MAS Financial Corp.
0000 Xxxxx Xxxxxxx Xxx. Tel: (000) 000-0000
Xxxxxxxxxx, XX 00000 Fax: (000) 000-0000
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Consulting Agreement
This agreement is entered into on this 28th day of October, 1997
by and between MAS Financial Corp. (hereinafter referred to as
"MAS"), and Xxxxx Electronics, Inc., their heirs, designees or
assignees, (hereinafter referred to as "Client"), and is made
with reference to the following recitations:
Whereas, MAS has skills and expertise in the fields of business
consulting, due diligence, mergers and acquisitions, and public
and private offering structuring and transactions, and,
Whereas, for the purpose of advancing the business plans of
Client, Client wishes to contract for the control stock of an
acquisition company from MAS, and,
Whereas MAS owns or controls the control stock of MAS
Acquisition I Corp. (hereinafter referred to as "Acquisition"
company, a corporation organized under the laws of the State
of Delaware, having those classes and numbers of shares as
more fully set forth on the company information sheet
attached hereto and made a part hereof by reference.
MAS has control of Acquisition company and is prepared to
transfer the control block. Now, therefore, the parties
hereto hereby agree and covenant as follows:
(1) MAS agrees to take certain actions, and undertake
certain obligations for the orderly transfer of the
control block of stock of Acquisition company.
(comprised of 7,652,790 common capital shares of the
total of 8,503,100 common capital shares), to Client.
MAS agrees as well to do all of the following acts:
* Name Change and New Stock Certificates
* Unaudited financial statements brought forward
to most recent period.
* Change of officers and directors and resignation
of present board
* 15C211 prepared and filed with NASD.
* Deliver control block shares.
* Obtain CUSIP number.
* Obtain a stock symbol for trading on the NASDAQ
Bulletin Board
* Furnish Market Maker.
* Any other document or act needed to make an
orderly transfer of control.
All expenses incurred by the Acquisition company, after
the transfer of control by MAS to the Client, shall be
the responsibility of the Acquisition company.
(2) At closing, which shall take place at a time and
place mutually agreeable to the parties hereto, MAS
shall deliver to Client or its designee the following:
(a) Certificates representing the shares being sold
hereunder; containing the following legend:
"The securities represented by this Certificate have
not been registered under the Securities Act of 1933
(the "Act") and are "Restricted Securities" as the term
is defined in Rule 144 under the Act. The Common
Shares may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration
statement under the Act or exemption, the availability
of which is to be established to the satisfaction of
the Corporation."
(b) Necessary consents, if any, from the state of
domicile of the Acquisition company;
(c) All corporate books, records, and documents,
stock books, ledgers, minute books, articles
and by-laws of the Acquisition company;
(d) Shareholder list of the Acquisition company;
(e) Resignations of all present officers and directors,
effective as of the closing date;
(f) Copy of audited 1996 and unaudited 1997
financial statements;
(3) MAS represents and warrants the following:
(a) that the Acquisition company is a corporation duly
organized and existing under the laws of the State of
Delaware, unless otherwise noted;
(b) that the Acquisition company will use its best
efforts to preserve its business organization intact.
(c) that the Acquisition company will not enter into
any contract, commitment or transaction, or declare,
set aside or pay any dividend, or make any distribution
in respect of its capital stock, or waive any
obligation or liability, or compromise any claim, or
cancel any note, loan or other obligation owed to it,
without the consent of Client.
(4) MAS represents and warrants the following prior
to closing:
(a) That MAS will not cause any amendment to be made
in the Articles of Incorporation or By-Laws of the
Acquisition company, nor issue or cause to be issued
any additional shares of capital stock; nor issue or
cause to be issued any warrants, obligations,
subscriptions, options, convertible securities, or
other commitments under which any additional shares
of its capital stock may be directly or indirectly
authorized, issued or transferred nor will either
agree to do any of the acts listed above.
(b) That MAS will not do, or agree to do, any of the
following acts: (i) make any change in compensation
payable or to become payable to them, to any officer,
employee, sales agent or representative, (ii) make
any change in benefits payable to any officer,
employees, sales agent, or representative under any
bonus or pension plan or other contract or commitment,
or (iii) modify any collective bargaining agreement
to which the Acquisition company is a party or by
which it may be bound.
(5) Client represents and warrants the following
prior to closing:
(a) That Client is solely responsibly for the
decision to by acquired by the Acquisition company,
(b) That the Client firm to be acquired by the
Acquisition company which is the subject of this agreement
shall be suitable in all respects for such merger,
(6) The parties shall at all times keep each other's
information, sources, trade secrets, processes, and
confidential information strictly confidential.
(7) MAS is not rendering legal advise to Client. Each
party is responsible for all of it's own professional,
legal, accounting, Broker-Dealer, and consulting fees
as they may apply to each party.
(8) Should Client terminate this transaction for any
reason other than the malfeasance or nonperformance of
MAS prior to the acquisition of the Acquisition company,
all monies paid to MAS up until that point shall be
retained by MAS as liquidated damages. The parties agree
to the reasonableness of these liquidated damages.
All documents and work product prepared for or on
behalf of Client by MAS up until that point shall
become the property of Client.
(9) MAS warrants that the Acquisition company being
transferred shall be transferred with no liabilities
and little or no assets, and shall defend and hold
Client and the Acquisition company harmless against
any action by any third party against either of them
arising out of, or as a consequence of, any act or
omission of MAS or the Acquisition company prior to,
or during the closing contemplated by this contract
of sale. MAS reserves the right, if necessary, to
substitute another Acquisition company acceptable
to Client of like worth.
(10) All of the representations and warranties contained
within this contract of sale, whether made by Client,
MAS, or MAS on behalf of the Acquisition company, will
be true and correct on the closing date as if made
on that date.
(11) At any time prior to the closing, Client and their
counsel, accountants and other agents shall have full
access during normal business hours to all properties,
books, accounts, records, contracts and documents
relating to the Acquisition company.
(12) This agreement shall be governed by the laws of
the State of Indiana, except insofar as the laws of the
State of Delaware shall apply in keeping with conflict
of laws and rules, in any dispute. The parties agree to
the jurisdiction of the Courts of the State of Indiana
and the United States District Court for the Southern
District of Indiana as the forums for the resolution of
any legal disputes between the parties. Client agrees
to pay court costs, attorney fees in a reasonable amount,
and interest on any unpaid balances at the judgment rate
then in effect in the State of Indiana should it become
necessary for MAS to engage in legal action to recover
any portion of the purchase price or any other fees
from Client.
(13) If any bona fide action or proceeding shall be pending
against any party on the closing date that could result
in an unfavorable judgment, decree or order that would
prevent or make unlawful the performance of this agreement,
or if any agency of the federal or of any state government
shall have objected to it on or before the closing date to
this transaction, or if any prospectus contemplated with
respect to the issuance and sale of shares by Buyers shall
have been disapproved by any federal or state regulatory
agency, either party may cancel and terminate this agreement
without liability to the other. All representations and
warranties of the parties shall expire and terminate and
be extinguished by the closing, and consummation of the
closing shall be conclusive proof that each party is fully
satisfied with the facts constituting the basis of the
representations and warranties of the other party and
with the performance of their obligations hereunder.
This paragraph shall not affect any obligation of any
party under this contract that is permitted to be
performed in whole or in part after the closing.
(14) Neither party may assign this agreement without the
prior written consent of the other party, which consent
shall not be unreasonably withheld. However, MAS may
requires up to 180 days to perform due diligence on
any assignee of Client, and may reject any assignee
not qualified by MAS.
(15) This documents contains the entire agreement between
the parties hereto. No oral or other representation or
warranty has been given to Client by MAS, and this
agreement controls over any and all oral representations
made by any party to this transaction. This agreement
may only be modified by a writing, signed by the parties.
(16) Each party agrees to execute all of the documents
and do all of the things necessary to effectuate the
purpose of this agreement, without delay or limitations.
Accepted and Agreed: Accepted and Agreed:
/s/ Xxxxx Xxxx /s/ Xxxx Xxxxx
_____________________________ _______________________
MAS Financial Corp. Xxxxx Electronics, Inc.
By: Xx. Xxxxx Xxxx, President By: Mr. Xxxx Xxxxx
Mailing Address:
MAS Financial Corp. Xxxxx Electronics, Inc.
0000 Xxxxx Xxxxxxx Xxx. X.X. Xxx 00000
Xxxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
