ADVISORY AND CONSULTING AGREEMENT
THIS ADVISORY AND CONSULTING AGREEMENT ( the "Agreement") is made this
day of January 2001, by and between David Michael L.L.C., a Utah Limited
Liability Company ("Advisor") and TRSG Corporation., a Delaware corporation with
its offices located in North Las Vegas, Nevada (the "Company").
WHEREAS, Advisor and Advisors's Personnel (as defined below) have
experience in evaluating and effecting financing for public and privately-held
companies, advising corporate management, and in performing general
administrative duties for publicly-held companies and development stage
investment ventures; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in financing its development 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 Advisor
agree as follows:
1. Engagement
The Company hereby retains Advisor, effective as of the date hereof (
the "Effective Date") and continuing until termination, as provided
herein, to act as financial advisor to the Company in connection with
the proposed financing (the "Financing") of the Company. As part of the
Financing, Advisor will assist the Company and its professional
advisors in the preparation of documentation, offering circular(s),
explanatory or disclosure statement(s), consent solicitation and
investor relations (collectively "Services") pursuant to any and
Financing arrangements made through Advisor. The Financing and Services
are to be provided on a "best efforts" basis, provided, however, that
the Services shall expressly exclude all legal advice, accounting
services or other services which require licenses or certification
which Advisor may not have.
In the course of providing the Services, Advisor will (a) become
familiar with, to the extent the Company deems appropriate, information
to be provided by the Company to enable Advisor to analyze the
business, operations, properties, financial condition, prospects and
projects of the Company; (b) assist and advise the Company in
developing a general strategy for accomplishing the Financing; (c)
assist and advise the Company with regard to potential Financing of the
transaction; and (d) render such other financial advisory services as
may from time to time be mutually agreed upon by the Company and
Advisor.
2. Information on the Company
In connection with Advisor's activities hereunder, the Company will
furnish Advisor with all material and information regarding the
business and financial condition of the Company (all such information
so furnished being referred to herein as the "Information"). The
Company recognizes and acknowledges that Advisor (a) will use and rely
solely on the Information, and on information available from generally
recognized public sources, in performing the Services contemplated by
this Agreement without having independently verified the same; (b) does
not
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assume responsibility for the accuracy or completeness of the
Information; (c) will not make an appraisal of any assets or
liabilities of the Company; and (d) retains the right to continue to
conduct due diligence during the term of this Agreement.
3. Use of Advice
Except as required by a court having jurisdiction over the Company, no
statements made or advice rendered by Advisor in connection with the
Services performed by the Advisor pursuant to this Agreement will be
quoted by, nor will any such statements or advice be referred to, in
any report, document, release or other communication, whether written
or oral, prepared, issued or transmitted by the Company or any person
or corporation controlling, controlled by or under common control with,
the Company or any director, officer, employee, agent or representative
of any such person, without the prior written consent to the extent
required by law (in which case the appropriate party shall so advise
Advisor in writing prior to such use and shall consult with Advisor
with respect to the form and timing of disclosure), provided that the
foregoing shall not prohibit appropriate internal communication or
reference with respect to such advice internally within such parties
and provided further that the Company shall be permitted to use the
information, after appropriate review by Advisor, to support its
efforts to effect the Financing.
4. Term
This Agreement shall have an initial term of twelve (12) months (the
"Primary Term"), commencing with the Effective Date. At the conclusion
of the Primary Term this Agreement will automatically be extended for
the same term ( the "Extension Period") unless Advisor or the Company
shall serve written notice on the other party terminating the
Agreement. Any notice to terminate given hereunder shall be in writing
and shall be delivered at least thirty (30) days prior to the end of
the Primary Term or any subsequent Extension Period.
5. Time and Effort of Advisor
Advisor shall allocate time and Advisors Personnel as it deems
necessary to provide the Services. The particular amount of time may
vary from day to day or week to week. Except as otherwise agreed,
Advisor's monthly statement identifying, in general, tasks performed
for the Company shall be conclusive evidence that the Services have
been performed. Additionally, in the absence of willful misfeasance,
bad faith, negligence or reckless disregard for the obligations or
duties hereunder by Advisor, neither Advisor nor Advisor'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 act involved in respect to any Financing undertaken by the
Company as a result of introductions or advice provided by Advisor or
Advisors's Personnel.
6. Compensation
The Company agrees to pay Advisor a fee for the Services ("Advisory
Fee") provided by Advisor pursuant to this Agreement, as follows:
The Advisor shall be paid the sum of Six Hundred Fifty Thousand
dollars ($650,000) in cash for the Services as provided for
herein. Said
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amount shall be paid not less than six months from the date
hereof, payment of this amount shall be secured by shares of the
common stock of the Company in the amount of 11,448,660 shares,
the shares shall serve as collateral for the full payment of the
Advisory Fee as provided for in this paragraph and in the event
of full payment all such shares shall be returned to the Company.
7. Costs and Expenses
All third party and out-of-pocket expenses incurred by Advisor in the
performance of the Services or for the settlement of debts shall be
paid by the Company, or Advisor shall be reimbursed if paid by Advisor
on behalf of the Company, within ten (10) days of receipt of written
notice by Consultant, provided that the Company must approve in advance
all such expenses in excess of $100 per month.
8. Place of Services
The Services provided by Advisor or Advisor's Personnel hereunder will
be performed at Advisor's offices except as otherwise mutually agreed
by Advisor and the Company.
9. Independent Contractor
Advisor and Advisor's Personnel will act as an independent contractor
in the performance of its duties under this Agreement. Accordingly,
Advisor will be responsible for payment of 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 Advisor's Personnel, and any and all business license
fees as may be required. This Agreement neither expressly nor impliedly
creates a relationship of principal and agent, or employee and
employer, between Advisor's Personnel and the Company. Neither Advisor
nor Advisor'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, each Financing Opportunity introduced
by Advisor, and to make all final decisions with respect to effecting a
transaction on any Financing.
10. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship
of principal and agent between the Company and Advisor, or employee and
employer as between Advisor's Personnel and the Company.
11. Termination
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written notice
with mutual written consent. Failing to have mutual consent, without
prejudice to any other remedy to which the terminating party may be
entitled, if any, either party may terminate this Agreement with thirty
(30) days written notice under the following conditions:
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(A) By the Company.
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(i) If during the Primary Term of this Agreement or any
Extension Period, Advisor is unable to provide the
Services as set forth herein for thirty (30)
consecutive business days because of illness,
accident, or other incapacity of Advisor's Personnel;
or,
(ii) If Advisor willfully breaches or neglects the duties
required to be performed hereunder; or,
(iii) At Company's option without cause upon 30 days
written notice to Advisor; or
(B) By Advisor.
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(i) If the Company breaches this Agreement or fails to
make any payments or provide information required
hereunder; or,
(ii) If the Company ceases business or, other than in an
Initial Merger, 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
of the scope of this Agreement; or,
(iii) If the Company subsequent to the execution hereof has
a receiver appointed for its business or assets, or
otherwise becomes insolvent or unable to timely
satisfy its obligations in the ordinary course of,
including but not limited to the obligation to pay
the Initial Fee, the Transaction fee, or the Advisory
Fee; or,
(iv) If the Company subsequent to the execution hereof
institutes, makes a general assignment for the
benefit of creditors, has instituted against it any
bankruptcy proceeding for reorganization for
rearrangement of its financial affairs, files a
petition in a court of bankruptcy, or is adjudicated
a bankrupt; or,
(v) If any of the disclosures made herein or subsequent
hereto by the Company to Consultant are determined to
be materially false or misleading.
In the event Advisor elects to terminate without cause or this
Agreement is terminated prior to the expiration of the Primary Term or
any Extension Period by mutual written agreement, or by the Company for
the reasons set forth in A(i) and (ii) above, the Company shall only be
responsible to pay Advisor for any unreimbursed expenses and Advisory
Fee accrued up to and including the effective date of termination. If
this Agreement is terminated by the Company for any other reason, or by
Advisor for reasons set forth in B(i) through (v) above, Advisor shall
be entitled to any outstanding unpaid portion of reimbursable expenses,
if any, and for the remainder of the unexpired portion of the
applicable term (Primary Term or Extension Period) of the Agreement.
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12. Indemnification
Subject to the provisions herein, the Company and Advisor agree to
indemnify, defend and hold each other harmless from and against all
demands, claims, actions, losses, damages, liabilities, costs and
expenses, including without limitation, interest, penalties and
attorneys' fees and expenses asserted against or imposed or incurred by
either party by reason of or resulting from any action or a breach of
any representation, warranty, covenant, condition, or agreement of the
other party to this Agreement.
13. Remedies
Advisor 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 nonexclusive and shall be
in addition to any other remedy to which the parties may be entitled.
14. Miscellaneous
(A) Subsequent Events. Advisor 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 and 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 noncompliance with this
Agreement shall be held to be a waiver of any other or subsequent
breach or noncompliance.
(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, when deposited in the United States mails for
transmittal by certified or registered mail, postage prepaid, or
when deposited with a public telegraph company for transmittal,
or when sent by facsimile transmission charges prepared,
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provided that the communication is addressed:
(i) In the case of the Company: TRSG Corporation
500 East Cheyenne Ave.
North Las Vegas, Nevada 89030
Telephone: (702) 399-4328
Telefax (702) 642-4499
(ii) In the case of Advisor: David Michael LLC
3809 South West Temple
Salt Lake City, Utah 84115
Telephone: (801) 281-0001
Telefax: (801) 281-8763
or to such other person or address designated in writing by the Company or
Advisor to receive notice.
(G) Headings. The section and subsection 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 Utah, and shall be governed by the laws of the
State of Utah, the United States of America, not withstanding any
conflict-of-law provision to the contrary.
(I) Binding Effect. This Agreement shall be binding upon 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
understan dings, 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, have been made by any party.
(K) Severability. If any part of this Agreement is deemed to be
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 effective 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.
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(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 the
date above written.
The "Company" "Advisor"
TRSG Corporation David Michael LLC
A Delaware Corporation A Utah Limited Liability Company
By: /s/ Rick Bailey By: /s/ David Wolfson
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Name: Name:
Title: President Title:
