CONSULTING AGREEMENT
This
Consulting Agreement (the “Agreement”) is entered into
and effective this 1st day of February 2010 (the “Effective Date”) by and
between Foresight Capital Corporation, an Arizona corporation (“Consultant”), and
BioAuthorize Holdings, Inc., a Nevada corporation (“Client”).
Recitals
A. The
Consultant is in the business of providing advisory and consulting services
including investor relations, Corporate promotion and on-line communications,
identifying and evaluating business alliances, strategic options, business
combinations and merger and acquisition candidates, providing advice on
financial structure and capitalization, provide introductions to professional
analysts, money managers and capital raising intermediaries, and providing other
value-added services for the benefit of Client.
B. Client
is in the business of (i) the development and acquisition of applications for
mobile handheld devices and (ii) the implementation of its developed technology
solution for e-commerce transactions related to the delivery of voice-enabled
payment authorization services to merchants and their customers in processing
payments for purchases made over the Internet (the “Business”); and
C. Client
desires to engage Consultant, and Consultant desires to be engaged by Client
upon the following terms and conditions.
Agreement
NOW
THEREFORE, in consideration of the premises, the mutual promises contained
herein and other good and valuable consideration, the parties agree as
follows:
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1.
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Services. The
Consultant shall provide services as reasonably requested by the Client as
follows:
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A.
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Consultant
shall assist and advise Client for the purpose of (i) developing an
investor relations program for Client, (ii) securing sponsorship of at
least two (2) market makers for Client’s shares of common stock which
trade on the OTCBB, (iii) providing advice on financial structure and
capitalization, (iv) provide introductions to professional analysts, money
managers and capital raising intermediaries, and (v) such other services
reasonably related to those set forth above as Client may
request. It is the intent of the parties that Consultant shall
be the lead participant in directing the activities contemplated by this
Section 1A. Services shall not include any activities that may
be deemed to be the offering, buying, selling or otherwise dealing or
trading in securities issued by another person including Client or the
giving of tax, legal, regulatory or other specialist
advice.
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B.
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Consultant
shall provide advice and assistance to Client in the preparation of
executive summaries, business plans and models, financial pro formas and
projections, and PowerPoint presentation materials reasonably necessary
for performance of the activities set forth in Section 1A above
(collectively Sections 1A and 1B are the “Services”).
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C.
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Consultant
shall not be required to undertake duties not reasonably within the scope
of advisory and consulting services in which it is generally
engaged. In the performance of its duties, Consultant shall
provide Client with the benefits of its best judgment and
efforts. It is understood and acknowledged by the parties that
the value of the Services is not measurable in a quantitative manner
except as otherwise provided for herein, and Consultant shall be obligated
to render the Services in good faith as shall be determined by
Consultant.
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2.
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Due
Diligence. Consultant shall conduct a review and
evaluation of Client, including its business, operations, properties, and
financial condition, as reasonably required for performance of the
Services (the “Due
Diligence”).
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3.
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Term. Client
hereby retains Consultant for a period of approximately (12) months from
the Effective Date until February 1, 2011 (the “Term”), and this
Agreement is renewable thereafter upon the written election of the Client
upon terms and conditions agreed to by the parties. At the
conclusion of this Agreement, or its termination, all materials, data,
documentation and information provided by the Client to Consultant shall
be returned to the Client and Consultant shall deliver to the Client all
completed, uncompleted and partially completed deliverables that are
prepared through performance of the Services. All compensation due and
owing for Services satisfactorily provided and completed through the date
of termination shall be paid to Consultant immediately upon
termination.
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4.
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Consulting Fee and Expenses.
Client agrees to pay to Consultant a Consulting Fee
payable in shares of the Company’s Common Stock as
follows:
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A. Lump Sum Fee. A total
of 1,000,000 unregistered and restricted shares of common stock of Client (the
“Shares”) which shall
be issued to Consultant promptly upon the Execution Date and shall be earned at
the conclusion of each period as follows:
(1) 250,000
of the Shares on March 1, 2010;
(2) 68,182
of the Shares on the first day of each month beginning on April 1, 2010 and
ending on February 1, 2011.
The
Shares shall be held in escrow by Client and a certificate representing the
corresponding number of the Shares for each period set forth above shall be
released and delivered to Client upon full performance of the Services during
each corresponding period. Although issued at the Effective Date, the
number of Shares for each corresponding period are only earned upon full
performance at the conclusion of each period noted above and are not
substantially vested prior to that time. Consultant shall
forfeit the number of Shares for each corresponding period upon failure to make
full performance of the Services for such corresponding period.
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B. Monthly Retainer
Amount. A monthly retainer amount equal to $10,000 due in
arrears at the conclusion of each monthly period beginning March 1, 2010 and
ending February 1, 2011 (each a “Monthly Retainer”).
Notwithstanding the foregoing provision, Consultant acknowledges that as of the
Effective Date, Client does not have the financial means to pay the Monthly
Retainer in cash, and the parties agree that each unpaid Monthly Retainer shall
be deferred and accrued until such time that Client, in its sole discretion,
determines that it has the financial ability to make such
payments. Such deferral in payment of the Monthly Retainer shall not
be an event of default under this Agreement. Each Monthly Retainer
shall be earned only upon full performance of the Services during each
corresponding period. At Consultant’s election and in Consultant’s sole
discretion, each Monthly Retainer may be paid in unregistered and restricted
shares of Client’s Common Stock at the rate of one (1) share for each one (1)
dollar of the Monthly Retainer due and owing (e.g. 10,000 shares per
month).
C. Expenses. Client
shall reimburse the Consultant for all out of pocket expenses reasonably
incurred in connection with performance of the Services described in Paragraph 2
including, but not limited to, professional time, travel expenses, computer
services, research, and printing. Consultant shall seek pre-approval of all
travel and professional expenses that exceed $300 in the aggregate prior to
incurring such expenses. Consultant shall provide the Client with a
statement of such expenses and shall be reimbursed at Consultant’s election in
unregistered and restricted shares of Client’s Common Stock at the rate of one
(1) share for each one (1) dollar of expense or in cash at the time that Client,
in its sole discretion, determines that it has the financial ability to make a
cash payment for the expenses. It is estimated that expenses could be
as much as $300. Expenses are paid in addition to the Consulting Fees
as set forth above. At Client’s election and in Client’s sole discretion, all
Expenses may be paid in shares of Client’s Common Stock.
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5.
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Investor Representation
Letter. With regard to the Shares to be issued to
Consultant, Consultant agrees to execute the Investor Representation
Letter in form attached hereto as Exhibit
A.
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6.
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Confidentiality and
Nondisclosure. Consultant agrees to use all non-public
information provided to it by or on behalf of the Client hereunder solely
for the purpose of providing the services and deliverables which are the
subject of this letter Agreement and to treat all such information
confidentially, provided that
nothing herein shall prevent Consultant from disclosing any such
information with the Client’s prior written consent (i) pursuant to the
order of any court or administrative agency or in any pending legal or
administrative proceeding, (ii) upon the request or demand of any
regulatory authority having jurisdiction over Consultant or any of its
affiliates, (iii) to the extent that such information becomes publicly
available other than by reason of disclosure by Consultant or was or
becomes available to Consultant or its affiliates from a source which is
not known by Consultant to be subject to a confidentiality obligation to
the Client, or (iv) to Consultant's affiliates and its and their
respective employees, legal counsel, independent auditors and other
experts or agents who need to know such information in connection with the
services and deliverables under this Agreement. Consultant accepts
responsibility for compliance by the persons referred to in clause (iv)
above with the provisions of this
paragraph.
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7.
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Binding Effect,
Assignment. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of each of the parties
hereto and their permitted successors and assigns. Any
attempted assignment of this Agreement shall be void and of no effect
unless the written consent of the other party is obtained prior to such
assignment.
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8.
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Governing Law and Dispute
Resolution. This Agreement
shall be interpreted and construed in accordance with the laws of the
State of Arizona. The parties, their heirs, agents and
any other persons having or claiming to have a legal or beneficial
interest in this Agreement, including court-appointed trustees and
receivers agree to settle by arbitration any controversy between or among
them and/or any of their parents, subsidiaries, affiliates, officers,
directors, employees or agents relating to this Agreement, including any
controversy over the arbitrability of a
dispute.
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Such
arbitration will be conducted by, and according to the rules and regulations
then in effect of, the American Arbitration Association (AAA) in Phoenix,
Arizona. If arbitration before the AAA is unavailable or impossible
for any reason, then the parties agree to have a court of competent jurisdiction
appoint a single arbitrator to resolve any and all disputes or controversies
between or among them. Each party shall bear its own initial
arbitration costs, which are determined by the rules and regulations of the
arbitration forum. In the event of financial hardship, the
arbitration forum may waive certain costs in accordance with such
rules. At the conclusion of the hearing, the arbitrators will decide
to assess the costs of the arbitration among the parties.
Any award
the arbitrator makes shall be final and binding, and judgment on it may be
entered in any court having jurisdiction. This arbitration provision
shall be enforced and interpreted in accordance with applicable federal laws of
the United States, including the Federal Arbitration Act. Any costs,
fees or taxes involved in enforcing the award shall be fully assessed against
and paid by the party resisting enforcement of said award.
All
notices from one party to the other involving arbitration shall be considered to
have been fully given when so served, mailed by first-class, certified or
registered mail, or otherwise given by other commercially accepted medium of
written notification.
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9.
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Notice. Any
notice or other communication required or permitted to be given hereunder
shall be deemed given if sent by first class mail, registered or certified
postage prepaid, or delivered in person or by facsimile transmission (with
the mailing of the original thereof within one (1) business day
thereafter), addressed as follows:
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Foresight
Capital Corporation
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00000
X.000xx
Xxxxxx
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00000
X. 00xx
Xxxxxx, Xxxxx 000
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Xxxxxxxxxx,
XX 00000
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Xxxxxxxxxx,
XX 00000-0000
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Attn: Xxxxxxx
Xxxxxxx
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Attn:
Yada Xxxxxxxxx
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Facsimile
No. 000-000-0000
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Facsimile
No. ______
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10.
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Modification
Waiver. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter
hereof. This Agreement may only be modified by a writing signed
by both parties. No waiver of any provision of this Agreement
shall be deemed to constitute a waiver of any other provision hereof and
any such waiver shall not constitute a continuing
waiver.
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11.
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Headings. Paragraph
heading are for convenience of reference only and shall not be considered
part of this Agreement.
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12.
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Severability. If
any one or more provisions of this Agreement is declared to be void by a
court of competent jurisdiction, the remaining provisions shall remain in
full force and effect.
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13.
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Attorney’s
Fees. If either party institutes legal proceedings
against the other arising out of this Agreement, the prevailing party
shall be entitled to reasonable attorney’s fees and costs of litigation as
fixed by the court or arbitrator in such
action.
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14.
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Third
Parties. This Agreement is for the exclusive benefit of
the parties hereto and their permitted successors and
assigns. No benefit is intended to be conferred upon any other
person whatsoever.
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15.
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Facsimile Execution and
Counterparts. For the convenience of the parties,
this Agreement may be executed and delivered by facsimile transmission of
the signature(s) of such party(ies) and shall be binding upon such party
by such facsimile transmission of a manually signed copy of this Agreement
to the other party. This
Agreement and any amendments hereto may be executed in any number of
counterparts, all of which together shall constitute a single, original
instrument.
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16.
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Indemnification. The
Client agrees to indemnify and hold Consultant harmless from and against
any losses, claims, damages, or liabilities (or actions, including
security holder actions, in respect thereof) related to or arising out of
Consultant’s engagement hereunder or Consultant’s role in connection
herewith, and will reimburse Consultant for all reasonable expenses
(including reasonable legal fees) as they are incurred by Consultant in
connection with investigating, preparing for or defending any such action
or claim, whether or not in connection with pending or threatened
litigation in which Consultant is a
party.
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17.
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Matters Relating to
Engagement. The Client acknowledges that Consultant has
been retained solely to provide the Services set forth in this
Agreement. In rendering such Services, Consultant shall act as
an independent contractor, and any duties of Consultant arising out of its
engagement hereunder shall be owed solely to the Client. The
Client further acknowledges that Consultant may perform certain of the
Services described herein through one or more of its affiliates with the
Client’s prior written consent which shall not be unreasonably withheld,
and such affiliates shall be entitled to the benefits of this Agreement.
Client acknowledges that Consultant is in the business of providing
advisory and consulting services to others. Nothing in this
Agreement shall be construed to limit or restrict Consultant in conducting
such advisory and consulting services to others. The Client
further acknowledges that Consultant may exercise powers and otherwise
perform its functions in connection with fiduciary or other relationships
it may have with entities that may have affiliations with Client, subject
to its relationships with the Client
hereunder.
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18.
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Authority to Perform and
Authorization. The Client hereby represents and warrants
(i) that it is duly organized and validly existing under the laws of the
jurisdiction of its creation with full power and authority to conduct
business as it is presently being conducted, and to own or lease, as
applicable, its assets and properties, (ii) that it is duly qualified to
do business as a foreign entity and is in good standing in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities make such qualification necessary, except where
the failure to be so qualified or in good standing would not have a
material adverse effect on the Client, and (iii) that it has full power
and authority to enter into this Agreement including the performance of
the obligations hereunder and has taken all action necessary to carry out
the transactions contemplated under this
Agreement.
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19.
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Survival. The
provisions of Sections 4B, 6, 7 and 8 shall survive any termination of
this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.
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Consultant:
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Client:
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Foresight
Capital Corporation,
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an
Arizona corporation
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a
Nevada corporation
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By:
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/s/ Xxxxxxx Xxxxxxx
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By:
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/s/ Yada Xxxxxxxxx
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Xxxxxxx
Xxxxxxx
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Yada
Xxxxxxxxx
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President
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President
& CEO
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[Executed
on February 11, 2010]
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6
Exhibit
A
Investor
Representation Letter
This Investor Representation Letter is
dated effective this 1st day of February 2010. BioAuthorize Holdings,
Inc., a Nevada corporation, (the “Company”) has entered into a
Consulting Services Agreement with Foresight Capital, Inc., an Arizona
corporation, dated February 1, 2010 (the “Agreement”) with regard to
the performance of certain consulting services as set forth in the
Agreement. Under provisions of the Agreement, the Company agrees to
compensate Consultant for performance of the consulting services by issuing
shares of the Company’s Common Stock on the terms and conditions set forth in
the Agreement (the “Shares”).
As a condition to the Company issuing
the Shares to Consultant, Consultant represents and warrants as
follows:
(a)
Respecting the Company, its business, plans and financial condition, and any
other matters relating to issuance of the Shares: the Consultant has received
all materials which have been requested by the Consultant including copies of
the most recent report filed by the Company with the Securities and Exchange
Commission on Form 10-K for the year ending December 31, 2009 and on Form 10-Q
for the interim period ending September 30, 2009; has had a reasonable
opportunity to ask questions of the Company and its representatives; and the
Company has answered all inquiries that the Consultant or the Consultant's
representatives have put to it. The Company undertakes no obligation
to update, review or revise any forward-looking statements to reflect any change in the Company's expectations or
any change in events, conditions, circumstances or assumptions on which any such
statements are based. The Consultant has had access to all additional
information necessary to verify the accuracy of the information set forth in
this Agreement and any other materials furnished herewith, and has taken all the
steps necessary to evaluate the merits and risks of an investment as proposed
hereunder.
(b) The
Consultant is an “accredited investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933 (the “Act”), and Consultant is
experienced in evaluating and investing in newly organized technology companies
such as the Company. The Consultant has such knowledge and experience in
financial and business matters to enable the Consultant to evaluate the merits
and risks of an investment in the Shares, to make
an informed investment decision with respect thereto, and can afford to bear
such risks, including, without limitation, the risks of losing its entire
investment in the Shares.
(c) The
Consultant acknowledges, agrees and recognizes that neither the Company nor any
of its affiliates or agents or consultants have made any representation or
warranty concerning the Company's financial results, upon which the Consultant
is relying in accepting the issuance of the Shares. The Consultant is
subscribing for the Shares based solely upon the Consultant's own independent
analysis of the Company's business and the historical financial information
provided.
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(d) The
Consultant is aware that the Shares have not been registered under the Act, that the Shares will be issued on the basis of the
statutory exemption provided by Section 4(2) of the Act or Regulation D
promulgated thereunder, or both, relating to transactions by an issuer not
involving any public offering and under similar exemptions under certain state
securities laws, that this transaction has not been reviewed by, passed on or
submitted to any Federal or state agency or self-regulatory organization where
an exemption is being relied upon, and that the Company's reliance thereon is
based in part upon the representations made by the Consultant in this Investor
Representation Letter. The Consultant acknowledges that the Consultant has been
informed by the Company, or is otherwise familiar with, the nature of the
limitations imposed by the Act (and applicable state securities laws) and the
rules and regulations thereunder on the transfer of securities. In particular,
the Consultant agrees that no sale, assignment or transfer of any of the Shares
shall be valid or effective, and the Company shall not be required to give any
effect to such sale, assignment or transfer, unless (i) such sale, assignment or
transfer is registered under the Act (and applicable state securities laws), it
being understood that the Shares are not currently registered for sale and that
the Company has no obligation or intention to so register the Shares, except as
contemplated hereunder or (ii) the Shares is sold, assigned or transferred in
accordance with all the requirements and
limitations of Rule 144 under the Act, it being understood that Rule 144 is not
available at the present time for the sale of the Shares, or (iii) such sale,
assignment or transfer is otherwise exempt from the registration under the Act
(and applicable state securities laws). The Consultant further understands that
an opinion of counsel and other documents may be required to transfer the
Shares. The Consultant acknowledges that the certificates evidencing the Shares
shall bear the following, or a substantially similar legend, and such other
legends as may be required by state blue-sky laws:
"The
securities represented by this certificate have not been registered under the
Securities Act of 1933, or any state securities laws and neither such securities
nor any interest therein may be offered, sold, pledged, assigned or otherwise
transferred unless (1) a registration statement with respect thereto is
effective under the Act and any applicable state securities laws, or (2) the
Company receives an opinion of counsel to the holder of such securities, which
counsel and opinion are reasonably satisfactory to the Company, that such
securities may be offered, sold, pledged, assigned or transferred in the manner
contemplated without an effective registration statement under the Act or
applicable state securities laws."
(e) The
Consultant is acquiring the Shares for investment for its own account and not
with the view to, or for resale in connection with, any distribution thereof or
the granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting
participations therein.
(f) The
Consultant acknowledges that a limited trading market for the Company's Common
Stock and the Shares presently exists and it is uncertain that a more active
market for the Common Stock or the Shares will develop in the future, and that
the Consultant may find it impossible to liquidate the investment at a time when
it may be desirable to do so, or at any other time.
(h) The
Consultant is not relying on the Company with respect to the tax and other
economic considerations of an investment in the Shares.
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(i) The
Consultant acknowledges that the representations, warranties and agreements made
by the Consultant herein shall survive the execution and delivery of this
Investor Representation Letter.
(j) All
action (if any) on the part of the Consultant necessary for the authorization,
execution, delivery and performance by the Consultant of this Investor
Representation Letter has been taken, and this Agreement constitutes a valid and
binding obligation of the Consultant, enforceable in accordance with its
terms.
(k) There
are no registration rights for the Shares.
Consultant:
Foresight
Capital, Inc.,
an
Arizona corporation
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By:
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/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Its: President
& CEO
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