EXHIBIT 10.1
STOCK TRANSFER AND CONSULTING AGREEMENT
THE FOLLOWING AGREEMENTS are made effective this 31st day of March, 2003 (the
"Effective Date") by and between CONSOLIDATED AMERICAN ENERGY RESOURCES, INC.
("Consolidated"), whose principal offices are located at 000 Xxxxxx Xxxxxx,
Xxxxx #000 Xxxxxx, XX 00000 and XXXXXXX X. XXXXXXXX ("XxXxxxxx"), whose
principal offices are located at 0000 Xxxxxxxx Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000.
PURPOSES: The parties desire to enter into the following Stock Transfer
Agreement and to cause certain financial adjustments to be made by Availent
Financial, Inc. of which XxXxxxxx is presently a Director, Officer (President)
and Stockholder. In addition they agree to enter into, and to use their best
efforts to cause Availent to enter into the Consulting Agreement, as set forth
below. The execution of the Stock Transfer is a condition precedent to
Consolidated's obligation to enter into its Consulting Agreement as set forth
below. They further agree to cause all of these agreements to he ratified by
Availent.
RECITALS
A. WHEREAS Consolidated is experienced in providing corporate financial and
investment banking consulting services.
B. WHEREAS Consolidated has developed relationships with brokers, institutional
investors, investment bankers, financial public relations firms and individual
accredited investors which may assist XxXxxxxx in the corporate restructuring
and possible debt and equity financing of AVAILENT FINANCIAL, INC. ("Availent"
or the "Company").
C. WHEREAS according to the unaudited financial statements of Availent (updated
by the Company on March 20, 2003, hereinafter referred to as the "Financial
Statements"), Availent's negative net worth was ($3,474,069) and ($4,256,117) on
December 31, 2002 and February 28, 2003, respectively. According to the
Financial Statements, Availent lost ($3,016,310) for the fiscal year ending
December 31, 2002 and lost ($782,048) for the two months ending February 28,
2003.
D. WHEREAS, XxXxxxxx in consideration of Consolidated's best efforts
participation in the corporate restructuring and possible future equity and/or
debt financing of Availent, XxXxxxxx agrees to the following:
NOW THEREFORE, in consideration of the mutual promises, covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged, Consolidated and XxXxxxxx agree
as follows:
(1) XxXxxxxx does hereby agree to transfer and convey all (1,685,221 more
or less) of the common shares of Availent (the "Shares") owned by
XxXxxxxx (this specifically excludes the 374,434 shares owned directly
by Xxxxxxx XxXxxxxx which now charge piggyback registration rights) to
Consolidated and Consolidated's agents and assigns, or Consolidated's
order,
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effective immediately upon execution of this Agreement and any other
agreement deemed by Consolidated to be necessary to effectuate said
transfer of Shares. Further XxXxxxxx agrees to notify the escrow agent
of the transfer of Shares to Consolidated, said escrow agent is
currently holding the Shares in accordance with the Loan Agreement
between Availent and Xxxxx Xxxx dated February 12, 2003. In addition,
immediately upon receipt of written instructions from Consolidated,
XxXxxxxx agrees to notify Availent's Stock Transfer Agent of the
transfer of Shares to Consolidated, its agents and assigns.
[2] XxXxxxxx does hereby agree to convert all principal balances
owed to him and his wife (Xxxxxxx XxXxxxxx) as evidenced by
Notes Receivable (the "Notes") from Availent into Availent
common shares at the price of $1.00 per share. As of March
28, 2003, Availent owed XxXxxxxx and his wife $615,000. These
Notes Receivable amounting to $615,000 are hereby converted to
equity at $1.00 per share in the amount of 615,000 shares with
piggyback registration rights.
[3] XxXxxxxx and Xxxxxxx XxXxxxxx do hereby agree to forgive
immediately as of March 28, 2003 any and all interest accrued
and unpaid on the Notes (see Section 3 above), now and
forevermore.
[4] XxXxxxxx does hereby agree to forgive immediately any and all
deferred compensation payable to him by Availent as of March
28, now and forevermore. Said deferred compensation amounts
to $48,9l6 + FICA for FY 2001, $130,035 + FICA for FY 2002
and approximately $47,500 + FICA for FY 2003 (total is
$226,451 plus FICA).
[5] To immediately elect up to five additional directors to
Availent's Board of Directors, said five directors to be
chosen and nominated by Consolidated, at Consolidated's
request.
E. Consolidated, as further consideration for XxXxxxxx'x agreement and
performance as shown in Section D. [1] thru [5] above and elsewhere in this
agreement, does hereby agree to use its best efforts to have Availent issue and
execute an Employment Agreement, an Executive Stock Option Plan and an
Executive Performance Bonus Plan with the provisions as shown below. Note that
the aforementioned agreements and all provisions contained therein arc subject
to review and approval of Availent's general counsel and Board of Directors:
[1] Annual salary, pay to commence immediately as of March 30,
2003, every two weeks, payable in arrears. XxXxxxxx'x annual
salary is $100,000.
[2] A Quarterly Bonus Plan (the "Bonus Plan") for the Executives
of Availent as designated by the Board of Directors equal to
5% of the Net Income Before Taxes (in accordance with GAAP)
of Availent Financial up to $5 million Net Income Before Taxes
annually, payable within 45 days subsequent to the end of the
quarter. Should Net Income Before Taxes exceed $5 million per
annum, the executives shall be paid 2% of any NIBT in
excess of $5 million.
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(3) The term of employment is 5 years, from March 31, 2003 to
March 31, 2008.
(4) XxXxxxxx will retain the title of President of Availent.
(5) XxXxxxxx will participate in a stock option plan with the
participants limited to whatever employees of Availent that
are dictated by Federal statutes and ERISA. XxXxxxxx'x minimum
participation in the ESOP under any and all circumstances will
be 40% of the total options. The ESOP will provide for the
issuance in the aggregate of at least 5% of the total common
shares issued and outstanding of Availent for three years as
of fiscal year end 2003, 2004 and 2005. For purposes of
calculating the number of shares issued and outstanding,
December 31 will be utilized. 50% of the options shall be
earned automatically. 25% of the options shall be earned as
annual gross revenue target amounts are achieved (amounts to
be determined) for FY 2003, 2004, 2005. 25% of the options
shall be earned according to Net Income Before Tax target
amounts (to be determined) for FY 2003, 2004, 2005. These
options will be cashless exchange options and will vest 100%
as earned.
(6) Consolidated does hereby agree to use its best efforts to
facilitate Availent's payment to XxXxxxxx for reimbursable
expenses in the aggregate amount of $54,445.25. The future
payments related to these charge cards are subject to and
conditional upon an audit.
F. The services provided herein are to be provided on a "best efforts"
basis directly and through the Consolidated's officers, agents or
others employed or retained by and under the direction of Consolidated
provided however, that the services shall expressly exclude all legal
advice, accounting services or any other services which require
licenses or certification which Consolidated does not possess.
G. Should further documents be reasonably required to affect the purposes
to these agreements and the assent of either or both of the parties be
necessary then they hereby agree to execute such agreements.
CONSULTING AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged, Consolidated and McGenney agree
as follows and to cause Availent to ratify, approve and enter into the following
agreement:
1. SCOPE OF REPRESENTATION. Consolidated shall provide the corporate
consulting restructuring and financing services detailed in Sections D and E
of the Stock Transfer Agreement as set forth above and Section 2 of this
agreement as set forth below (the "Services").
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2. CONSOLIDATED'S EXPENSES. Expense reimbursement shall be covered in a
separate consulting agreement between Consolidated and its agents and assigns
and Availent. Availent and Consolidated agree that such agreement shall provide
for the recovery by Consolidated of all of its reasonable and necessary expenses
incurred in the performance of Consolidated's efforts to affect the purposes of
this and future agreements entered into for the benefit of Availent. The
reasonable necessity for such expenses shall be presumed until established
otherwise.
3. INDEPENDENT CONTRACTOR: No Power to Bind. Consolidated and its
agents and assigns are not employees of XxXxxxxx nor Availent any purpose
whatsoever, but are independent contractors. XxXxxxxx is interested only in the
results obtained by Consolidated, and Consolidated shall have, subject to the
terms of this Agreement, sole control of the manner and means of performing
under this Agreement.
4. COMPENSATION. The transfer of shares as set forth in Section D. [1]
herein shall constitute Consolidated's compensation. Any additional compensation
to be paid to Consolidated for its consulting services will be set forth in a
separate agreement with Availent.
5. TERM. The term of this Agreement shall be for 12 (twelve) months
from the date of execution of this Agreement.
6. WARRANTIES AND REPRESENTATIONS OF CONSOLIDATED. Consolidated
represents, warrants and covenants to XxXxxxxx that it will at all times during
the term of this Agreement satisfy the following warranties and representations.
(a) Consolidated shall at all times comply with any and all applicable
federal, state, local or foreign securities laws, rules and regulations in its
performance hereunder. Consolidated will disclose in all reports,
communications, etc. that it is a consultant of Availent that it is being
compensated by Availent and is a shareholder of Availent. Specifically, that
Consolidated will at all times comply with the requirements of Section 17(b) of
the Securities Act and will not solicit the purchase or sale of any securities
of Availent without disclosing any compensation arrangement and the exact number
of shares held by Consolidated and any shares held by related parties as defined
in the Securities Act of 1933, as amended.
(b) Consolidated shall at all times comply with all federal, state and
foreign laws and all applicable rules, regulations and orders of any court,
government or any unit or agency thereof in connection with performing its
duties under this Agreement.
(c) Consolidated acknowledges that the services to be provided
pursuant to this Agreement and the receipt, retention and disposition of the
compensation to be paid to Consolidated under this Agreement are subject to
applicable securities laws, including the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), shall at all times comply
with all applicable securities laws in connection with performing its duties
under this Agreement and in connection with the receipt, retention and
disposition of the compensation to be paid to Consolidated under this
Agreement.
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(d) Consolidated is free to enter into this Agreement and the services
to be provided pursuant to this Agreement are not in conflict with any other
contractual or other obligation to which the Consolidated is bound.
(e) Consolidated is providing the Services on a best effort basis which
are based on its management's personal experience and expertise. There are no
guarantees warranties and representations (express or implied) of any kind that
its advice or Services will produce any specific results for the benefit of
XxXxxxxx or Availent. Actual results may substantially and materially differ
from those suggested by Consolidated.
(f) Consolidated represents and warrants to XxXxxxxx that: (i) it is
under no contractual restriction or other restrictions or obligations that are
inconsistent with this Agreement, the performance of its duties and the
covenants hereunder; (ii) its management is under no physical or mental
disability that would interfere with its keeping and performing all of the
agreements, covenants and conditions to be kept or performed hereunder; (iii) it
is familiar with all federal and state securities laws applicable to the
performance of its services as contemplated in this Agreement, including
Sections 17(b) of the Securities Act, Sections 9 and 10(b) of the Exchange Act
and Regulation PD; (iv) it will comply with all applicable federal and state
securities laws in the performance of the services under this Agreement; and (v)
it will cause any person to whom any of the Securities of the Company or other
compensation are transferred to agree and undertake for the benefit of the
Company to comply with all applicable federal and state securities laws in
connection with their ownership or disposition of the Securities (including
compliance with Section 17(b) of the Securities Act to the extent applicable).
(g) Consolidated acknowledges that it is in the business of consulting
and may provide consulting services and consulting advice (of the type
contemplated by this Agreement) to others and that nothing herein contained
shall be construed to limit or restrict the Consolidated in providing such
similar consultant type services to others, or rendering such advice to others.
7. WARRANTIES AND REPRESENTATIONS OF XXXXXXXX. XxXxxxxx agrees to
indemnify and hold Consolidated, its agents and assigns, harmless from any and
all claims, causes of action or liabilities of any nature whatsoever arising out
of this Agreement or the actions taken by Consolidated pursuant to the terms of
this Agreement, specifically including, but not limited too, any claims by other
Availent shareholders, regulatory authorities, financiers or any other person or
institution whose claim or claims are based upon the terms and conditions of
this Agreement.
8. NOTICE. Except as otherwise specifically provided, any notices to be
given hereunder shall be deemed given upon personal delivery, upon the next
business day immediately following the day sent if sent by overnight express
carrier, or upon the third business day following the day if sent by fax and
separately by postage prepaid by certified or registered mail, return receipt
requested to the following addresses (or such other address as shall be
specified in any notice given):
In case of Consolidated: CONSOLIDATED AMERICAN ENERGY RESOURCES, INC.
Xx. Xxxxx Xxxxxx, President
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000 Xxxxxx Xxxxxx, Xxxxx #000
Xxxxxx, XX 00000
In case of XxXxxxxx: XXXXXXX X. XXXXXXXX
0000 Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
In case of Availent: XXXXXXX X. XXXXXXXX
President
0000 Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
9. WAIVER OF BREACH. The waiver by a party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of this Agreement.
10. ASSIGNMENT. Except as otherwise provided herein, the rights and
benefits of the parties contained in this Agreement shall inure to the benefit
of and be binding upon the successors, assigns, administrators, and personal
representatives of the parties hereto. Consolidated's duties under this
Agreement can be delegated by the them to third parties who agree to act in
accordance with the terms and conditions of this Agreement.
12. ARBITRATION. Any controversy or claim arising out of or relating to
any interpretation, breach or dispute concerning any of the terms or provisions
of this Agreement, which disagreement is not settled within thirty days after it
arises, shall be settled by binding arbitration in Dallas, Texas in accordance
with the laws of the State of Texas and under the rules then obtaining of the
American Arbitration Association and judgment upon the award rendered in said
arbitration shall be final and may be entered in any court of the State of
Texas having jurisdiction thereof. Any party hereto may apply for such
arbitration.
13. ATTORNEYS FEES. In the event that an action at law or in equity is
brought to enforce the provisions of this Agreement or to prevent a breach
thereof, the successful party in such action or arbitration proceeding shall be
entitled to an award of attorney's fees and other costs as shall be established
by the court or pursuant to a binding arbitration proceeding.
14. HOLD HARMLESS AND INDEMNIFICATION. XxXxxxxx shall hold
Consolidated, its officers and directors harmless from and against any
liability, loss, cost, expenses or damages, including attorney's fees howsoever
caused by reason of any injury or loss sustained by or to any person or property
by reason of any actual or alleged wrongful act, misrepresentation or omission
by XxXxxxxx and Availent or its agents or representatives (other than the
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Consolidated). Consolidated shall hold the XxXxxxxx and Availent and its
management harmless from and against any liability, loss, cost, expenses or
damages, including attorney's fees, howsoever caused by reason of any injury or
loss sustained by or to any person or property by reason of any actual or
alleged wrongful act, misrepresentation or omission by the Consolidated or their
agents or representatives.
15. APPLICABLE LAW. This Agreement shall be construed as whole and in
accordance with its fair meaning. This Agreement shall be interpreted in
accordance with the laws of the State of Texas.
16. ENTIRE AGREEMENT. This Agreement, together with the documents and
exhibits referred to herein, embodies the entire understanding among the parties
and merges all prior discussions or communications among them, and no party
shall be bound by any definitions, conditions or warranties, or representations
other than as expressly stated in this Agreement, or as subsequently set forth
in writing, signed by the duly authorized representatives of all of the parties
hereto. This Agreement, when executed shall supercede and render null and void
any and all preceding oral or written understandings and agreements. This
agreement may be signed in counterparts.
17. NO ORAL CHANGE: WAIVER. This Agreement may only be changed,
modified, or amended in writing by the mutual consent of the parties hereto. The
provisions of this Agreement may only be waived in or by writing signed by the
party against whom enforcement of any waiver is sought.
18. CONFLICT OF INTEREST. Consolidated represents that it is not
presently aware of any conflicts of interest regarding the performance of the
Services in accordance with this Agreement.
19. SEVERABILITY. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, inoperative or unenforceable as applied in
any particular case because it conflicts with any other provision or provisions
hereof, or any other provision or provisions hereof, or any constitution or
statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable to any extent whatsoever. The invalidity of any one or more
phrases, sentences, clauses, sections or subsections of this Agreement shall not
affect the remaining portions of this Agreement.
20. INTERPRETATION. Each of the parties acknowledge that they have been
represented by independent counsel of their choice throughout all negotiations
that have preceded the execution of this Agreement, and that they have executed
the same with consent and upon the advice of said independent counsel. Each
party and their counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law,
including but not limited to any decision that would require interpretation of
any ambiguities in this Agreement against the party that drafted it, is of no
application and is hereby expressly waived. The provisions of this
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Agreement shall be construed as a whole and in accordance with its fair meaning
to affect the intentions of the parties and this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
March 31, 2003:
CONSOLIDATED AMERICAN ENERGY RESOURCES, INC.
BY: /s/ XXXXX MAFINA
------------------------------------------
XXXXX MAFINA, PRESIDENT
WITNESS:
NAME: (ILLEGIBLE)
----------------------------------------
ADDRESS: (ILLEGIBLE)
-------------------------------------
(ILLEGIBLE)
-------------------------------------
XXXXXXX X. XXXXXXXX XXXXXXX XXXXXXXX
By: /s/ XXXXXXX X. XXXXXXXX Agreed: /s/ XXXXXXX XXXXXXXX
--------------------------------------- --------------------------
XXXXXXX X. XXXXXXXX, INDIVIDUALLY AND
AS PRESIDENT OF AVAILENT FINANCIAL, INC.
WITNESS:
NAME: (ILLEGIBLE)
-----------------------------------------------
SECRETARY OF AVAILENT FINANCIAL, INC.
ADDRESS: (ILLEGIBLE)
--------------------------------------------
(ILLEGIBLE)
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