CONSULTING AGREEMENT
This Consulting Agreement is entered into between Xxxxxxx Xxxxx DBA Little
Pond Enterprises (LPE) and Redneck Foods, Inc. (Client), (the "Agreement")
with reference to the following facts.
Client has expressed a desire to enter into this Agreement with LPE for LPE
to provide consulting services through which Client will become a publicly
traded company (the "Services"). LPE is in the business of providing such
services and desires to enter into an Agreement with Client to provide such
"Services". This Agreement is for the purpose of defining the services
provided and the rights and responsibilities of both parties.
1. SERVICES PROVIDED BY LPE.
1. LPE will recommend a structure for Client's entry into the public market.
This structure will be approved by Client. The structure will include
distribution to shareholders, creditors, and other parties and will include
agreed upon capital formation requirements of Client.
2. LPE will interact with Clients attorney for the preparation of a 504 or
similar offering prospectus. If requested, LPE will use its expertise and
contacts to locate a suitable securities attorney to represent client.
3. LPE will, if requested, arrange to be provided, such accounting services
as necessary to complete audits of Client's books in order to proceed with
the preparation and filing of the registration.
4. LPE will locate, if appropriate, suitable individuals to serve as
directors of Clients company. These directors will have relevant experience
either to Clients industry, accounting or public markets to encourage market
support for Clients stock.
5. LPE will interact with Clients securities attorney for the preparation
and filing of a Registration Statement on Form SB2 with the Securities and
Exchange Commission (SEC). Securities to be registered in said registration
include the stock issued to LPE, and other such stock as agreed upon by both
parties.
6. LPE will use its contacts and expertise to locate a suitable investor
relations firm to represent client and will interact with the firm to cause
to be prepared such packaging and promotional materials as LPE, the investor
relations firm and Client deem necessary.
7. LPE will prepare a form 15c2-11 and coordinate its distribution to the
brokerage community at its own expense for the purpose of establishing a
market for the stock and arrange a listing on the Over the Counter Market.
8. LPE agrees to use its expertise and business contacts to locate a
suitable broker relations firm to represent Client. LPE will interact with
the broker relations firm for the purpose of developing market support and/or
an underwriter for the Client's offering.
9. LPE agrees interact with the Client's investor relations firm to assure
the continued promotion of Client's stock. This promotion will be evidenced
by the implementation of a financial relations program created by the IR firm
in conjunction with LPE and Client.
10. LPE agrees to arrange for the inclusion of the Company in Xxxxx'x company
listing services or another comparable service for the purpose of expanding
the marketability of the stock. LPE will obtain the application for the
Client and assist the Client in preparing the applications..
11. LPE agrees to provide consulting services on an as needed basis to Client
for a period of 1 year from this Agreement. LPE and will make itself
available to render advice to Client concerning but not limited to
shareholder relations, market strategy, broker relations and additional
capitalization and any other subjects as may fall under the services provided
within this contract.
2. RESPONSIBILITIES OF CLIENT
1. Client agrees to provide LPE such financial, business and other material
and information about Client, its products, services, contracts, litigation,
patents, trademarks and other such business matters which LPE may request and
which LPE considers to be important and material information for the
completion of this contract.
2. Client agrees to provide LPE and/or Client's attorneys and accountants
all material requested in order to prepare the registration documents. These
materials include but are not limited to: articles of incorporation and all
amendments thereto, by laws of the corporation, its minutes and resolutions
of all shareholders and board of directors meetings, a copy of the share
register showing the names, addresses and social security number of
shareholders and the dates of issuance and the numbers of shares owned by
each shareholder, the names and addresses of all officers and directors of
the corporation, a resume for each officer and director of the corporation
and audited financial statements providing balance sheets for the two
previous years and Statement of Operations for the three previous years.
3. Client agrees to provide LPE with monthly financial statements containing
Balance Sheets and Profit and Loss statements utilizing "GAP" accounting
until the effective date of the registration and the Client also agrees to
notify LPE of any changes in the status or nature of its business, any
litigation, or any other developments that may require further disclosure in
the registration or other documents.
3. CASH COMPENSATION
LPE will receive a total fee of $70,000 for the above services rendered. Fee
does not include any preapproved expenses incurred by LPE. The cash portion
of the fees are only to be paid from the proceeds of the offering.
4. CONVERSION TO EQUITY
LPE may at its option and prior to filing the 504 memorandum, elect to
convert up to $50,000 of its fees into common stock of Client. The conversion
rate shall be at $.10 per share (500,000) shares and the shares will be
issued pursuant to the 504.
5. REPRESENTATIONS BY LPE
LPE represents warrants and covenants the following:
1. LPE will disclose to Client all material facts and circumstances which
may affect its ability to perform its undertaking herein.
2. LPE will cooperate in a prompt and professional manner with Client, its
attorneys, accountants and agents in the performance of this Agreement.
6. REPRESENTATIONS OF CLIENT
Client represents warrants and covenants the following:
1. Corporation will cooperate fully with LPE in executing the
responsibilities required under this contract so that LPE may fulfill its
responsibilities in a timely manner.
2. Client will not circumvent this Agreement either directly or indirectly
nor will it interfere with, impair, delay or cause LPE to perform work not
described in this Agreement.
3. Client and each of its subsidiaries is a corporation duly organized and
existing under the laws of its state of incorporation and is in good standing
with the jurisdiction of its incorporation in each state where it is required
to be qualified to do business.
4. Client's articles of incorporation and bylaws delivered pursuant to this
Agreement are true and complete copies of same and have been duly adopted.
5. Client will cooperate in a prompt and professional manner with LPE, its
attorneys, accountants and agents during the performance of the obligations
due under this Agreement.
6. Client represents that no person has acted as a finder or investment
advisor in connection with the transactions contemplated in this letter other
than those listed on Exhibit A, and Client will indemnify LPE with respect to
any claim for a finders fee in connection with this Agreement. Client
represents that no officer, director or stockholder of the company is a
member of the NASD, an employee or associated member of the NASD, or an
employee or associated person or member of the NASD. Client represents that
is separately has disclosed to LPE all potential conflicts of interest
involving officers, directors, principal stockholders and/or employees.
7. CONFIDENTIALITY
LPE agrees that all information received from Client shall be treated as
confidential information and LPE shall not share such information with any
other person or entity, except the SEC, attorneys and accountants, without
the express written consent of Client, unless such disclosure clearly will
not cause damages to Client.
Client agrees not to divulge each and any named source (lending,
institutions, investors, individuals, Brokers, etc.) which have been
introduced by LPE for a period of one year from the execution of this
Agreement. Furthermore, Client agrees not to circumvent, either directly or
indirectly, the relationship that each LPE has with said sources.
8. NOTICES
Any notices from either party to the other shall be deemed received on the
date such notice is personally delivered. Any notice sent by fax transmission
shall be deemed received by the other party on the day it has been
transmitted. Any notice sent by mail by either party to the other shall be
deemed received on the third business day after is has been deposited at a
United States Post Office. For purposes of delivering or sending notice to
the parties to this Agreement such notices shall be delivered or sent as
follows:
If notice is delivered to LPE. If notice is to be delivered to Client
Little Pond Enterprises Redneck Foods, Inc..
Carolina Bldg. Xxxxx 000 XX Xxx 0000.
10 Office Park Rd. Asheville
XX Xxx 0000 Xxxxx Xxxxxxxx, 00000
Xxxxxx Xxxx Xxxxxx, XX 00000 Phone # 000-000-0000
Phone 000-000-0000 Fax # 000-000-0000
Fax # 000-000-0000
9. ENTIRE AGREEMENT
Neither party has made any representations to the other which are not
specifically set forth in this Agreement. There are no oral or other
agreements between the parties which have been entered into prior or
contemporaneously with the formation of this Agreement. All oral promises,
agreements, representations, statements and warranties hereinafter asserted
by one party against the other shall be deemed to have been waived by such
party asserting that they were made and this Agreement shall supersede all
prior negotiations, statements representations, warranties and agreements
made or entered into between the parties to this Agreement.
10. NO ASSIGNMENT
Neither party may assign any benefit due or delegate performance under this
Agreement without the express written consent of the other party.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
of the State of South Carolina. It shall also be construed as if the parties
participated equally in its negotiation and drafting. The Agreement shall not
be construed against one party over another party.
Should a dispute arise, both parties agree to submit to binding arbitration
under the guidelines of the American Arbitration Association or some other
mutually agreeable Arbitration Association.
12. WAIVER
The waiver of any provision of this Agreement by either party shall not de
deemed to be a continuing waiver or a waiver of any other provision of this
Agreement by either party.
13. SEVERABILITY
If any provision of this Agreement or any subsequent modifications hereof are
found to be unenforceable by a court of competent jurisdiction, the remaining
provisions shall continue to remain in full force and effect.
14. AUTHORITY TO ENTER INTO AGREEMENT
The individuals signing this Agreement below represent to each other that
they have the authority to bind their respective corporations to the terms
and conditions of this Agreement. The individuals shall not, however have
personal liability by executing this Agreement and sign this Agreement only
in their representative capacities as authorized officers of the Client and
LPE respectively.
Dated this ___ of June, 1997 Dated this ____ of June, 1997
Little Pond Enterprises. Redneck Foods, Inc..
by by
Xxxxxxx Xxxxx Xxxxx X. Xxxxxx, President
EXHIBIT A
The following individual has acted as a finder in relation to this agreement
and as such is being compensated by LPE as follows:
Xxxxx Xxxxxx 200,000 shares as defined in Section 4 of the
Agreement. If LPE fails to exercise its option to
convert cash fees to equity, Xxxxx shall receive
$20,000 cash and will be granted the same rights
as in Section 4 of this agreement.
EXHIBIT B
Redneck Foods, Inc. and LPE will mutually agree upon the following
reorganization plan. Alternate reorganization structures may also be chosen
with the approval of both parties.
Redneck Foods, Inc. will reorganize its corporate structure as follows:
Redneck Foods, Inc. will authorize the issuance of 100,000,000 of common
stock and adjust the total issued and outstanding to provide all current
shareholders with 5,100,000 common shares plus Xxxxxxxxx Preferred shares.
The Board of Directors will then approve the following:
The issuance of 900,000 shares of common stock at a price of $1.00 per share
pursuant to a Reg D 504 offering memorandum
The issuance of additional shares as necessary for directors, employees and
service providers as determined by Redneck Foods.
EXPENSES
The below listed expenses are fees Client can expect to pay to proceed
through the process of going public and establishing a market for their
stock. Fees with asterisks are optional fees which may be necessary.
Attorneys Fees $20,000 (("504"=$5,000 SB2= $15,000)
Filing Fees (SB) $1/29th of 1% of stock to be registered
Commissions (if applicable) n/a
Auditor $5000+
Xxxxx'x Listing $3,500+- (S&P is considerably more)
Transfer Agent $1,500+- plus $200 per month
Additional one time Financial Relations* $75,000
Standard Financial and Market Relations 500,000 shares of common stock
agreement
Directors & Officers Insurance** $15,000 annually
*Financial Relations expenses depend upon a number of factors. The
fundamentals provided and the excitement surrounding the company will affect
the amount of capital necessary to invest in financial relations. The
suggested amount implies no underwriter is utilized.
**Directors and Officers Insurance is optional only if officers provided by
client are sufficient and LPE does not provide directors through referral
Directors and Officers may elect to waive the requirement.
