AGREEMENT
This Agreement ("Agreement") is entered into this 14th day of February
2002 between Southwest Venture Reification, Inc., ("Southwest" or
"Consultant"), an Arizona company engaged in providing among other services,
acquisition consulting and finders, through its partners, subsidiaries or
affiliates and G/O International, Inc., a Colorado corporation, ("G/O" or the
"Company"), in connection with the rendering by Southwest to G/O of
acquisition consulting services and finder services, as described herein
below, for and in consideration of the compensation described.
WHEREAS, G/O is seeking acquisition opportunities and desires to retain
Southwest to perform certain acquisition consulting services and finder
services as described herein and Southwest is willing to render and provide
such service to the Company.
THEREFORE, in consideration of the mutual agreements and covenants set
forth in this Agreement, and intending to be legally bound hereby, the parties
agree as follows:
1. Engagement of Consultant. The Company hereby engages and retains
Consultant to render to the Company the Acquisition Consulting Services
described in paragraph 2 hereof and the Finder's Services described in
paragraph 4 hereof for the period commencing on the date of execution and
delivery of this Agreement by the Company and ending five (5) years thereafter
(the "Consulting Period").
2. Description of Acquisition Consulting Services. The Acquisition
Consulting Services rendered by Consultant hereunder shall consist of
consultations with management of the Company, as such management may from time
to time require, during the term of this Agreement. Such consultation with
management shall be with respect to the review and analysis of potential
acquisition candidates identified by the Company to Consultant or by the
Consultant to the Company, and, upon selection of acquisition candidates,
assistance in the structuring and negotiation of such acquisition.
3. Compensation For Acquisition Consulting Services. The Company shall
compensate the Consultant for the Acquisition Consulting Services rendered
hereunder at the rate of $4,000 for each person/day. A "person/day" shall mean
eight person/hours of one or more representatives of Consultant and shall
include domestic travel time. In the event that the Company, through its board
of directors, determines that the cash payments enumerated herein above for
the Acquisition Consulting Services would significantly deplete the cash
reserves of the Company or if the Company is unable at any time to pay the
cash compensation due to Consultant for the Acquisition Consulting Services
pursuant to this Agreement, it may notify Consultant of such determination
and, upon receipt of written consent from Consultant may, thereafter, until it
is determined that cash payments would not significantly deplete cash
reserves, provide such compensation to Consultant through the issuance of its
common stock ("Share Compensation"). The right to such Share Compensation
shall automatically vest in the Consultant twenty-four hours after any
compensation due Consultant hereunder has not been paid by the Company. For
purposes hereof, any shares of the Company's common stock issued to Consultant
as Share Compensation shall be valued at 50% of the previous 30 days average
closing bid price per share, for the Company's common stock, as quoted on the
National Association of Securities Dealers, Inc.-Automated Quotation System or
Bulletin Board System and shall, at the election of Consultant, at least once
a year, be registered for resale at the expense of the Company under an
appropriate registration form pursuant to the Securities Act of 1933, as
amended. In addition, the shares of the Company's common stock issued to
Consultant as Share Compensation shall possess "piggy back" registration
rights with respect to any offering undertaken by the Company pursuant to a
registration under the Act.
4. Finder Services. Consultant, through its partners shall provide the
Company with finder services ("Finder Services") which would include the
location and introduction to the Company of parties that:
A. Provide financing to G/O or any of its subsidiaries or
affiliates or who are provided financing by G/O or any of its
subsidiaries or affiliates ("Financing Finder Services");
B. Acquire the securities or substantially all of the assets of
G/O or any of its subsidiaries or affiliates or whose securities
or substantially all of its assets are acquired by G/O or any of
its subsidiaries or affiliates ("Acquisition Finder Services"); or
C. Enter into any agreement with G/O respecting the licensing,
joint venturing or other mutual exploitation of any asset of G/O
or such party ("Collaboration Finder Services")
5. Compensation for Finder Services. Finder's fees payable under this
Agreement shall be payable by G/O to Consultant with respect to or in
connection with each and every transaction undertaken by G/O as provided
herein, and shall be payable as follows:
A. Financing Finder Services. Except with respect to any
financing provided to G/O by entities specified in exhibits to this
Agreement, which will be current sources of financing identified by G/O,
if any financing is provided to G/O, during the of term of this
Agreement, or for a period of three (3) year after termination of this
Agreement, provided such source of financing results from parties
identified by Consultant during the term of this Agreement, G/O will pay
to Consultant a Finder's Fee equal to 5% of the total amount of the
Financing (gross proceeds, without offset for costs or fees). In
addition, upon the completion of any financing, G/O shall grant to
Consultant options, to purchase that number of shares of G/O's common
stock determined by dividing fifteen percent (15%) of the amount of the
Financing by an amount equal to fifty percent (50%) of the previous 30
days average closing bid price for G/O's common stock, as quoted by the
National Association of Securities Dealers, Inc.- Automated Quotation
System or Bulletin Board System. Such options shall be exercisable for a
period of five years at an exercise price equal to 50% of the previous
30 days average bid price for G/O's common stock, as quoted by the
National Association of Securities Dealers, Inc.-Automated Quotation
System or Bulletin Board, as of the date of closing the financing and
shall possess demand and piggy back registration rights including the
right to include such shares in any offering undertaken by the Company.
B. Acquisition or Collaboration Finder Services. Except with
respect to parties specified in an exhibit attached to this Agreement,
if an Acquisition or Collaboration is consummated by G/O during the term
of this Agreement or for a period of three year thereafter, provided
such Acquisition or Collaboration involves a party identified by
Consultant during the term of this Agreement, G/O will pay to Consultant
a Finder's Fee based on the following formula:
Finder's Fee Rate Transaction Value
15% of the portion below $9,999,999
plus 12% of the portion from $10,000,00 to $19,999,999
plus 10% of the portion from $20,000,000 to $29,999,999
plus 8% of the portion from $30,000,000 to $39,999,999
plus 6% of the portion from $40,000,000 to $49,999,999
plus 4% of the portion over $50,000,000
The Transaction Value represents the total value agreed to among the
parties to the transaction and will include any combination of equity
securities, net assets, goodwill, consulting fees, noncompetitive agreements,
equity or debt investments, royalties or any other form of payment, whether
contingent or firm. Any issuance of registered securities, in connection with
the transaction, would be valued at the closing public bid price of such
securities on the date of the closing the transaction. Any unregistered
securities that were issued with restrictive legends would be valued at 50% of
the closing public asked price of such class of securities on the date of
closing the transactions, or at such greater value as may be recorded for
accounting purposes in accordance with generally accepted accounting
principles. If Consultant and the Company disagree as to the Transaction
Value of any transaction, a Transaction Value shall be determined by an
independent appraisal performed at the mutual expense of Consultant and G/O by
an independent appraiser selected by Consultant and approved by the Company.
If the Finder's Fee includes Transaction Value amounts which are contingent
upon future event(s), such Finder's Fee will be paid either on the date such
contingent amounts are paid or on such earlier date that the contingent
amounts become fixed in value. If, however, the Transaction Value amount
shall not be contingent upon future events, but the consideration tendered in
such transaction shall not be paid in full at the consummation of such
transaction, Consultant shall receive payment within ten days after each date
on which any part of such consideration is paid or received by G/O or any of
it subsidiaries or affiliates in amounts equal in each case to the Finder's
Fee multiplied by the fraction the numerator of which is the amount of the
consideration received or paid by or to G/O or any of its subsidiaries or
affiliates on such date and the denominator of which is the total Transaction
Value.
In addition to the compensation set forth above, in the event that the Company
enters into a transaction as specified in this paragraph 5, then and in such
event, Consultant shall be paid an additional finder's fee equal to 25% of the
Company's issued and outstanding shares, through the grant of options on that
number of shares of the Company's common stock equal to 25% of the issued and
outstanding shares, on a fully diluted basis, as of the date of execution of
this Consulting Agreement (the "Options"). Such options shall be exercisable
at a cash price of $0.001 per share or on a net issuance basis for a period of
five years commencing upon the consummation of a transaction described in this
paragraph 5 and shall have anti-dilution rights satisfactory to Consultant. To
secure the performance of the Company hereunder, the Company shall execute and
deliver such Option to the Consultant upon execution and delivery of this
Agreement, a copy of which is attached hereto.
6. Compensation of Out-of-Pocket Expenses. The Company shall be
responsible for reimbursing Consultant for reasonable, accountable, out-of-
pocket expenses incurred in performing the services provided in this
Agreement. Such reimbursement would be in addition to any compensation for
services as provided herein above and would be payable in cash, unless
otherwise agreed among the parties, within 10 days after receipt of an invoice
from Consultant. Any expenses in excess of $500.00 in any calendar month for
which Consultant would be entitled to receive would require advance approval
by the Company provided; however, that ordinary and necessary domestic travel
expenses incurred by Consultant in the course of performing the services
enumerated herein, would not require such advance approval. The cost of all
foreign travel including airline ticketing, hotel accommodations and other
related travel costs shall, at the election of Consultant, be prepaid by the
Company. The Company shall be responsible for the fees of accountants,
outside legal counsel, other advisors and other services requested by the
Company when pursuing a transaction.
7. Non-exclusivity of Consultants Undertakings. The Company expressly
understands and agrees that Consultant shall not be prevented or barred form
rendering services of the same nature as or a similar nature to those
described in this Agreement, or of any nature whatsoever, for or on behalf of
any person, firm, corporation, or entity other than the Company.
8. Disclaimer of Responsibility for Acts of the Company. The obligations
of the Consultant described in this Agreement consists solely of the
furnishing of information and advice to the Company. In no event shall
Consultant be required by this Agreement to act as the agent of the Company or
otherwise to represent or make decisions for the Company. All final decisions
with respect to acts of the Company or its subsidiaries or affiliates. whether
or not made pursuant to or in reliance on information or advice furnished by
Consultant hereunder, shall be those of the Company or such subsidiary or
affiliates, and the Consultant shall under no circumstances be liable for any
expense incurred or loss suffered by the Company as a consequence of such
decision.
9. Limitation of Services. It is understood between the parties that
neither the Consultant nor any of its partners or principals are providing
legal service, accounting services nor security broker/dealer services, and
such services must be retained by the Company at its own cost and expense. It
is expressly acknowledged that Consultant will utilize its best efforts in
performing the services contemplated hereby but no representations are made as
to the ultimate success of any transaction or other action undertaken by the
Company.
10. Termination of Relationship. This Agreement shall, unless sooner
terminated as provided herein below, continue until for the duration of the
Consulting Period as defined in paragraph 1 hereinabove. Such term shall be
renewed upon mutual agreement of the parties. This Agreement shall terminate
upon the happening of any one of the following events:
A. Either Consultant or the Company 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 with ten
days after such notice.
B. Consultant shall have the right (but not the obligation) to
terminate this Agreement upon written notice to the Company if it
reasonably determines that the Company or any of its directors,
officers or controlling shareholders has engaged in any unlawful,
wrongful or fraudulent act.
C. Consultant shall have the right (but not the obligation) to
terminate this Agreement upon written notice to the Company if its
shall determine that any material facts concerning the Company
represented to it during the course of performing its services are
misstated or untrue or that the Company has intentionally failed
to provide Consultant with material facts concerning the Company.
In the event of Termination, Consultant shall be entitled to accrued
fees and expense reimbursements and shares otherwise payable shall be paid as
though this Agreement were not terminated.
11. Miscellaneous.
A. 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: Southwest Venture Reification, Inc.
00000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
To the Company: G/O International, Inc.
11849 Wink
Xxxxxxx, Xxxxx 00000
B. 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
communications among the parties hereto.
C. Amendment. This Agreement shall not be modified or amended
except by written agreement of the parties hereto.
D. Governing Law. Each of the provisions of this Agreement shall
be governed by and construed and enforced in accordance with the
laws of the State of Arizona, which shall have exclusive
jurisdiction over all disputes arising out of this agreement.
E. Counterpart. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same
agreement.
X. Xxxxx; Partial Exercise. No failure or delay by any party in
exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege.
G. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and
assigns. The Company shall have the right to assign this Agreement
to any parent or affiliate of the Company.
H. Waiver of Arbitration. The parties hereby waive any rights to
settlement of disputes between them by arbitration and agree that
the Company shall reimburse Consultant all legal cost or other
related cost incurred in connection with attempts to collect fees
due hereunder.
I. Penalty for Non-Payment. In the event that the Company fails to
timely make any payments due Consultant hereunder, which shall in
all cases be within ten days after payment is due or if no due
date is specified, within ten days after receipt of invoice from
Consultant, then and in such event, the amount due shall include
an immediate penalty equal to 50% of the accrued amounts due plus
an additional aggregating penalty equal to 10% of the accrued
amounts due for each month unpaid.
12. Indemnification and Hold Harmless. In connection with Consultant's
performing the services enumerated hereinabove, Consultant and its partners
and principals will to a great extent be relying on information provided the
Company and its officers and directors. Although Consultant will be reviewing
all materials provided to it in connection with performing its duties,
Consultant will not be conducting an independent "due diligence review".
Consequently, as a condition to Consultant's performing the task enumerated
herein, the Company and its officers and directors and each of them hereby
agree to indemnify and hold Consultant and its officers directors, partners
and principals harmless against any losses, claims, damages, liabilities and
expenses, whether joint or several and to defend them against any and all
actions or causes of actions or threats of actions to which they may become
subject and will reimburse them for any legal or other expenses including
attorney's fees and disbursements reasonably incurred by them in connection
with investigation, preparing or defending any actions commenced or threatened
or claim whatsoever whether or not resulting in any liability insofar as such
are based upon (a) any untrue statement or alleged untrue statement of a
material fact contained in any information provided to Consultant or (b) any
omission or alleged omission of a material fact necessary to make any
information provided to us not misleading.
In witness whereof, the undersigned parties hereto have executed this
Agreement on the dates set forth opposite their respective signatures.
Dated: ______________ G/O International, Inc., a Colorado corporation
By____________________________
Its President
Dated:_______________ Southwest Venture Reification, Inc., an Arizona
corporation
By___________________________
Xxxxx Xxxxxxxxxx, Director
