CONSULTING AGREEMENT
Exhibit
10.1
This
Agreement (“Agreement”) is made as of this 19th day of
October, 2008 by and between LIG Assets, Inc., a Nevada corporation having its
principal office at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000 (hereinafter
referred to as "Company"), and Xxxxxxx Xxxx (“Controlling Shareholders”) and
Going Public, LLC having its principal office at 00000 Xxxx Xxxxx Xxxxx, Xxxxx
000, Xxx Xxxxx, XX 00000 (hereinafter referred to as "Consultant").
In
consideration of the mutual promises contained herein and on the terms and
conditions hereinafter set forth, the Company, Controlling Shareholders, and
Consultant (collectively, the "Parties") agree as follows:
1. Services.
1.1.
Consultant shall prepare all corporate document preparation necessary to
achieve a quote listing on the OTC Bulletin Board ("OTCBB"), including corporate
structuring, a custom private placement memorandum (PPM) under Rule 506 of
Regulation D, filing the S1 registration, blue sky filings if applicable,
answering all comments and engaging a market maker to file the Form 211, thus
ultimately achieving a quote by such market maker on behalf of the Company. This
does not include business plan preparation, corporation set-up, state blue sky
fees (if applicable) or financial audit preparation. However, all legal opinions
and costs shall be performed by Consultant's attorney at Consultant's
expense.
1.2. Complete
financial report preparation and reorganization to meet GAAP and SEC
requirements
by an experienced public company CFO, in preparation for your
auditor.
1.3 Six (6) full months of consulting on all
financial compliance requirements of Sarbanes Oxley and other financial
issues.
1.4. Introductions
to additional Market Makers.
1.5. Introductions
to Investor Awareness (see paragraph 1.11, below) and Investor Relation
firms.
1.6. Introductions
To Broker Dealers, Investment Bankers and Underwriters.
1.7. Introductions
to SEC attorneys, PCAOB auditors and other specialized consultants as
needed.
1.8.
Review of and consultation regarding terms, structure, and contracts submitted
to Company by any of the above introductions and review of and consultation
regarding terms submitted by similar professionals whether or not introduced by
Consultant.
1.9. General
consulting assistance in securing relationships with all of the above as
needed.
1.10. General
consulting assistance in structuring and developing the Company and its business
plan for
flume growth and stability.
1.11. In
addition to the other services provided, Consultant hereby agrees to hire an
investor awareness company, for a non-invasive investor awareness campaign,
including, but not limited to, creation of a professional full-page company
profile, such profile to be featured on a high-traffic small cap stock website
with a guarantee of a minimum of 300,000 targeted, non-invasive, full-page
motile visits. In addition, Consultant may include Company on other stock
profile website(s) at our discretion Other services may be provided by other
promotional companies in addition to those discussed here, including but not
limited to press release re-distribution at Consultant's discretion without
notice. Such investor awareness campaign is non-transferable. The obligation of
Consultant as per this Paragraph will not be due this Company until Company is
publicly traded and until Consultant or it's designees have full unencumbered
possession of the equity position discussed in paragraph 2, below, and after
such shares are free trading.
2. Compensation
2.1.
Controlling Shareholders hereby agrees to pay a consultation fee of ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100.000.00) (US) as per the Addendum attached
hereto as Schedule A (the "Cash Fee") to Consultant for services as described in
paragraph 1, herein. This Agreement shall become effective upon the signature
execution by all parties. This Agreement shall become effective upon the signature execution by
all parties. All wires to Going Public are to be sent via the wire instructions,
below:
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9
2.1.1 Wire instructions
Walls
Fargo Bank Dallas, Texas
Routing
#000000000
Account
#2883986941
Account
Name: Going Public, X.XX
2.2.
Company understands and agrees that Consultant and/or Consultant's designees,
shall own an
equity position equal to TWENTY PERCENT (20%) ("Equity Position") of the total
outstanding Company common
stock upon becoming publicly trading.
2.4
Consultant may introduce Company to various proprietary and confidential
contacts of Consultant ("Contacts"). As such, Should Consultant make an
introduction to a Contact, directly or indirectly and the introduction to
Contact results in Company going public through a source other then. Consultant
and/or the Company receiving funding, all compensation due to Consultant under
this Agreement, including but not limited to the Cash Fee and Equity Fee
described herein. shall be due to Consultant immediately.
3. Services Not
included.
3.1.
This Consulting Agreement does not cover any of your legal cost if you decide to
have your own
attorney review Consultant's and Consultant's attorney's work.
3.2. This
Consulting Agreement does not cover any of your exchange listing fees, if
applicable, audited financial costs, blue sky fees, transfer agent fees,
corporate restructuring, corporation formation, online PPM hosting, quarterly
reports and other filing fees, and other related ongoing costs associated with
being a publicly traded company.
3.3.
General bookkeeping is
not included in Consultant's services. Client must have
up-to-date
accounting books and they must be in good order.
3.4.
Travel expenses related to on-site visits to complete Company's financial
reports, including
but not limited to airfare and lodging, if applicable.
4. Indemnification. Each
of the Parties to this Agreement hereby agree to protect, indemnify, defend and
hold harmless the other Party and its affiliated persons or entities from any
loss. liability, claim, damage, expense (including costs of investigation and
defense and reasonable attorneys' fees and expenses) arising out of or in
connection with a third-party claim of any kind against the other Party or its
affiliated persons or entities concerning any transactions in which other Party
participates as a result of or relating in any way to this Agreement.
Notwithstanding the foregoing, Company agrees to indemnify and defend Consultant
on any third-party claim arising from any act by Consultant undertaken in good
faith in accordance with the terms of this Agreement.
5. Liability. In no event
shall Consultant or its affiliated persons or entities be Liable to Company or
its affiliated persons or entities for any special, consequential, indirect,
incidental or punitive damages or lost profits, however
caused and on any theory a liability including negligence and strict liability)
arising in way out
of this Agreement, whether or not Consultant or Company has been advised of the
possibility of such damages.
6. Attorney fees. In any
litigation or other proceeding by which one party either seeks to enforce its
rights under this Agreement (whether in contract, tort, or both) or seeks a
declaration of any rights or obligations under this Agreement, the prevailing
party shall be entitled to recover from the other party all actual attorney's
fees, expenses, and caste incurred in good faith by the prevailing party. The
term "prevailing party" shall include any party who engages counsel and
subsequently obtains substantially the result sought, whether by compromise,
settlement or judgment.
7. Other
Activities. The Company recognizes that Consultant now
renders and may continue to render management and other services to other
companies, which may or may not have policies and conduct activities similar to
those of the Company. Consultant shall be free to render such advice and other
services and the Company hereby consents thereto. Consultant shall not be
required to devote its full time and attention to the performance of its duties
under this Agreement, but shall devote only so much of its time and attention as
it deems reasonable or necessary for such purposes, and shall have no obligation
to procure or generate a minimum amount of business, revenues, trading volume,
or share price increase for Company or its affiliated entities or
persons.
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9
8.Duties and
Obligations.
8.1. It is important that company and Controlling Shareholders
cooperate fully and timely with Consultant so as to enable Consultant to perform
he services. As Such, requests for due diligence documents and information will
typically be made via email from an employee, agent, consultant, or attorney of
Consultant. Company and Controlling Shareholders agree to provide general due
diligence documents requested and information to Consultant promptly, but no
later than 20 days from the receipt of request.
8.2.
Should Consultant introduce Company to financial firms, Company will act
diligently and promptly in reviewing materials submitted to it, and will forward
copies of any such materials to Consultants for its review.
8.3. Company
shall complete its audited financials through a PCAOB registered auditor no
later than two (2) months from the date of this Agreement
8.4.
If additional shareholders are required to bring total to at least 45, Company
agrees to complete a private offering through a Private Placement Memorandum
("PPM") under Regulation D Rule 506 in which the Company sells shares of its
stock to investors ("Private Offering'). Company agrees to complete the
Private
Offering no later than 45 days from the first day the PPM is received by
Company. The amount of funds to be raised and the price per share can be
determined by the Company, but Company agrees to a minimum investment of 10,000
shares at a minimum of two cents ($.02) per share ($200 investment) and shall
sell to enough investors to bring the total shareholders up to 45 or more. Real
consideration must be received from each investor.
Company shall
familiarize themselves with the rules of the Regulation D Rule 506 Offering,
which are set forth inn, the PPM. Company must keep careful records of all
checks, subscription
agreements, etc. for all investors. If any of the investors are United States
shareholders., simultaneously with the offering, state securities filings must
be undertaken in each state in which the offering is being sold to, which
Consultant will file for Company (fee must be paid separately by Company for
each state where investor lives). It is Company's responsibility to immediately
notify of and pay Consultant for each new state where the Rule 506 offering has
been sold upon receipt of payment and subscription agreement from investor so
that Consultant can file and pay the appropriate state blue sky fees on behalf
of Company.
8.5.
Should Company receive zero down financing from Consultant; Company will
immediately give written notice to Consultant of any change in the Company's
financial condition, or in the nature of its business or operations which had or
might have an adverse effect on its operations, assets, properties or prospects
of its business. Company will also inform Consultant of any outside parties that
are a potential investment, funding, merger or acquisition candidates and
forward copies of any such materials to Consultant for its review. Company will
give full disclosure of all material facts concerning Company to Consultant and
update such information cm a timely basis.
8.6. The
Company and Controlling Shareholders hereby agree that Company will pay all
compensation
due Consultant under the provisions of this Agreement, immediately when
due
9. Representations and
Warranties. Company represents and warrants to Consultant as
follows:
9.1. The
Company and its Controlling Shareholders have full power and authority to
execute this
Agreement and to perform all of its obligations hereunder.
9.2.
This Agreement has been duly executed by all duly authorized Controlling
Shareholders and the Company and is a legal and binding agreement of Company
enforceable against Controlling Shareholders and Company in accordance with its
terms.
9,3.
The Company hereby represent that neither the Company, nor any of its
shareholders have been convicted of any felony and/or any securities infractions
whatsoever that have not been already disclosed to Consultant in
writing.
9.4.
The business and operations of Company have been and are being conducted in all
material respects in accordance with all applicable laws, rules
and regulations of all authorities which affect the Company or its properties,
assets, businesses or prospects. The performance of this Agreement shall not
rattle in any breach of, or constitute a default under, or result in the
imposition of any lien or encumbrance upon any property of Company or cause
acceleration under any arrangement, agreement or other instrument to which
Company is a party or by which any of its assets are bound. Company has
performed in all respects all of its obligations which are, as of the date of
this Agreement, required to be performed by it pursuant to the terms of any such
agreement, contract or commitment.
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9
9.5.
The due diligence questionnaire attached hereto and entitled "Schedule
B—Confidential Due Diligence Form", has been duly executed by an authorized
Controlling Shareholder who has the full power and authority to execute such
attestation, and hereby attests to its accuracy and completeness.
10. Miscellaneous.
10.1.
Company understands that, although Consultant's services may include general
advice and consultation regarding general legal topics relating to the
consulting services to be rendered, particularly with impact to areas of
financial expertise of Consultant, the services rendered by Consultant do not
include the rendition of professional legal services or any specific legal
service, advice or consultation by Consultant or its employees.
10.2. Company understand that Consultant is not an underwriter or broker
dealer and that it performs
no underwriting function. Company further understands that Consultant's only
function with relation to any potential funding is as an introducing party.
Consultant shall not negotiate on behalf of Company with regard to potential
funding terms, nor will Consultant engage in sales efforts on behalf of Company
with regard to funding
sources. Company shall not offer cash or other compensation incentives to
Consultant as enticement to engage in sales efforts cm behalf of Company with
potential funding sources and Consultant shall not accept compensation for
introductions to or performance of finding sources. If introductions to funding
sources are made to Company by Consultant, Company understands and agrees that
it is the Company's responsibility to have its own independent
counsel review all potential funding terms documents and agreements submitted to
Company from funding
sources and that Constant shall not be held responsible in any way for any terms
of the agreements, actions, inactions, performance or lack thereof, or possible
wrongdoings of the Funding Sources or other introductions it makes to
Company.
10.3
Company understands that there are significant ongoing fees and costs related to
a ‘listing’
on the OTC Bulletin Board ("OTCBB") including but not limited to audited
financials, filings, requirements of the Xxxxxxxx-Xxxxx Act (if fully reporting)
and other increases legal and accounting fees that come from other enhanced
requirements related to trading on the OTCBB.
10.4. If
Company has no revenues or extremely low revenues, Company understands that they
will need to show proof to FINRA and/or SEC that they are a legitimate operation
company. As such, Company understands that they may potentially need to show
"proof" of real efforts to enact its business plan.
11. Non-Circumvention and
Non-Disclosure
00.0.Xxxxxxx
and its Controlling Shareholders hereby acknowledge and agree that all
introductions
effected by Consultant are the proprietary property of Consultant and integral
to its income. Company and controlling
Shareholders further agree not to disclose or otherwise reveal, to any third
party, any introductions or other confidential information provided by
emulation, particularly that concerning band managers or other funding sources,
market makers, investor relations Elms, broker dealers, investment tankers,
underwriters, SEC attorneys, SEC accountants, and other consultant's names,
addresses, telex/fax/telephone numbers or other means of access thereto,
including bank information, codes or references and/or such information,
provided to Company on a confidential or privileged basis, without the specific,
formal and written consent of Consultant. Any and all names, addresses,
telex/fax/telephone numbers, bank information, codes or references provided
shall be presumed to be confidential and shared on a need to know basis' only
with those subject to a like non-circumvention non-disclosure Agreement except
where otherwise agreed to in writing or required by law.
11.2.
Company and its controlling shareholders hereby irrevocably agree not to
circumvent, avoid, bypass, or obviate Consultant or .any of
Consultant's associates, including but not limited to employees or agents of
Company, market makers, funding sources, investor relations firms, broker
dealers, investment bankers, underwriters. SEC attorneys, SEC accountants, and
other consultant's of Consultant, directly or indirectly, to avoid payment of
foes Of commissions in any transaction with any corporation, partnership, or
individuals, revealed by Consultant to Company (excluding those previously known
to Company), in conjunction with any project, transaction, or any loans, or
collateral, or funding or addition, renewal, extension, rollover, amendment,
renegotiation, new contracts, parallel contracts/agreements, or third party
assignments thereof.
12.
Piggy-Back
Registration Rights Company agrees that if it proposes to register its
stock or other securities
under the Securities Act of 1933, as amended (the “Securities Act”), including
a. registration affected by the Company for shareholders, the Company shall, at
such time, promptly give Consultant written notice of such registration, if
Consultant or its designees hold shares of restricted stock. Upon the written
request of Consultant given within twenty (20) days after mailing of such notice
buy the Company, the Company shall cause to register under the
Securities Act, at Company's expense, all restricted shares of the Consultant,
or Consultant's designees or transferees requested by the Consultant to be
registered.
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13. Dilution of Consulting by
Reverse Split with Subsequent Issuance of Stock. Company agrees
that it will not cause Consultant to suffer any dilution of its percentage
ownership of Company's shares as a result of any restructuring of the Company's
stock through reverse share split corresponding or followed with a share
issuance. Should Company conduct a reverse share split and corresponding or
following issuance of shares, Consultant will be issued shares so as not to
cause Consultant to suffer any dilution of its percentage
ownership.
14. Notice. All notices, demands
and other communications given or delivered under this Agreement shall be in
writing and shall be deemed to have been given when personally delivered, mailed
by first class mail, return receipt requested, or delivered by express courier
service or emailed or sent via facsimile with hard copy to follow.
If to
consultant: Going
Public, LLC
00000
Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx
Xxxxx, Xxxxxxxxxx.00000
Attention:
Xxxxxx Xxxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
E-mail:
xxxx@xxxxxxxx.xx
If to
Company:
LIG Assets, Inc.
000
Xxxxxx Xxxxxx,
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxx, CEO
Telephone:
000-000-0000
Facsimile:
000-000-0000
xxxxxxxx@xxxxxxxxxxxxxxx.xxx
15 Confidentiality.
Company and Controlling Shareholders agree not to directly or indirectly
disclose to any other person or entity any of the terms of this Consulting
Agreement ("Terms"). Company hereby agrees to safeguard such Terms at all times
so that they are not exposed to, or taken by any unauthorized person. If it
should become necessary to disclose the relationship created by this Agreement,
then such disclosure shall not include the Terms of compensation, unless
required by law. it is understood that, with regard to possible Funding
introduced to Company by Consultant, if applicable, Consultant, at its
discretion, may make one or more public announcement of the terms and specifics
of Funding secured for the Company, and such announcement may include, but shall
not be limited to, the amount of the Funding agreement, the type and specifics
of Funding, the relationship between Consultant and Company, the name of the
Funding Source and the name of the Company.
16. Termination end
Survival.
16.1.
This Agreement will become effective ("Effective Date") upon Consultant's
receipt of :Fully executed contract, and will terminate two years from the date
of this Agreement, or upon fulfilling all services described in Paragraph 1,
herein, whichever occurs first
16.2. The
terms and conditions of paragraphs 2 through and Including ail paragraphs prior
to this
section shall survive termination of this Agreement
17. General
Provisions
17.1.
Headings. The
headings in this Agreement are for convenience only and shall not be
considered
a part of or affect the construction or interpretation of any provision of this
Agreement.
17.2. Severability.
If a court of competent jurisdiction holds any provision of this
Agreement to be illegal, unenforceable, or invalid in whole or in part for
any reason, the validity and enforceability of the remaining provisions, or
portions of them, will not be affected.
17.3. Relationship of
Parties. Nothing in this Agreement shall be deemed or construed by the
parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the parties.
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17.4.
Entire
Agreement. This Agreement constitutes the entire agreement between the
Parties pertaining to the subject matter of this Agreement, and any and all
other written or oral agreements existing between the Parties before the
Effective Date of this Agreement with, respect to the subject matter of this
Agreement are expressly cancelled.
17.5.
Modification of
Agreement. This Agreement may be supplemented, amended, or modified only
by the mutual agreement of the Parties. No supplement, amendment, or
modification of this Agreement shall be binding unless it is in writing and
signed by all Parties.
17.6
Binding Effect. Subject to
any restrictions on assignment contained in this Agreement, this Agreement shall
be binding upon and inure to the benefit of the Parties hereto and their
respective heirs, representatives, successors, and assigns.
17.7
Nonwaiver. Any
failure by any Party to enforce any part of this Agreement shall not be deemed a
waiver by such Party of its right to enforce this Agreement according to its
terms and applicable law. No waiver of any breach, failure of any condition, or
any right or remedy contained in or granted by the provisions of
this Agreement shall be
effective unless it is in writing and signed by the party waiving the breach,
failure, right, or remedy. No waiver of any breach, failure, right, or remedy
shall be deemed a waiver of any other breach, failure, right, or remedy, whether
or not similar, nor shall any waiver constitute a continuing waiver unless the
writing so specifies.
17.8
No Assignment.
Neither Party to this Agreement may assign any of its rights or delegate any of its duties
under this Agreement without the prior written consent of the
other party to this
Agreement, which consent may not be unreasonably withheld.
17.9
Counterparts.
This Agreement may be executed in several counterparts, all of which
taken together shall constitute one instrument. A signature of a party delivered
by telecopy or other electronic communication shall constitute an original
signature of such party.
17.10. Waiver of Trial by Jury.
The Parties to this Agreement hereby agree that any suit, action
or proceeding, whether claim or counterclaim, brought or instituted
by either of the Parties on or with respect to this Agreement shell
be tried only by a court and not by a jury. THE PARTIES HEREBY EXPRESSLY WAIVE
ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Company and
its Controlling Shareholders acknowledge and agree that Consultant would not
enter into this Agreement if this waiver of a jury trial were not part of this
Agreement.
17.11.
Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the state
of California, excluding its conflict of laws rules. The Parties agree that a substantial
amount of services under the Agreement will be performed in San Diego County,
and hereby submit to, and waive any objection to,
the jurisdiction of California and the venue of San Diego County for the
purposes of any litigation arising out of or relating to this
Agreement
[SIGNATURE
PAGE FOLLOWS]
Page 6 of
9
IN
WITNESS WHEREOF, the undersigned has caused this Consulting Agreement to be
executed on the day and year first above written.
LIG
Assets, Inc.
By:
/s/
Xxxxxxx
Xxxx
Xxxxxxx Love, Its CEO
CONTROLLING
SHAREHOLDER.
By:
/s/
Xxxxxxx
Xxxx
Xxxxxxx Love, Its CEO
Consultant
/s/ Xxxxxx
Xxxxxxx
By:
Its:
Page 7
of 9
Schedule
A
ADDENDUM
TO CONSULTING AGREEMENT
|
1)
|
This
agreement, signed this 19th day of October, 2008 is an addendum to the
Consulting Agreement signed by Xxxxxxx Xxxx ("Controlling Shareholders")
whereby Going Public, LLC ("Consultant") will convert LIG Assets, Inc.
(the "Company") to a publicly traded entity and whereby Consultant has
agreed to provide zero down financing to Company and its Controlling
Shareholders for payment for Consultant's
services.
|
|
2)
|
NOTE
PAYMENT: $100,000.00 (the "Note") is to be paid via wire transmission no
later than September 19, 2009 ("Maturity
Date").
|
|
3)
|
INTEREST:
Interest shall be paid by Company to Consultant monthly at the rate of 1%
of the principal
amount per calendar month ("Interest") starting the first date of the
Consulting Agreement and then each month thereafter on the same day of
each month until the Note is paid in
full.
|
|
4)
|
The
Company and its Controlling Shareholders agree to transfer a controlling
interest of shares of the Company's common stock ("Controlling Interest")
to be held in escrow (in name of Controlling Shareholder with signature
medallion guaranteed stock powers) by Xxxxxx & Xxxxxx, LLP ("Escrow
Shares") until the Note and all interest, as described herein, is paid in
full (the "Restriction Period"). During the Restriction Period,
Controlling Shareholders and Company will retain voting rights, but agree
that the Escrow Shares shall not be traded. Upon the
Note being repaid including all interest, the Restriction Period shall
end, and the Escrow Shares shall be immediately delivered to the
Controlling Shareholders.
|
|
5)
|
For
valuable consideration, the Controlling Interest (including any subsequent
forward or reverse splits and/or dividends) and all the business assets of
Company and personal assets of Controlling Shareholders shall be held as
collateral by Consultant until Company becomes publicly traded. Once
Company is publicly trading, the business assets of Company and personal
assets of Controlling Shareholders will he released and Consultant shall
only retain the Controlling Interest as collateral until the Note
and all interest is paid In full.
|
|
6)
|
In
the event full payment of the Note, including all unpaid Interest is not
made by the Maturity Date, at Consultant's option, the total shares owned by
Controlling Shareholders or assigns shall he forfeited to Consultant as
payment in lieu of the balance due in
full.
|
|
7)
|
In
the event that Controlling Shareholders' company does not achieve an OTC
listing within 365 days after signing of this contract and the failure is
due to the willful actions or inactions of Controlling Shareholders or due
to other legal, securities related issue, regulatory, or others issue of
its shareholders, officers, or employees that prevent them from getting
approval and listing, if the Note has not been paid in full, including all
interest accrued, the total of Controlling Shareholders' stock and all of
the personal assets and assets of the Company owned by Controlling
Shareholders will be assigned to
Consultant.
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|
8)
|
All
appropriate UCC filings shall be made to secure the consultation fee as
outlined above.
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9)
|
In
addition, Company and Controlling Shareholders shall sign a Secured Note
In the amount described herein as the Note amount, which
shall set forth the details of this
Note.
|
|
10)
|
The
terms of this addendum can be modified, changed, extended at any time by
mutual agreement in writing.
|
[SIGNATURE PAGE FOLLOWS]
Page 8
of 9
Schedule
A
ADDENDUM
TO CONSULTING AGREEMENT
IN
WITNESS WHEREOF, the undersigned has caused this Addendum Consulting Agreement
to be executed on the day and year first above written.
CONTROLLING
SHAREHOLDER.
By: /s/
Xxxxxxx
Xxxx
Xxxxxxx Love, Its CEO
Consultant
/s/ Xxxxxx
Xxxxxxx
By:
Its:
Page 9 of
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