FUNDING AGREEMENT
THIS AGREEMENT, is effective July __, 1999, and is between ProCare
Industries, Ltd. ("Company") and Xxxxxx X. Xxxxxx, President ("Xxxxxx") and is
made with reference to the following agreed facts:
A. The Company is a publicly owned corporation in good standing under
applicable state and federal securities and corporate law. The Company has no
present assets with which to pay its accumulated and ongoing expenses and
obligations.
B. The Company, through its Board of Directors, intends to seek and
consummate a suitable acquisition transaction pursuant to which the Company will
acquire the assets and business of one or more privately-owned businesses, such
that the Company becomes an operating entity, thereby providing the private
business with the structure of a publicly-owned corporation and providing
liquidity and value to the present shareholders of the Company.
X. Xxxxxx has agreed to provide services as an officer of the Company in
seeking and negotiating the terms of an acceptable acquisition transaction for
the Company. Xxxxxx has also agreed to be responsible for, and to pay, the
Company's outstanding and ongoing expenses and liabilities which the Company may
incur from time to time in connection with preparing and filing necessary
reports and other disclosures under applicable federal securities laws, issuing
the Company's securities and documenting and completing and acquisition
transaction which may be approved in the future by the Board of Directors.
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Xxxxxx and the Company agree as
follows:
1. Xxxxxx shall continue to serve as the President and as a director of the
Company until the first to occur of the following: (i) 12 months from the date
of this Agreement, or (ii) the date on which an acquisition transaction approved
by the Board of Directors of the Company is completed. In connection with such
services, Xxxxxx shall report his activities from time to time to the Board of
Directors of the Company and shall take such other action as may be necessary or
appropriate or as shall be assigned by the Board of Directors.
2. Xxxxxx shall advance, on behalf of the Company, payment of all of the
Company's existing and outstanding unpaid liabilities, which total approximately
$9,793 at June 30, 1999 and all other liabilities and obligations of the Company
which shall be incurred during the term of this Agreement and which the Company
shall be unable to satisfy from other sources.
3. At such time as an acquisition transaction which has been approved by
the Board of Directors of the Company and which is deemed by the Board of
Directors to be in the best interests of the Company and all of its shareholders
is completed, the Company shall pay to Xx. Xxxxxx a contingent fee of $150,000,
as his compensation or providing management services through the date of
completion of the acquisition transaction. If an acquisition transaction
approved by the Board of Directors of the Company is not completed within 12
months from the date of this Agreement, the Company and Xx. Xxxxxx shall
negotiate in good faith new arrangements for future compensation.
4. The parties agree to take such further action and to consider such
additional developments as may be reasonably necessary in order to accomplish
the purposes set forth herein.
Dated effective the date first set forth above.
PROCARE INDUSTRIES, LTD.
By /s/ Xxxxx Bergenfield
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Xxxxx Bergenfield, Director
/s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
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