims, lawsuits, and litigation arising from
representations of the Consultant made to prospective investors concerning the
Company except for those representations constituting information provided by
the Company. Such indemnification shall include reasonable attorney's fees to
defend any such actions or claims.
Promptly after receipt by an indemnified party of notice of any claim or
commencement of any action in respect of which indemnity may be sought, the
indemnified party will notify the indemnifying party in writing of the receipt
or commencement thereof and the indemnifying party shall have the right to
assume the defense of any such claim or action (including the employment of
counsel reasonably satisfactory to the indemnified party and the payment of fees
and expenses of such counsel), after which the indemnifying party shall not be
liable to the indemnified party for any legal fees incurred by the indemnified
party in connection with the defense of such claim or action. Notwithstanding
the prior sentence, the indemnified party shall have the right to control its
defense if in the opinion of it counsel, the indemnified party's defense is
unique or separate to it, as the case may be, as opposed to a defense pertaining
to the indemnifying party. In such event, the indemnified party shall have the
right to retain counsel reasonably satisfactory to the indemnifying party at the
indemnifying party's expense, to represent it in any claim or action in respect
of which indemnity may be sought and agrees to cooperate with the indemnifying
party and the indemnifying party's counsel on the defense of any such claim of
action, it being understood, however, that the indemnifying party shall not, in
connection with any such claim or action or separate but substantially similar
or related claim or action in the same jurisdiction arising out of the same
general circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys, unless the defense of one indemnified party
is unique or separate from that of another indemnified party subject to the same
claim or action. No party shall be liable for any settlement of any claim or
action effected without its written consent.
6. REPRESENTATION AND WARRANTIES. Company represents and warrants as follows:
6.1 The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Nevada and is
qualified as a foreign corporation where required.
6.2 The shares of common stock of the Company which will be delivered to the
investors and Consultant will be duly authorized and validly issued and fully
paid and nonassessable.
7. CONDITIONS PRECEDENT. Consultant's duties to use its best efforts to complete
the Financings contemplated herein shall be subject to:
7.1 The Company will not change or modify the Company's capital structure
without the prior written consent of Consultant, which consent shall not be
unreasonably withheld.
7.2 The Company will submit quarterly budgets to Consultant during the period
of the Financing and for one year after successful completion of the Financing.
7.3 The Company will provide all pertinent information in connection with the
Company's assets, including, but not limited to, all tangible and intangible
assets, and all copyright and trademark information.
7.4 The Company shall have received executed employment agreements from each
of its officers and directors and other key individuals in a form reasonably
appropriate in accordance with industry standards.
7.5 The Company will provide Consultant with all information and
verifications thereof which Consultant or its legal counsel may reasonably
request from the Company in a manner and form satisfactory to Consultant and its
legal counsel.
7.6 Receipt by Consultant of suitable financial statements of the Company
that are in form and substance satisfactory to Consultant, in its sole
discretion. The Company shall provide financia1 statements consisting of a
balance sheet and a related statement of income for the period then ended, which
fairly present the financial condition of each as of their respective dates and
for the periods involved, and such statements shall be prepared in accordance
with generally accepted accounting principles consistently applied or upon such
other basis as the parties shall mutually agree and for the periods mutually
agreed upon among the parties.
7.7 All existing shares of the Company have or will be issued in accordance
to Rule 4(2) of the 1933 Act and consequently, such securities will be
"Restricted Securities" as such term is defined in Rule 144 as promulgated under
the 1933 Act and thus will be subject to certain resale limitations as contained
in Rule 144 and the certificates shall bear the following restrictive legend
limiting their resale under Rule 144 of the Act.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT
TO A TRANSACTION EFFECTED IN RELIANCE UPON SECTION 4(2) OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN THE SUBJECT OF A REGISTRATIQN
STATEMENT UNDER THE ACT OR ANY STATE SECURITIES ACT. THESE SECURITIES MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR APPIACABLE
EXEMPTION THEREFROM UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES ACT."
8. CONDITIONS SUBSEQUENT.
8.1 For a period of three years from the date of closing of a Financing
arranged by Consultant pursuant to this Agreement, the Company will provide
Consultant, at its expense, following a reasonable request by Consultant for the
purpose of reviewing and/or protecting the Company's shareholder's interests,
with copies of stock transfer sheets from the Company's Transfer Agent, as well
as weekly DTC Reports from the Depository Trust Company to the extent such
reports can be made available to a party that is not an affiliate of the
Company, and will provide Consultant with all publicly available financial
reports and publicly available reports of material developments regarding the
Company and its compliance with laws and regulations applicable thereto.
8.2 For a period of three years after the date that the Company's shares of
common stock commence trading on the NASD OTC Bulletin Board, the Company's
executive officers and directors who own at least five percent (5%) of the
Company's common stock ("Principal Stockholders") and the Company shall provide
the Company with the right of first refusal with respect to any offering (public
or private) of the Company's securities by either the Company or the Principal
Stockholders involving more than 1000 shares of stock.
For a period of three years after the date that the Company's shares of common
stock commence trading on the NASD OTC Bulletin Board, the Company's executive
officers and directors who own at least five percent (5%) of the Company's
common stock ("Principal Stockholders") and the Company shall provide the
Consultant with the second right of first refusal with respect to any offering
(public or private) of the Company's securities by either the Company or the
Principal Stockholders involving more than 1000 shares of stock.
For a period of three years after the date that the Company's shares of common
stock commence trading on the NASD OTC Bulletin Board, the Company's executive
officers and directors who own at least five percent (5%) of the Company's
common stock ("Principal Stockholders") and the Company shall provide the other
Principal Stockholders of the Company with the third right of first refusal with
respect to any offering (public or private) of the Company's securities by
either the Company or the Principal Stockholders involving more than 1000 shares
of stock.
8.3 The Company's officers and directors will use their best efforts to cause
each Principal Shareholder and each other holder of 5% or more of the Company's
common stock to enter into an agreement with Consultant pursuant to the terms of
which each such person shall agree not to sell any shares owned by such person
on the NASD OTC Bulletin Board, for a period of twelve months after the date
that the Company's shares of common stock commence trading on the NASD OTC
Bulletin Board, without Consultant's prior written consent, which consent will
not be unreasonably withheld. Provided that each such person may sell up to
1,000 shares every three months after the first 180 days has passed after the
date that the Company's shares of common stock commence trading on the NASD OTC
Bulletin Board.
8.4 Consultant shall be entitled for a period of five years to nominate a
director for the Company's board of directors which the Company's existing
directors will support. Such director shall be paid the same salary as other
directors (for director's duties performed) and shall participate in all bonus
programs granted to the Company's board of directors.
9. TERMINATION OF RELATIONSHIP. This Agreement shall terminate upon the
happening of any one of the following events:
9.1 Either party may terminate this Agreement upon ten days written notice to
the other that a material breach by the other of the terms or covenants of this
Agreement shall have occurred and such breach shall not have been cured within
ten days after such notice. 9.2 Either party shall have the right (but not the
obligation) to terminate this Agreement upon written notice to the other party
if such terminating party reasonably determines that the other party or any of
its directors, officers or controlling shareholders has engaged in any unlawful,
wrongful, or fraudulent act against the Company or its shareholders.
9.3 Either party shall have the right (but not the obligation) to terminate
this Agreement upon written notice to the other party if such terminating party
shall determine that any material fact concerning the other party represented to
them during the course of performing their undertakings under this Agreement are
misstated or untrue or that the other party has intentionally failed to provide
the terminating party with material facts concerning the other party.
9.4 Either party may terminate this Agreement at any time: (i) in the event
of war; (ii) in the event of any material adverse change in the business,
property or financial condition of the Company (of which terminating party shall
be the sole judge); (iii) in the event of any action, suit or proceeding at law
or at equity against the Company or Consultant, or by any Federal, State or
other commission or agency where any unfavorable decision would materially
adversely affect the business, property, financial condition or income of a
party; (iv) in the event of adverse market conditions of which event the
terminating party is to be the sole judge. Further, Consultant's commitment will
be subject to receipt by Consultant of all information and verifications thereof
which Consultant or their counsel may reasonably request from the Company in a
manner and form satisfactory to Consultant.
In the event of Termination by Consultant, upon grounds stated herein above,
Consultant shall be entitled to accrued fees and expense reimbursements and
shares otherwise payable shall be paid as though this Agreement was not
terminated.
10. MISCELLANEOUS.
10.1 Authorization. This Agreement has been duly authorized, executed and
delivered by and on behalf of the Company and the Consultant.
10.2. Notices. Any notice or other communication required or permitted by any
provision of this Agreement shall be in writing and shall be deemed to have been
given or served for all purposes if delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid, addressed to the
parties as follows:
To Consultant: Northwest Capital Partners, L.L.C.
Mr. Xxxxx Xxxxxx
00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Tel : 000-000-0000
Fax : 000-000-0000
To the Shareholders
and to the Company: CybeRecord, Inc. Nevada)
Xx. Xxxxx Xxxxx
00 Xx Xxxxxxx Xxx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Tel : 000-000 0000
Fax: 000-000-0000
10.3 Validity; Complete Agreement. The validity and enforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof. This Agreement sets forth the entire understanding and
embodies the entire agreement of the parties with respect to the subject matter
covered hereby and supersedes all prior or contemporaneous oral or written
agreements, understandings, arrangements, negotiations or commumcations among
the parties hereto.
10.4 Amendment. This Agreement shall not be modified or amended except by
written agreement of the parties hereto.
10.5 Governing Law. This Agreement shall be governed by the laws of the state
of Washington giving effect to that state's conflict of laws principle.
In witness whereof, the parties hereto have executed this Agreement as of the
date first above written.
NORTHWEST CAPITAL PARTNERS, L.L.C.
By:
-----------------------
Xxxxx Xxxxxx, President
CYBERECORD INC. (NEVADA)
By:
---------------------------
Xxxxx Xxxxx, Chairman & CEO
EXHIBIT "A"
CybeRecord, Inc. (Nevada) Financing Requirements
Attached hereto and made a part hereof the Agreement between CybeRecord, Inc.
(Nevada) and Northwest Capital Partners, L.L.C.
Dated March ___ 1999
MINIMUM AMOUNT APPROXIMATE DATE
$500,000 Interim Financing June 30, 1999
$500,000 Interim Financing (1) October31, 1999
Third Stage financings as required (2)
(1) The price per share of common stock shall be determined by the Company
following consultation with Consultant.
(1) The term "Interim Financing" as used in the Agreement shall include
segment 1 above.
(2) Within 6 months after the date the Company's common stock is quoted on the
NASD OTC Bulletin Board, provided that the Company has subsequently filed with
the U.S. Securities and Exchange Commission a Form 10 pursuant to Section 12(g)
of the 1934 Act.
CYBERECORD. INC. (NEVADA)
APPROVAL OF CAPITAL RESTRUCTURE
The undersigned hereby agree to revise the Capital Structure of CybeRecord, Inc.
(Nevada) as indicated below. Furthermore, the undersigned agree to allow the
CybeRecord, Inc. (Nevada) Compensation Committee to grant stock options from
those shares of stock reserved in the Employee Pool to new or existing hires, in
accordance. with the option package structure guidelines to be determined by the
CybeRecord, Inc. (Nevada) Compensation Committee, and at the Committee's
discretion.
Shareholder Shares
----------- ------
Xxxxx Xxxxx 1,500,000
Xxxxx & Xxxxxxxx Xxxxxxx 1,500,000
Xxxxx Xxxxxxxxxx 1,300,000
Xxxxx X. & Xxxxxxx Xxxxx 1,100,000
Xxxxxxx X. & Xxxxxxxx X. Xxxxxx 500,000
Xxxx X. & Xxxxxxx Xxxxxxx 100,000
Total Shares to be issued to CybeRecord, Inc. 6,000,000
Signed this ____ day of March, 1999 by:
Xxxxx Xxxxxx
President, Northwest Capital Partners, L.L.C.
Xxxxx Xxxxx
Chairman & CEO CybeRecord, Inc. (Nevada)
