EXHIBIT 10.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is dated as of August 29, 1997
and entered into by and between AMERICAN TECHNOLOGIES GROUP INC., a Nevada
corporation ("ATG"), and XXXXXXX X. XXXXXX ("Xxxxxx"), and is made with respect
to the following:
A. WHEREAS, ATG desires to obtain the services of Xxxxxx to provide
certain financial and other general services;
B. WHEREAS, Xxxxxx is willing to provide such services to ATG;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, THE PARTIES HERETO HEREBY AGREE AS FOLLOWS:
1. CONSULTING SERVICES. Xxxxxx shall provide consulting services to ATG
as described above.
2. TERM. This Agreement shall commence on the date hereof and shall
expire on November 30, 1997 unless terminated prior thereto upon fifteen (15)
days advance written notice by either party for any reason or no reason.
3. COMPENSATION. As full compensation for all services to be performed by
Xxxxxx ATG hereby grants to Xxxxxx the right and option (the "Option") to
purchase, on the terms and conditions hereinafter set forth, an aggregate of
twenty-five thousand (25,000) shares of the common stock of ATG (the "Option
Shares"). The exercise price (the "Exercise Price") of the Option Shares is
$2.63 per share, payable in cash or by the cancellation of a number of the
Options equal in value to the Exercise Price of the shares to be acquired.
4. TIME AND MANNER OF OPTION EXERCISE: The right to exercise the Option
as to (i) eight thousand (8,000) shares of Common Stock shall vest on September
30, 1997, (ii) eight thousand (8,000) shares of Common Stock shall vest on
October 31, 1997 and (iii) nine thousand (9,000) shares of Common Stock shall
vest on November 30, 1997 and Xxxxxx shall have the right to purchase from ATG
the vested Option Shares at any time and from time to time until August 31,
2002. The purchase shall be made by delivery to ATG of a notice of exercise
accompanied by a check in the amount of the aggregate Exercise Price or by
cashless exercise through the cancellation of Options equal in value to the
exercise price of the shares to be acquired. Promptly upon
receipt of such material, ATG shall cause the delivery to Xxxxxx of an ATG stock
certificate representing the Option Shares.
5. OPTIONEE'S REPRESENTATIONS:
Xxxxxx hereby warrants and represents to ATG as follows, each of which
representation and warranty is material and is being relied upon by ATG and each
of which is true at and as of the date hereof and upon exercise of the Option:
5.1 INVESTMENT INTENT. that Xxxxxx is acquiring the Option, and if
Xxxxxx exercises the Option will acquire the Option Shares, for Xxxxxx'x own
account and not with a view to their resale or distribution and that Xxxxxx is
prepared to hold the Option and the Option Shares, if acquired, for an
indefinite period and has no present intention to sell, distribute or grant any
participating interests in the Option or the Option Shares, if acquired. Xxxxxx
hereby acknowledges the fact that the Option Shares will not be registered under
the Securities Act of 1933, as amended (the "1933 Act") or the California
Corporations Code.
5.2 RESTRICTED SECURITIES. that Xxxxxx has been informed that the
Option and the Option Shares may not be resold or transferred unless first
registered under the Federal and California securities laws or unless an
exemption from such registration is available. Accordingly, Xxxxxx hereby
acknowledges that Xxxxxx is prepared to hold the Option and the Option Shares
for an indefinite period of time.
5.3 XXXXXX KNOWLEDGE. that Xxxxxx has a preexisting business or
personal relationship with ATG, that he is aware of the business affairs and
financial condition of ATG and that Xxxxxx has such knowledge and experience in
business and financial matters with respect to companies in businesses similar
to ATG to enable Xxxxxx to evaluate the risks of the prospective investment and
to make an informed investment decision with respect thereto. Xxxxxx further
acknowledges that ATG has made available to Xxxxxx the opportunity to ask
questions and receive answers from ATG concerning the terms and conditions of
the issuance of the Option and the Option Shares and that Xxxxxx could be
reasonably assumed to have the capacity to protect his own interests in
connection with such investment.
5.4 SPECULATIVE INVESTMENT. that Xxxxxx realizes that his purchase
of the Option and the Option Shares will be a speculative investment and that
Xxxxxx is able, without impairing his financial condition, to hold the Option
and the Option Shares for an indefinite period of time and to suffer a complete
loss of his investment.
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6. NO TRANSFER: Xxxxxx shall not transfer, encumber, alienate or dispose,
by gift or otherwise, all or any part of the Option or Option Shares, except as
may be permitted by law.
7. RESTRICTIVE LEGEND: In order to reflect the restrictions on
disposition of the Option Shares, the stock certificates for such shares will be
endorsed with the a legend substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933 OR APPLICABLE STATE LAW, AND
MAY NOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION THEREUNDER OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
8. ADJUSTMENT IN OPTION SHARES.
8.1 STOCK SPLIT. In the event any change is made to the Common Stock
issuable hereunder by reason of any stock split, stock dividend, combination of
shares, or other change affecting the outstanding Common Stock as a class
without receipt of consideration, then appropriate adjustments will be made to
(i) the total number of Optioned Shares subject to the Option and (ii) the then
existing Exercise Price payable per Option Share in order to reflect such change
and thereby preclude a dilution or enlargement of benefits hereunder.
8.2 MERGER. If the Company is the surviving entity in any merger or
other business combination, then the Option, if outstanding immediately after
such merger or other business combination shall be appropriately adjusted to
apply and pertain to the number and class of securities to which Xxxxxx
immediately prior to such merger or other business combination would have been
entitled to receive in the consummation of such merger or other business
combination.
9. PRIVILEGE OF STOCK OWNERSHIP. The holder of this Option shall not
have any of the rights of a shareholder with respect to the Optioned Shares
until such individual shall have exercised the Option and paid the Exercise
Price in accordance with this Agreement.
10. REGISTRATION RIGHTS. If at any time Xxxxxx desires to exercise the
Option between December 1, 1997 and June 1, 1998, Xxxxxx shall so notify ATG in
writing and as soon as practicable thereafter ATG shall file a registration
statement on Form S-8 or other applicable form with the Securities and Exchange
Commission
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covering the Shares, at Xxxxxx'x expense which shall not exceed five Thousand
Dollars ($5,000).
11. INDEPENDENT CONTRACTOR. The parties acknowledge that this Agreement
does not create an employee/employer relationship and Xxxxxx shall be acting as
an independent contractor of ATG.
12 NOTICES. Any and all notices or other communications required or
permitted by this Agreement or by law shall be deemed duly served and given when
actually received by personal delivery or by certified mail, return receipt
requested, with first class postage prepaid thereon, to the party to whom such
notice or communication is directed, addressed as follows:
ATG: AMERICAN TECHNOLOGIES GROUP, INC.
0000 xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Xxxxxx: XXXXXXX X. XXXXXX
00000 Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Each of the parties hereto may change its address for purposes of this
Section 12 by giving written notice of such change in the manner provided for in
this Section 12.
13. ATTORNEY'S FEES AND EXPENSES. In the event that it should become
necessary for any party to this Agreement to bring an action, including
arbitration, either at law or in equity, to enforce or interpret the terms of
this Agreement, the prevailing party in such action shall be entitled to recover
its reasonable attorneys' fees and expenses as a part of any judgment therein,
in addition to any other award which may be granted.
14. APPLICABLE LAW/VENUE. This Agreement is executed and intended to be
performed in the State of California and the laws of such state shall govern its
interpretation and effect. If suit is instituted by any party hereto by any
other party hereto for any cause or matter arising from or in connection with
the respective rights or obligations of the parties hereunder, the sole
jurisdiction and venue for such action shall be the Superior Court of the State
of California in and for the County of Los Angeles.
15. INTEGRATED AGREEMENT. As to the subject matter of this Agreement,
this Agreement constitutes the entire agreement of the parties and supersedes
all prior agreements between the parties and all such prior agreements shall be
deemed voluntarily
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terminated by the mutual consent of the parties hereto and shall be of no
further force or effect.
16. ASSIGNMENT. This Agreement is not assignable but shall be binding
upon and shall inure to the benefit of the successors of each party hereto.
17. SEVERABILITY. Any provision in this Agreement which is, by competent
judicial authority, declared illegal, invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without invalidating the
remaining provisions hereof or affecting the legality, validity or
enforceability of such provision in any other jurisdiction. The parties hereto
agree to negotiate in good faith to replace any illegal, invalid or
unenforceable provision of this Agreement with a legal, valid and enforceable
provision that, to the extent possible, will preserve the economic bargain of
this Agreement, or otherwise to amend this Agreement, including the provision
relating to choice of law, to achieve such result.
18. NON-COMPETITION. During the term hereof, Xxxxxx shall not, directly
or indirectly, whether as an employee, employer, consultant, agent, officer,
principal, partner, stockholder, director or any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner with the business of ATG.
19. WAIVER. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the waiver.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
American Technologies Group, Inc.,
a Nevada corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Executive Officer
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