User Agreement - Acquisitions Pilot Project (APP)
and GenX Zero (GXZ) (now GenX Zero 2.0)

This agreement (this “Agreement”) is by and between GenX Capital Group (“GenX”) and the user (whether paid or free, the “Member” or “User” or “Participant”) of Acquisitions Pilot Project (TM) or GenX Zero (TM) (“APP” or “GXZ” respectively, or generally this Offering as defined in the Terms), and is effective immediately upon the User’s purchasing, using, or otherwise participating in this Offering, and User hereby consents to the such action by User as its intended execution of, and assent to, this Agreement as equivalent to a hand written signature. Furthermore, this Agreement hereby incorporates by reference the General Terms and Conditions (the “Terms”) agreed to by User upon purchasing or using any Offering as defined therein, and made effective as stated therein. Any capitalized word not defined herein has the same meaning as defined in the Terms. The parties hereto acknowledge, understand, and agree to the following:

1. GXZ vs APP. GXZ is a subcategory of APP, and therefore all terms of this Agreement applicable to APP are also applicable to GXZ without specific reference to GXZ, unless otherwise stated herein.

2. The Venture. The parties hereto agree to cooperate in good faith with each other for the purpose of GenX leading, facilitating, and executing Participant’s selection, negotiation, structuring, and purchase of a business (a “Company”) meeting certain target criteria, and thereafter, entering into the roll up phase of the venture through the GenX Roll Up InsiderTM solution.

   1. Objectives – The following are objectives of the parties hereto, although these objectives do not constitute obligations or guarantees by either party.

      1. Purchase of a Company in 4 months or less after Participant’s start of APP based on typical circumstances which depend heavily on Participant’s timely cooperation with the process of the venture including the SBA process.

      2. Hands-off ownership by Participant except for the SBA process. Otherwise Participant’s involvement may be active or passive at Participant’s option.

      3. Post acquisition roll up of the Company with other Portfolio Companies.

      4. 6 figure annual profit to Participant beginning as of the day after purchase of a Company, subject to proration for JV Participants if applicable.

      5. 2-3 year hold period. GenX reserves the right to accelerate or delay sale of a Company in order to maximize profitability, and avoid unfavorable market timing.

      6. Meet the requirements of a Prototype Deal (defined below). This is a mission critical objective. The Venture and all related financial models and projections assume that every Company conforms as closely as possible to the same standard deal parameters (the “Prototype Deal”), and that although every deal will have its own deviations from the Prototype, GenX will make strategic adjustments to cause the deal to be as consistent with the Prototype as possible. The Prototype deal is purchased at a price of $3-5 million at an EBITDA multiple up to 3X.

3. Ownership Split. The Company ownership shares shall be owned by a designated LLC or other legal entity with GenX being the managing member (or comparable role for non-LLCs) thereof. APP Participants shall own 90% of the cash flow of the Company and 90% of its equity based on an EBITDA multiple of 3 or a lower multiple at purchase if bought during membership with GenX. GXZ Participants shall own 80% of the cash flow of the Company and 80% of its equity based on an EBITDA multiple of 3 or a lower multiple at purchase if bought during membership with GenX.

4. GenX will make reasonable best efforts to facilitate Member’s SBA funding application and approval for User’s purchase of a Company. Such approval, although probable, is not guaranteed, and is the decision of the lender. GenX is in no way responsible for such approval or lack thereof.

5. Member agrees to comply with requests made by lender or its representative during the underwriting process.

6. Coaching calls are limited to 1 hour per week in a group format.

7. Support questions regarding content or doing deals should be asked during coaching calls. Technical questions, or those regarding purchases or billing may be addressed by email.

8. GenX will facilitate hiring and managing through its contacts an executive operator (“EO”), including their termination or replacement if needed, but is not liable for their performance or any claims arising from the EO or this service.

9. Off market deals are not currently included with APP.

10. All APP Members are required to participate in GenX Roll Up InsiderTM (GRI), GenX’s proprietary and exclusive roll up platform. GRI is free for APP Members. Member participation in GRI is the primary incentive for GenX to offer APP at such a low price, i.e. to build its GRI participation. Member’s entering into APP constitutes his/her consent to be in GRI. If Member is not willing to do so, then a paid GenX product would be necessary for Member to exit their business independently of GenX, and even keep their business indefinitely.

11. As is typical in the structure of a roll up, each participating company in the roll up requires transferring into the portfolio. Despite this, the equivalent cash flow and equity from each Member’s or customer’s companies continues to be disbursed to them in the ordinary course as customary in the industry. Member agrees to execute all documents relating to GRI for Member’s Company to be added to the GenX roll up portfolio, and be managed by GenX until sale.

12. APP Members can contribute as little as $50,000 in cash toward the down payment (the “Down Payment”) for the purchase of a Company. GXZ Members do not contribute a Down Payment. If a Member contributes less than $300,000 toward a down payment, Member may at GenX’s discretion participate in a joint ownership arrangement with cash partners or investors (such arrangement, joint venture or “JV”) structured and managed by GenX, in which case Member’s sole point of contact in the JV will be GenX, as the manager, and Member will not interact with others in the JV. APP Members’ share of the 90% ownership in the JV Company will be proportionate to his or her cash Down Payment in the deal. Furthermore, APP Members in a JV receive lower GRI profit sharing percentages than non-JV Members, and GXZ Members of course do not participate in GRI profit sharing. See GenX Roll Up Insider (TM) Participation Options Table for further details.

13. Role of GenX. The role of GenX in the venture is extensive, and includes the following activities: (a) coordination, oversight, and management of the venture and its Participants, (b) Company analysis and selection, (c) SBA lender management if applicable, (d) roll up management, (e) staffing decisions, (f) growth strategies and value creation, and (g) corporate development.

14. Role of Participant in GRI. GenX may at its discretion cancel this Agreement if Member does not perform the Member GRI roles specified below:

    1. Acquisition. The primary role of Participant in GRI is to close on the acquisition of a Company to be funded by an SBA lender. Participant’s role during the acquisition stage includes (i) tendering to GenX, SBA personnel or representatives of Companies, proof of funds (POF) and cover letter (form provided by GenX) authorizing GenX to represent Member in the acquisition process as Member’s JV partner, or other related documents, in the amount equal to or exceeding the required down payment, and hereby consents to submission by GenX of such POF to SBA personnel or representatives of Companies, including collective submission of POFs with other Participants (not visible by other Participants), at the discretion of GenX, for the purpose of evaluating and pursuing prospective Companies, (ii) signing letters of intent, purchase agreements, and other customary documents required to buy a Company, and (iii) cooperating with the SBA lender in this process which is a key element of Participant’s role.

    2. Following the Strategic Plan. There may be several viable strategic approaches to acquisitions and roll ups, and with many Participants in GRI, there may be differing opinions during the course of the venture. So it is important that Participants cooperate with GenX in following the venture’s strategy and business model, notwithstanding any strategic preferences by Participant. This is especially important during the roll up phase. The GenX team and third parties engaged by GenX are highly experienced, and GenX incorporates redundancies for quality control. GenX is happy to consider input and concerns raised by Participants, but ultimately GenX will need to make final decisions. Roll ups are successful only when the constituent companies are strategically aligned. Accordingly, Participant hereby acknowledges and agrees (i) to the role of GenX as general partner, managing member, or similar managing position in GRI related entities, all of which GenX holds a financial interest in, including Participant’s Company, and (ii) that Participant will execute any and all documents before, during, or after acquisition of a Company to formalize or ratify any such position of GenX, including amendments or supplemental documents for such purpose.

15. Participant Representations. Participant represents and warrants that he or she meets the qualifications of this membership which are that he or she: (a) has the Down Payment (except for GXZ Members) he or she specifies in this section below or in other information provided by Participant, and the profession, work experience, management and leadership experience specified therein, (b) has a 680 credit score or above, (c) is a US citizen, (d) has not defaulted on any federal loans or taxes, and (e) has not previously filed bankruptcy. GenX may terminate this Agreement if any representation in this paragraph or elsewhere in this Agreement, the GRI Information Form, or other requested information provided by Participant are not true.

16. JV Structure Delays. Participant acknowledges, understands, and agrees that the legal, logistical, and business arrangements required in order to structure JV deals take time and are subject to factors outside of GenX's control, especially relating to the JV partner or investor, and therefore GenX makes no representations or warranties relating to the speed or timing of such arrangements, and is not responsible or liable for the consequences relating thereto, including the availability of any particular acquisition opportunity and the timing thereof.

17. Free and Discounted Memberships. Participant acknowledges, understands, and agrees that (i) although a membership may be free or discounted to Participant, the venture requires substantial staffing, expertise, and expense by GenX and third parties in order to meet the objectives of the parties hereto, (ii) neither Participant nor GenX is expected to pay out of pocket costs for any of such expenses, (iii) however, the Companies shall pay all such expenses upon or after acquisition of a Company as part of the growth strategy reinvestments, including fees to GenX, such as are customary private equity fees for acquisition success, management, consulting, and roll up & integration services, as well as operating and managing APP. All GenX fees are hereby deemed earned upon receipt by GenX.

18. Proof of Funds. GRI Participants (excluding GXZ Members) are required to provide to GenX proof of funds (“POF”) (account numbers masked) to ensure qualification. The POF must show at least $50,000, but should also show no less than the amount of the Down Payment Participant is expecting to put into the purchase of the company her or she acquires through Participant's membership.

    1. The POF may be from any source (including 401k/IRA) but must show Participant's name, or if it belongs to a financial partner, it must also include a short signed letter from that person stating that they are providing the money including a email or phone number for verifycation.

    2. The POF must be provided to GenX via email no later than 5 days after starting membership or services may be suspended until receiving the POF.

19. GXZ Supplemental Terms and Conditions Effective November 28, 2024

    1. New Features. As of November 28th, 2024, GenX Zero 2.0 has replaced the original GenX Zero solution. This change has increased the number of included features offered at no additional charge if and when they are applicable on a deal by deal basis. They are the following:

       1. Cover the down payment, and provide one of the fastest and best SBA funders in the nation

       2. ​Find a suitable Company to buy that fits the GenX requirements

       3. Handle all interactions and negotiations including with brokers, sellers, lenders investors, and attorneys

       4. Provide proof of funds if needed

       5. Perform due diligence

       6. Close the purchase transaction using an in-house or outside GenX attorney

       7. Select a 20-30 year specialist to operate the Company after closing, thereby replacing the former owner

       8. Design and implement a strategy to multiply the value of the Company using proven private equity strategies

       9. Design and implement a strategy to find an exit buyer for the Company to close the sale for a profit within 2-3 years

    2. GenX’s Discretion. Member acknowledges, understands, and agrees that all the features may not be applicable to every deal, and that GenX shall use its professional judgment in how to best proceed with a deal, or whether to cancel a deal if the best interests of the Member and GenX are not being satisfied, which is to legally and ethically make a profit from the Company and the venture overall.

    3. Legal. The GenX attorney is serving as a transactional attorney representing the deal and not the Member exclusively, and accordingly the Member is free to hire an independent attorney at the Member’s expense (which may be reimbursed by the Company at or soon after purchase closing) to represent the Member exclusively.

    4. 19% Ownership. A fundamental feature and objective of GenX Zero is to remove the down payment burden for the Member in acquiring a Company. The Member expressly acknowledges, understands and agrees that GenX may accomplish this in any legal manner it chooses including without limitation leveraging the assets of the Company, strategic deal structuring, or procuring an investor (the “Investor”) for the down payment, but in all cases this requires one or more of the following from GenX: substantial investment of time, financial relationships, expertise, or compensation of an Investor. Therefore, GenX Zero deals allocate 19% ownership of the Company to GenX and/or the Investor, which is further allocated between GenX and the Investor, if any, at the discretion of GenX on a deal by deal basis. GenX, who typically allocates around 10% ownership to itself, assumes the risk or reward of its share being lower or higher than this after compensating the Investor. Furthermore, GenX may select any party to be the Investor at its discretion, including the seller of the Company, a third party, or GenX itself. 

    5. Cancellation or Replacement of Deal. GenX reserves the right to cancel or replace any acquisition prior to closing if GenX determines that the deal involves issues that it is not comfortable with, such as without limitation, issues relating to risk, profitability, diligence, unresolved questions, deal terms, funding requirements, relational difficulties with the seller or other parties, unfavorable economic or market events, factors or events that prevent GenX’s or a Member’s ability to perform under the Agreement (otherwise known as force majeure events). All GenX acquisitions are designed to require no more than 15% cash at closing. In the rare event that this is not possible, GenX may cancel the transaction.