SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
Genesis Capital Corporation of Nevada
-------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 91-1947658
------- -----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11701 South Freeway, Burleson, Texas 76028
------------------------------------------
(Address of principal executive offices)
Consulting Agreements between Genesis Capital Corporation of Nevada and
-----------------------------------------------------------------------
Mr. Ronald W. Welborn and Mr. Henry W. Simon, Jr.
-------------------------------------------------
(Full title of the plan)
LaVonne Frost
711 South Carson Street, Suite 1
Carson City, Nevada 89701
-------------------------
(Name, address, including zip code, of agent for service)
Telephone number for agent for service: (702) 883-5755
--------------
Telephone number for Issuer: (817) 293-9334
--------------
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Securities to be Amounts Proposed Maximum Proposed Maximum Amount of
Registered to be Offering Price Per Aggregate Offering Registration
Registered Share(1) Price Fee
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 400,000 $5.06 $2,024,000 $534.34
===================================== =============== ======================== =========================== ==================
</TABLE>
(1) Bona Fide estimate of maximum offering price solely for calculating the
registration fee pursuant to Rule 457(h) of the Securities Act of 1933,
based on the average bid and asked price of the registrant's common
stock as of April 13, 2000, a date within five business days prior to
the date of filing this registration statement.
1
<PAGE>
Explanatory Note
This S-8 Registration Statement is being filed to register 400,000
shares of the Company's common stock to be issued to Mr. Ronald W. Welborn and
Mr. Henry W. Simon, Jr. pursuant to written compensation contracts, (the
"Consulting Agreements") dated March 24, 2000 and filed as Exhibits A and B
hereto. The Consulting Agreements indicate that both Mr. Welborn and Mr. Simon
provided bona fide services to the Company not in connection with an offer or
sale of securities in a capital-raising transaction and not in connection with
any services deemed impermissible for the issuance of stock by the Company under
an S-8 Registration Statement.
Cross-Reference Sheet Pursuant to Rule 404(a)
Cross-reference between items of Part I of Form S-8 and the Section
10(a) Prospectus that will be delivered to each employee, consultant, or
director who participates in the Plan.
Registration Statement Item Numbers and Headings Prospectus Heading
- ------------------------------------------------ -------------------
1. Plan Information Section 10(a) Prospectus
2. Registrant Information Section 10(a) Prospectus
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Genesis Capital Corporation of Nevada,
a Nevada corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference:
1. The Company's Form 10-SB, as filed with the Securities and Exchange
Commission on October 26, 1999;
2. All reports filed by the Company with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act of 1934, as amended (the "Exchange
Act"), since the end of the fiscal year ended September 30, 1999;
3. The description of the Common Stock contained in the Company's Form
10-SB Registration Statement filed on October 26, 1999, under the Securities
Act, including any amendment or report filed for the purpose of updating such
description.
Prior to the filing, if any, of a post-effective amendment that
indicates that all securities covered by this Registration Statement have been
sold or that de-registers all such securities then remaining unsold, all reports
and other documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
2
<PAGE>
Item 4. Description of Securities
The common stock of the Company being registered pursuant to this
Registration Statement is part of a class of securities registered under Section
12 of the Exchange Act. A description of such securities is contained in the
Company's Form 10-SB Registration Statement filed with the Securities and
Exchange Commission on October 26, 1999 and any amendment or report filed for
the purpose of updating such description. Said description is incorporated
herein by reference. (See "Item 3. Incorporation of Documents by Reference.")
Item 5. Interests of Named Experts and Counsel
No expert is named as preparing or certifying all or part of the
registration statement to which this prospectus pertains, and no counsel for the
Company who is named in this prospectus as having given an opinion on the
validity of the securities being offered hereby, was hired on a contingent basis
or has or is to receive, in connection with this offering, a substantial
interest, direct or indirect, in the Company.
Item 6. Indemnification of Directors and Officers
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to members of
the board of directors, officers, employees, or persons controlling the Company
pursuant to the immediately subsequent provisions, the Company has been informed
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
The Company's Bylaws, specifically Section 6.09 of Article 6, however,
eliminate the personal liability of the officers and directors to shareholders
or the corporation for money damages to the extent permitted by Nevada Revised
Statutes ("NRS") Section 78.037. NRS Section 78.037 provides that a corporation
may limit or eliminate officers' and directors' personal liability for breach of
fiduciary duty so long as liability is not eliminated or limited for acts or
omissions involving intentional misconduct, fraud or a knowing violation of law
or the payment of unlawful distributions.
Section 6.09 of Article 6 of the Company's Bylaws provides that the
Company shall indemnify its officers and directors for any liability, including
reasonable costs of defense, arising out of any act or omission of any officer
or director on behalf of the Corporation to the fullest extent allowed by the
laws of the State of Nevada.
In actions, proceedings and suits involving an officer or director
because of their being or having been an officer or director, other than actions
by or in the right of the corporation, NRS Section 78.751 (the "Nevada Statute")
permits a corporation to indemnify directors or officers against actual and
reasonable expenses, including attorney fees, judgments, fines and amounts paid
in settlement. The Nevada Statute applies to actions, proceedings or suits
whether civil, criminal, administrative or arbitrative in nature. However,
unless a court directs otherwise, indemnification is permissible only if the
officer or director meets the applicable standard of conduct and indemnification
is proper under the circumstances. In civil cases, the standard of conduct
requires the officer or director to act in good faith and in a manner he or she
reasonably believes to be in or not opposed to the best interests of the
Company. In criminal cases, an officer or director meets the standard of conduct
if he or she had no reasonable cause to believe his or her conduct was unlawful.
The board of directors acting through a quorum of disinterested directors,
independent legal counsel designated by the board of directors, or the
shareholders shall determine whether
3
<PAGE>
indemnification is proper under the circumstances. Termination of proceedings by
judgment, order, settlement, conviction or plea of no contest or its equivalent,
does not of itself establish a presumption that the officer or director did not
meet the applicable standard of conduct.
In actions by or in the right of the Company, the Company may indemnify
an officer or director against expenses provided he or she satisfies the
applicable standard of conduct. However, the Company cannot indemnify an officer
or director adjudged liable to the corporation on any claim, issue or matter
unless, and to the extent, the court determines that despite the adjudication of
liability, and in light of all the circumstances, the officer or director is
fairly and reasonably entitled to indemnity for expenses.
In all proceedings, whether by or in the right of the Company or
otherwise, the Nevada Statute requires indemnification to the extent the officer
or director is successful on the merits or otherwise in defense of the
proceeding or in defense of any claim, issue or matter therein. A Nevada
corporation may provide, either in its articles, bylaws or agreements, that the
corporation shall pay the expenses on behalf of a director or officer prior to
the final disposition of the action upon receipt of an undertaking by or on
behalf of the director or officer to repay those advancements if it is
ultimately determined that the officer or director is not entitled to
indemnification. The Nevada Statute does not exclude other indemnification
rights to which a director or officer may be entitled under the articles of
incorporation, the bylaws, an agreement, a vote of shareholders or disinterested
directors, or otherwise; provided that those rights would not indemnify an
officer or director against a judgment or other final adjudication adverse to
the officer or director that establishes the officer's or director's acts or
omissions involved intentional misconduct, fraud or known violation of the law
and were material to the cause of action.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to NRS Section
78.751 and to Section 6.09 of Article 6 of the Company's Bylaws.
Item 7. Exemption from Registration Claimed
No restricted securities are being re-offered or resold pursuant to
this registration statement.
Item 8. Exhibits.
The exhibits attached to this Registration Statement are listed in the
Exhibit Index, which is found on page 8.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material
change to such information in the Registration Statement.
4
<PAGE>
(2) To treat, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment as a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit Plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, at Fort Worth, Texas on April 18, 2000.
Genesis Capital Corporation of Nevada
By:/s/ Reginald L. Davis
----------------------------
Reginald L. Davis
President/CEO and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below
constitutes and appoints Reginald L. Davis with power of substitution, as his
attorney-in-fact for him, in all capacities, to sign any amendments to this
registration statement and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact or his
substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
/s/Reginald L. Davis President/CEO and Director April 18, 2000
- ------------------------
Reginald L. Davis
/s/Jerry Conditt Vice President/Secretary/ April 18, 2000
- ------------------------
Jerry Conditt Treasurer and Director
6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Genesis Capital Corporation of Nevada
(A Nevada Corporation)
7
<PAGE>
INDEX TO EXHIBITS
Exhibits SEC Ref. Sequentially
No. Description of Exhibit Numbered Pages
- -------- ----------- ---------------------- --------------
A 4 Consulting Agreement with Mr. Ronald W. 9
Welborn
B 4 Consulting Agreement with Mr. Henry W. 16
Simon, Jr.
C 5, 23(b) Opinion and Consent of Counsel with
respect to the legality of the issuance
of securities being issued 24
D 23(a) Consent of Accountant 27
8
Exhibit A
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made effective as of the 1st
day of October 1999 (the "Effective Date"), by and between Ronald W. Welborn
(the "Consultant") and Genesis Capital Corporation of Nevada, a Nevada
corporation (the "Company").
WHEREAS, the Consultant also provides general financial advice to
corporate management and performs general administrative duties for
publicly-held and other companies; and
WHEREAS, the Company desires to retain the Consultant to advise and
assist it, on the terms and conditions set forth below.
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 is hereby acknowledged, the Company and the
Consultant agree as follows:
1. Engagement
The Company hereby retains the Consultant, from the Effective Date and
continuing until termination, as provided herein, to (a) assist the
Company in compromising and settling litigation in which the Company is
a defendant, (b) resolve the claims of unpaid creditors of the Company,
and (c) otherwise provide financial services (collectively termed the
"Services"). The Services shall include without limitation those
services described on Exhibit A. The Services are to be provided on a
"best efforts" basis directly and through the Consultant's employees or
others employed or retained and under the direction of the Consultant
(the "Consultant's Personnel"); provided, however, that the Services
are expressly agreed to exclude all legal advice, accounting services
or other services which require licenses or certification; and
provided, further, that, in no event, shall the Services include
services (a) in connection with the offer or the sale of securities of
the issuer in a capital-raising transaction, (b) directly or indirectly
promoting or maintaining a market for the Company's securities, or (c)
for the principal purpose of taking a private company public by its
merger into or with the Company or its subsidiary.
2. Term
This Agreement shall have an initial term (the "Primary Term"), with an
effective date retroactive to the date services were first performed by
the Consultant, which was on or about the Effective Date, and ending
March 24, 2000. This Agreement may be renewed by the mutual consent of
the parties.
3. Time and Effort of the Consultant
The Consultant shall allocate time and the Consultant's personnel as it
deems necessary to provide the Services. The particular amount of time
may vary from day to day or week to week. The Consultant has provided
a statement identifying, in general, the tasks it has performed from
the Effective Date to March 17, 2000. The Company has reviewed this
statement and believes the time and effort expended by the Consultant
to be reasonable for the tasks it has completed. The Consultant will
9
<PAGE>
continue to provide billing statements on a monthly basis or within
(7) days of the Company's request. These billing statements shall be
conclusive evidence that the Services have been performed.
Additionally, in the absence of willful misfeasance, bad faith, or
reckless disregard for the obligations or duties hereunder by the
Consultant, neither the Consultant nor the Consultant's Personnel
shall be liable to the Company or any of its shareholders for any act
or omission in the course of or connected with rendering the Services,
including but not limited to losses that may be sustained in any
corporate action undertaken by the Company as a result of advice
provided by the Consultant or the Consultant's Personnel.
4. Compensation
The Company agrees to pay the Consultant a fee for the Services he has
provided under this Agreement by issuing to Consultant five hundred
eighty thousand (580,000) shares of the Company's common stock after
April 14, 2000 but before May 31, 2000. All shares of the Company's
common stock issued to the Consultant are deemed to be validly issued,
fully paid and non-assessable. Of the shares to be issued, a total of
three hundred fifty thousand (350,000) shares shall be issued and
registered on Form S-8 filed under Section 5 of the Securities Act of
1933. This registration statement shall be made effective no later than
May 31, 2000. The remaining two hundred thirty thousand (230,000)
shares shall be issued simultaneously with the filing of the
registration statement on Form S-8 with the Securities and Exchange
Commission. The shares not registered shall be issued pursuant to
Section 4(2) of the Securities Act of 1933, and the share certificates
representing these shares shall bear customary legends indicating that
these shares are "restricted securities" as defined in SEC Rule 144(a).
The Consultant represents and warrants that he is acquiring the shares
not registered for investment purposes and not with a view to their
distribution.
5. Costs and Expenses
All third-party and out-of-pocket expenses incurred by the Consultant
in the performance of the Services shall be paid by the Company, or
shall be reimbursed if paid by the Consultant on behalf of the Company,
within ten (10) days of receipt of written notice by the Consultant,
provided that the Company must approve in advance all such expenses in
excess of $500 per month.
6. Place of Services
The Services provided by the Consultant or the Consultant's Personnel
will be performed at the Consultant's offices except as otherwise
mutually agreed in writing by the Consultant and the Company.
7. Independent Contractor
The Consultant and the Consultant's Personnel will act as independent
contractors in the performance of any duties under this Agreement.
Accordingly, the Consultant will be responsible for paying all federal,
state, and local taxes on compensation paid under this Agreement,
including income and social security taxes, unemployment insurance, and
any other taxes due relative to the Consultant's Personnel, and any and
all business license fees as may be required. This Agreement neither
10
<PAGE>
expressly nor otherwise creates a relationship of principal and agent,
or employer and employee, between the Company and the Consultant's
Personnel. Neither the Consultant nor the Consultant's Personnel are
authorized to enter into any agreements on behalf of the Company. The
Company expressly retains the right to approve, in its sole
discretion, all action related to the Services provided by the
Consultant.
8. No Agency Express or Implied
This Agreement creates neither a principal-agent nor an
employer-employee relationship, either express or implied, between the
Company and either the Consultant or the Consultant's Personnel.
9. Termination
The Company and the Consultant may terminate this Agreement before the
Primary Term expires, on thirty (30) days written notice, with mutual
written consent. Absent mutual consent, and without prejudice to any
other remedy to which the terminating party may be entitled, either
party may terminate this Agreement with thirty (30) days written notice
under the following conditions:
(A) By the Company.
--------------
(i) If during the Primary Term of this Agreement, the Consultant
is unable to provide the Services as set forth herein for thirty
(30) consecutive business days because of illness, accident, or
other incapacity of the Consultant's Personnel; or,
(ii) If the Consultant willfully breaches o grossly neglects the
duties required to be performed hereunder; or,
(B) By the Consultant.
-----------------
(i) If the Company breaches this Agreement or fails to make any
payment or provide any information required hereunder; or
(ii) If the Company ceases business or, other than in a merger
arranged by the Consultant, sells a controlling interest to a
third party, or agrees to a consolidation or merger of itself
with or into another corporation, or enters into such a
transaction outside of the scope of this Agreement, or sells
substantially all of its assets to another corporation, entity or
individual outside the scope of this Agreement; or
(iii) If the Company has a receiver appointe for its business or
assets, or otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of business, or
(iv) If the Company institutes or has instituted against it any
bankruptcy proceeding, files a petition in a court of bankruptcy,
is adjudicated a bankrupt, or makes a general assignment for the
benefit of creditors; or
11
<PAGE>
(v) If any disclosure made by the Company in connection with the
issuance of its common stock as provided in Section 4 of this
Agreement, is materially false or misleading.
10. Indemnification
Subject to the provisions herein, the Company and the Consultant agree
to indemnify and defend each other, and hold each other harmless, from
and against all demands, claims, actions, losses, damages, liabilities,
costs and expenses, including without limitation interest, penalties,
attorneys' fees and expenses, asserted against, imposed on, or incurred
by either party by reason of or resulting from any unlawful action of,
or a misrepresentation contained in this Agreement, breach of any
covenant or agreement herein, by the other party to this Agreement.
11. Remedies
The Consultant and the Company acknowledge that in the event of a
breach of this Agreement by either party, money damages would be
inadequate, and the non-breaching party would have no adequate remedy
at law. Accordingly, in the event of any controversy concerning the
rights or obligations under this Agreement, such rights or obligations
shall be enforceable in a court of equity by a decree of specific
performance. Such remedy, however, shall be cumulative and
non-exclusive and shall be in addition to any other remedy to which the
parties may be entitled.
12. Miscellaneous
(A) Subsequent Events. The Consultant and the Company each agree to0
notify the other party if, subsequent to the date of this
Agreement, either party incurs obligations which could compromise
its efforts and obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by
the parties hereto.
(C) Further Actions and Assurances. At any time an from time to time,
each party agrees, at its or their expense, to take actions and
to execute and deliver documents as may be reasonably necessary
to effectuate the purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with
any of its obligations, agreements, or conditions hereunder may
be waived in writing by the party to whom such compliance is
owed. The failure of any party to this Agreement to enforce at
any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision or a waiver of
the right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non-compliance with this
Agreement shall be held to be a waiver of any other or subsequent
breach or non-compliance.
(E) Assignment. Neither this Agreement nor any right created by it
shall be assignable by either party without the prior written
consent of the other.
(F) Notices. Any notice or other communication required or permitted
by this Agreement must be in writing and shall be deemed to be
properly given when delivered in person
12
<PAGE>
to an officer of the other party, or on the first business day
after (a) deposited in the United States mails for transmittal by
certified or registered mail, return receipt requested, postage
prepaid, (b) deposited with an overnight courier service with
shipping charges billed to the sender, or (c) sent by facsimile
transmission, provided that the communication is addressed:
(i) In the case of the Company:
Genesis Capital Corporation of Nevada
11701 South Freeway
Burleson, Texas 76028
Telephone: (817) 293-9334
Facsimile: (817) 293-9336
(ii) In the case of The Consultant:
Ronald W. Welborn
11701 South Freeway
Burleson, Texas 76028
Telephone: (817) 293-9334
Facsimile: (817) 293-9336
or to such other person or address designated in writing by
the Company or the Consultant to receive notice.
(G) Headings. The headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) Governing Law. This Agreement was negotiated and is being
contracted for in the United States of America, State of Texas,
and shall be governed by the laws of the State of Texas, and the
United States of America, notwithstanding any conflict-of-law
provision to the contrary.
(I) Binding Effect. This Agreement shall be bindin on the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
(J) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. No oral
understandings, statements, promises, or inducements contrary to
the terms of this Agreement exist. No representations,
warranties, covenants, or conditions, express or implied, other
than as set forth herein, hav been made by any party.
K) Severability. If any part of this Agreement is deemed to be void,
illegal, or unenforceable, the balance of the Agreement shall
remain in full force and effect.
13
<PAGE>
(L) Counterparts. A facsimile, telecopy, or other reproduction of
this Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument,
by one or more parties hereto, and such executed copy may be
delivered by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on
behalf of such party can be seen. In this event, such execution
and delivery shall be considered valid, binding and effectiv for
all purposes. At the request of any party hereto, all parties
agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
13. (M) Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
on this 24th day of March 2000, but effective as of the Effective Date.
THE CONSULTANT
/s/Ronald W. Welborn
------------------------
RONALD W. WELBORN
COMPANY
GENESIS CAPITAL CORPORATION OF NEVADA,
a Nevada corporation
By: /s/Jerry Conditt
-------------------------
Jerry Conditt, Vice President
[Note: This agreement was re-executed in April 2000 to reflect
adjustment to the consideration.]
14
<PAGE>
EXHIBIT A
Additional Description of the Services
1. Settlement of a lawsuit involving Biorelease Corporation and the Company.
2. Resolution of disputes between the Company and Crestline Financial relating
to the shares of the Company's preferred stock registered in the name of
Crestline.
3. Resolution of similar disputes over the Company's preferred stock
registered in the names of Larry Austin.
4. Resolution of a dispute over the Company's preferred stock with Sureco
Limited.
5. Negotiation of Acquisition Agreement between the Company and Power
Exploration, Inc. relating to the sale of a Genesis subsidiary to Power
Exploration, Inc.
15
Exhibit B
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made effective as of the 1st day
CONSULTING AGREEMENT of October 1999 (the "Effective Date"), by and between
Henry W. Simon, Jr. (the "Consultant") and Genesis Capital Corporation of
Nevada, a Nevada corporation (the "Company").
WHEREAS, the Consultant also provides general financial advice to corporate
management and performs general administrative duties for publicly-held and
other companies; and
WHEREAS, the Company desires to retain the Consultant to advise and assist
it, on the terms and conditions set forth below.
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 is hereby acknowledged, the Company and the
Consultant agree as follows:
1. Engagement
The Company hereby retains the Consultant, from the Effective Date and
continuing until termination, as provided herein, to (a) assist the
Company in compromising and settling litigation in which the Company is
a defendant, (b) resolve the claims of unpaid creditors of the Company,
and (c) otherwise provide financial services (collectively termed the
"Services"). The Services shall include without limitation those
services described on Exhibit A. The Services are to be provided on a
"best efforts" basis directly and through the Consultant's employees or
others employed or retained and under the direction of the Consultant
(the "Consultant's Personnel"); provided, however, that the Services
are expressly agreed to exclude all legal advice, accounting services
or other services which require licenses or certification; and
provided, further, that, in no event, shall the Services include
services (a) in connection with the offer or the sale of securities of
the issuer in a capital-raising transaction, (b) directly or indirectly
promoting or maintaining a market for the Company's securities, or (c)
for the principal purpose of taking a private company public by its
merger into or with the Company or its subsidiary.
2. Term
This Agreement shall have an initial term (the "Primary Term"), with an
effective date retroactive to the date services were first performed by
16
<PAGE>
the Consultant, which as on or about the Effective Date, and ending
March 24, 2000. This Agreement may be renewed by the mutual consent of
the parties.
3. Time and Effort of the Consultant
The Consultant shall allocate time and the Consultant's personnel as
it deems necessary to provide the Services. The particular amount of
time may vary from day to day or week to week. The Consultant has
provided a statement identifying, in general, the tasks it has
performed from the Effective Date to March 17, 2000. The Company has
reviewed this statement and believes the time and effort expended by
the Consultant to be reasonable for the tasks it has completed. The
Consultant will continue to provide billing statements on a monthly
basis or within (7) days of the Company's request. These billing
statements shall be conclusive evidence that the Services have been
performed. Additionally, in the absence of willful misfeasance, bad
faith, or reckless disregard for the obligations or duties hereunder
by the Consultant, neither the Consultant nor the Consultant's
Personnel shall be liable to the Company or any of its shareholders
for any act or omission in the course of or connected with rendering
the Services, including but not limited to losses that may be
sustained in any corporate action undertaken by the Company as a
result of advice provided by the Consultant or the Consultant's
Personnel.
4. Compensation
The Company agrees to pay the Consultant a fee for the Services he has
provided under this Agreement by issuing to Consultant five hundred
eighty thousand (580,000) shares of the Company's common stock after
April 14, 2000 but before May 31, 2000. All shares of the Company's
common stock issued to the Consultant are deemed to be validly issued,
fully paid and non-assessable. Of the shares to be issued, a total of
three hundred fifty thousand (350,000) shares shall be issued and
registered on Form S-8 filed under Section 5 of the Securities Act of
1933. This registration statement shall be made effective no later than
May 31, 2000. The remaining two hundred thirty thousand (230,000)
shares shall be issued simultaneously with the filing of the
registration statement on Form S-8 with the Securities and Exchange
Commission. The shares not registered shall be issued pursuant to
Section 4(2) of the Securities Act of 1933, and the share certificates
representing these shares shall bear customary legends indicating that
these shares are "restricted securities" as defined in SEC Rule 144(a).
The Consultant represents and warrants that he is acquiring the shares
not registered for investment purposes and not with a view to their
distribution.
5. Costs and Expenses
All third-party and out-of-pocket expenses incurred by the Consultant
in the performance of the Services shall be paid by the Company, or
shall be reimbursed if paid by the Consultant on behalf of the Company,
within ten (10) days of receipt of written notice by the Consultant,
provided that the Company must approve in advance all such expenses in
excess of $500 per month.
17
<PAGE>
6. Place of Services
The Services provided by the Consultant or the Consultant's Personnel
will be performed at the Consultant's offices except as otherwise
mutually agreed in writing by the Consultant and the Company.
7. Independent Contractor
The Consultant and the Consultant's Personnel will act as independent
contractors in the performance of any duties under this Agreement.
Accordingly, the Consultant will be responsible for paying all federal,
state, and local taxes on compensation paid under this Agreement,
including income and social security taxes, unemployment insurance, and
any other taxes due relative to the Consultant's Personnel, and any and
all business license fees as may be required. This Agreement neither
expressly nor otherwise creates a relationship of principal and agent,
or employer and employee, between the Company and the Consultant's
Personnel. Neither the Consultant nor the Consultant's Personnel are
authorized to enter into any agreements on behalf of the Company. The
Company expressly retains the right to approve, in its sole discretion,
all action related to the Services provided by the Consultant.
8. No Agency Express or Implied
This Agreement creates neither a principal-agent nor an
employer-employee relationship, either express or implied, between the
Company and either the Consultant or the Consultant's Personnel.
9. Termination
The Company and the Consultant may terminate this Agreement before the
Primary Term expires, on thirty (30) days written notice, with mutual
written consent. Absent mutual consent, and without prejudice to any
other remedy to which the terminating party may be entitled, either
party may terminate this Agreement with thirty (30) days written notice
under the following conditions:
(A) By the Company.
(i) If during the Primary Term of this Agreement, the Consultant is
unable to provide the Services as set forth herein for thirty
(30) consecutive business days because of illness, accident, or
other incapacity of the Consultant's Personnel; or,
(ii) If the Consultant willfully breaches o grossly neglects the
duties required to be performed hereunder; or,
18
<PAGE>
(B) By the Consultant.
(i) If the Company breaches this Agreement or fails to make any
payment or provide any information required hereunder; or
(ii) If the Company ceases business or, other than in a merger
arranged by the Consultant, sells a controlling interest to a
third party, or agrees to a consolidation or merger of itself
with or into another corporation, or enters into such a
transaction outside of the scope of this Agreement, or sells
substantially all of its assets to another corporation, entity or
individual outside the scope of this Agreement; or
(iii)If the Company has a receiver appointe for its business or
assets, or otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of business, or
(iv) If the Company institutes or has instituted against it any
bankruptcy proceeding, files a petition in a court of bankruptcy,
is adjudicated a bankrupt, or makes a general assignment for the
benefit of creditors; or
(v) If any disclosure made by the Company in connection with the
issuance of its common stock as provided in Section 4 of this
Agreement, is materially false or misleading.
10. Indemnification
Subject to the provisions herein, the Company and the Consultant agree
to indemnify and defend each other, and hold each other harmless, from
and against all demands, claims, actions, losses, damages, liabilities,
costs and expenses, including without limitation interest, penalties,
attorneys' fees and expenses, asserted against, imposed on, or incurred
by either party by reason of or resulting from any unlawful action of,
or a misrepresentation contained in this Agreement, breach of any
covenant or agreement herein, by the other party to this Agreement.
11. Remedies
The Consultant and the Company acknowledge that in the event of a
breach of this Agreement by either party, money damages would be
inadequate, and the non-breaching party would have no adequate remedy
at law. Accordingly, in the event of any controversy concerning the
rights or obligations under this Agreement, such rights or obligations
shall be enforceable in a court of equity by a decree of specific
performance. Such remedy, however, shall be cumulative and
non-exclusive and shall be in addition to any other remedy to which the
parties may be entitled.
19
<PAGE>
12. Miscellaneous
(A) Subsequent Events. The Consultant and the Company each agree to notify
the other party if, subsequent to the date of this Agreement, either
party incurs obligations which could compromise its efforts and
obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the parties
hereto.
(C) Further Actions and Assurances. At any time an from time to time, each
party agrees, at its or their expense, to take actions and to execute
and deliver documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with any
of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed. The failure
of any party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or non-compliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or non-compliance.
(E) Assignment. Neither this Agreement nor any right created by it shall
be assignable by either party without the prior written consent of the
other.
(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, or on
the first business day after (a) deposited in the United States mails
for transmittal by certified or registered mail, return receipt
requested, postage prepaid, (b) deposited with an overnight courier
service with shipping charges billed to the sender, or (c) sent by
facsimile transmission, provided that the communication is addressed:
(i) In the case of the Company:
Genesis Capital Corporation of Nevada
11701 South Freeway
Burleson, Texas 76028
Telephone: (817) 293-9334
Facsimile: (817) 293-9336
(ii) In the case of The Consultant:
Henry W. Simon, Jr.
Simon, Warner & Doby, L.L.P.
20
<PAGE>
301 Commerce Street, Suite 1700
Fort Worth, Texas 76102
Telephone: (817) 810-5250
Facsimile: (817) 810-5255
or to such other person or address designated in writing by
the Company or the Consultant to receive notice.
(G) Headings. The headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) Governing Law. This Agreement was negotiated and is being
contracted for in the United States of America, State of Texas,
and shall be governed by the laws of the State of Texas, and the
United States of America, notwithstanding any conflict-of-law
provision to the contrary.
(I) Binding Effect. This Agreement shall be bindin on the parties
hereto and inure to the benefit of the parties, their respective
heirs, administrators, executors, successors, and assigns.
(J) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the parties
relating to the subject matter of this Agreement. No oral
understandings, statements, promises, or inducements contrary to
the terms of this Agreement exist. No representations,
warranties, covenants, or conditions, express or implied, other
than as set forth herein, hav been made by any party.
(K) Severability. If any part of this Agreement is deemed to be void,
illegal, or unenforceable, the balance of the Agreement shall
remain in full force and effect.
(L) Counterparts. A facsimile, telecopy, or other reproduction of
this Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument,
by one or more parties hereto, and such executed copy may be
delivered by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on
behalf of such party can be seen. In this event, such execution
and delivery shall be considered valid, binding and effectiv for
all purposes. At the request of any party hereto, all parties
agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
13. (M) Time is of the Essence. Time is of the essence of this Agreement
and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on this 24th
day of March 2000, but effective as of the Effective Date.
21
<PAGE>
THE CONSULTANT
/s/ Henry W. Simon, Jr.
-----------------------
HENRY W. SIMON, JR.
COMPANY
GENESIS CAPITAL CORPORATION OF NEVADA,
a Nevada corporation
By: /s/Jerry Conditt
------------------------------
Jerry Conditt, Vice President
[Note: This agreement was re-executed in April 2000 to reflect adjustment to the
consideration.]
22
<PAGE>
EXHIBIT A
Additional Description of the Services
1. Assist with settlement of a lawsuit involving Biorelease Corporation and
Genesis Capital Corporation of Nevada.
2. Assist with resolution of disputes over the Company's preferred stock
registered in the name of Larry Austin.
3. Assist with resolution of a dispute over the Company's preferred stock with
Sureco Limited.
4. Performed legal services and drafting of legal documents in relation to the
Acquisition Agreement between Genesis Capital Corporation of Nevada and
Power Exploration, Inc. relating to the sale of a Genesis subsidiary to
Power Exploration, Inc.
5. Negotiations with holders of Genesis preferred stock represented by Gerald
Schevy, Esq. (Negotiations have begun and are still ongoing.)
23
KIM TAYLOR
ATTORNEY- AT- LAW
1003 South 1400 East
Salt Lake City, Utah 84105
Telephone/Fax - (801) 582-7811
April 13, 2000
Board of Directors
Genesis Capital Corporation of Nevada
11701 South Freeway
Burleson, TX 76028
Re: Form S-8 Registration Statement
Gentlemen:
I have acted as a special counsel for Genesis Capital Corporation of
Nevada, a Nevada corporation (the "Company"), in connection with the preparation
and filing with the Securities and Exchange Commission ("the Commission") under
the Securities Act of 1933, as amended, ("the Act") of a registration statement
on Form S-8 (the "Registration Statement"). The Company is registering 350,000
shares of the Company's common stock to be issued to Mr. Ronald W. Welborn
pursuant to a written compensation contract dated March 24,2000 and 50,000
shares of the Company's common stock to be issued to Mr. Henry Simon pursuant to
a written compensation contract of the same date. The compensation contracts,
(the "Consulting Agreements"), indicate that Mr. Welborn and Mr. Simon have
provided bonafide services to the Company not in connection with an offer or
sale of securities in a capital-raising transaction and not in connection with
any services not deemed permissible for the issuance of stock by the Company
under an S-8 Registration Statement.
In connection with the Company's filing of the Registration Statement,
you have requested my opinion regarding the validity of the issuance of the
aforementioned Shares.
This opinion letter (this "Opinion") is governed by, and shall be
interpreted in accordance with the Legal Opinion Accord (the "Accord") of the
ABA Section of Business Law (1991). As a consequence, it
24
<PAGE>
is subject to a number of qualifications and limitations, all as more
particularly described in the Accord, and this Opinion should be read in
conjunction therewith.
In connection with the preparation of this Opinion, I have examined the
following:
1. The Company's Articles of Incorporation and Bylaws;
2. The Registration Statement herein referenced;
3. The authorization and approval by the Company's Board of
Directors for the issuance to Mr. Ronald W. Welborn of 350,000
shares of the Company's common stock and the issuance to Mr.
Simon of 50,000 shares of the Company's common stock according to
the terms of the Consulting Agreements referenced herein;
4. A copy of the Consulting Agreements dated March 24, 2000;
5. The Company's Section 10(a) Prospectus for the Registration
Statement;
6. The Company's Form 10-SB as filed with the Securities and
Exchange Commission on October 26, 1999;
7. Such other documents as I have deemed necessary for the purposes
of this Opinion.
Additionally, I have made such investigations of federal law as I have
considered necessary and appropriate to form a basis for this opinion. My
opinion is qualified by the scope of the review specified herein and I make no
representations as to the sufficiency of my investigation for this opinion. I
further expressly exempt from this opinion any representations as to the
completeness, adequacy, accuracy or any other aspect of the financial statements
incorporated in the Registration Statement, or the performance by the Consultant
of any services not permissible for issuance of stock under an S-8 registration
statement.
The documentation and representations provided to me for this opinion
by the Company and its duly authorized representatives indicate that the Company
is validly organized under the laws of the State of Nevada; the Company is
current in its filings with the Commission; the Company's Board of Directors has
authorized the Consulting Agreements; the Company's Board of Directors has
authorized the filing of the Registration Statement; and that 400,000 shares of
the Company's common stock to be included in the Registration Statement are
available for issuance based upon corporate documentation and on the amount of
shares actually issued and outstanding. As such, I am of the opinion that the
Shares herein referenced have been duly and validly authorized and that subject
to compliance with all provisions of the Consulting Agreements, the Shares will
be validly issued as fully paid and non-assessable shares of common stock in the
Company.
This opinion is based upon and subject to the qualifications and
limitations specified below:
(A) Certain of the remedial provisions of the Consulting Agreements may
be further limited or rendered unenforceable by other applicable laws and
interpretations.
25
<PAGE>
(B) In rendering the opinion that the shares of the Common Stock to be
registered pursuant to the Registration Statement and issued under the
Consulting Agreements will be validly issued, fully paid and nonassessable, I
assumed that: (1) the Company's Board of Directors has exercised good faith in
establishing the value paid for the Shares; (2) all issuances and cancellations
of the capital stock of the Company will be fully and accurately reflected in
the Company's Stock Records as provided by the Company's transfer agent; and (3)
the consideration, as determined by the Company's Board of Directors, to be
received in exchange for each issuance of common stock of the Company, has been
paid in full and actually received by the Company.
(C) I have made no independent verification of the facts asserted to be
true and accurate by authorized representatives of the Company and have assumed
that no person or entity has engaged in fraud or misrepresentation regarding the
inducement relating to, or the execution or delivery of, the documents reviewed.
(D) In rendering this opinion I have assumed that all signatures are
genuine, that all documents submitted to me as copies conform substantially to
the originals, that all documents have been duly executed on or as of the date
represented on the documents, that execution and delivery of the documents was
duly authorized on the part of the parties, that all documents are legal, valid
and binding on the parties and that all corporate records are complete.
(E) I have assumed that the Company is satisfying the substantive
requirements of Form S-8 and I expressly disclaim any opinion regarding the
Company's compliance with such requirements, whether they are of federal or
state origin, or any opinion as to the subsequent tradeability or sale of any
Shares issued pursuant to the Consulting Agreements.
(F) I am admitted to practice law in the State of Utah. I am not
admitted to practice law in the State of Nevada or in any other jurisdiction
where the Company may own property or transact business. This opinion is with
respect to federal law only and I have not consulted legal counsel from any
other jurisdiction for the purpose of the opinion contained herein. I expressly
except from this opinion any opinion as to whether or to what extent a Nevada
court or any other court would apply Nevada law, or the law of any other state
or jurisdiction, to any particular aspect of the facts, circumstance and
transactions that are the subject of this opinion.
(G) This opinion is strictly limited to the parameters contained and
referenced herein and is valid only as to the signature date with respect to the
same. I assume no responsibility to advise you of any subsequent changes or
developments which might affect any aspect of this opinion.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement. This opinion may not be used, relied upon, circulated,
quoted or otherwise referenced in whole or in part for any purpose without my
written consent.
Sincerely,
/s/ Kim Taylor
Kim Taylor
26
Clyde Bailey, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
10924 Vance Jackson, Suite 404
San Antonio, TX 78230
April 13, 2000
Board of Directors
Genesis Capital Corporation of Nevada
11701 South Freeway
Burleson, TX 76028
Gentlemen:
We hereby consent to the inclusion in your Form S-8 registration
statement of our audit report, dated October 20, 1999, of Genesis Capital
Corporation of Nevada and subsidiaries, for the years ended September 1999 and
1998.
Very truly yours,
CLYDE BAILEY, P.C.
/s/ Clyde Bailey
------------------------
By: Clyde Bailey
27
