CONSULTING AGREEMENT
This Consulting Agreement is made effective this 30 day of August, 1995
by and between A-Z Professional Consultants, Inc. (hereinafter "Consultant") a
Utah corporation with offices at 000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx 00000, and The Canton Industrial Corporation, Inc., a Nevada corporation
(hereinafter "Client" or "Canton") with offices at 000 Xxxx 000 Xxxxx, Xxxxx
000, with respect to the following:
RECITALS
WHEREAS, Consultant is in the business of providing marketing and
general business consulting services to privately held and publicly-held
corporations, and has successfully provided said services in the past on behalf
of Canton; and
WHEREAS, Client desires to retain Consultant to provide advice and to
consult with Client's management concerning its growth strategy, potential
business relations, its financial relations, public relations, communication
relations, general obligations, and other matters connected to Client's
business.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Client and Consultant
agree as follows:
1. Engagement of Consultant.
Client hereby retains Consultant to assist it by: (a) introducing
Client to potential business partners; (b) introduce Client to potential
acquisition or merger candidates in the form of business opportunities known to
Consultant; (c) investigate and make recommendations to Client relating to the
purchase, management, financing and acquisition of real property and business
opportunities; (d) provide information and counsel relative to procurement of
information, and assets through barter exchanges; and, (e) assisting Client in
the development of a practical and effective financial public relations program,
including but not limited to the following:
* Introduction to the Client of business opportunities,
acquisition of assets opportunities, merger candidates
currently known to Consultant, or providing information by
Consultant which is directed at increasing Client's overall
value;
* Searching for acquisitions of operations and assets which
may aid Client in becoming a more profitable concern; and
* Assisting Client in formulation of responses to requests for
information from Investment Advisory Newsletters, which actual
responses shall be made by Client.
And Consultant shall additionally provide any services that the Client
shall request from time to time, all of which foregoing services are
collectively referred to herein as the "Consulting Services."
2. Compensation.
A. Client shall pay Consultant a monthly consulting fee of 40,000
shares of 144 restricted common stock of The Canton Industrial Corporation,
which may be registered under an S-8 or other available registration.
B. Client will provide Consultant with reasonable office space (as
determined by the Board), along with secretarial services at no cost to
Consultant during the term of this agreement.
C. Consultant shall receive a commission of 10% on any transactions
(whether said transactions are in cash or kind) which Consultant is instrumental
in bringing into the company, when and as actually received by the Client.
3. Term of Agreement, Extensions and Renewals.
This Consulting Agreement shall have an initial term of one (1) year
(the "Initial Consulting Period") from the date above written. Thereafter, this
Agreement may be extended on a month to month basis (the "Extension Period") by
mutual agreement of the parties executed in writing specifying the compensation
for the Extension Period. Notice of an extension shall be made by giving written
notice, at least ten (10) days prior to the end of the Initial Consulting
Period, or any subsequent extension period. In the event of termination neither
party shall have any further rights or obligations hereunder after the effective
date of such termination except for the obligation of Client to reimburse the
reasonable costs and expenses of Consultant, which shall continue until paid in
full by Client.
4. Termination of Agreement by the Client.
Despite anything to the contrary contained in this Agreement hereunder,
Client may terminate this Agreement if any of the following events occur:
A. Failure to Follow Instructions. Client can terminate this
Agreement upon approval of a simple majority the Board of
Directors, if the Consultant fails to follow Client's
instructions. Client must advise Consultant that the
Consultant's actions or inactions are unacceptable and give
Consultant a reasonable time (30 days) to comply. If
Consultant fails to comply, or at a later time makes the same
unacceptable action or inaction it can be terminated hereunder
by Client's service of notice of termination to Consultant.
B. Breach of Consultant's Duties. Client can terminate this
Agreement if, in the sole judgment of the Board of Directors,
Consultant's actions or conduct would make it unreasonable to
require Client to retain Consultant. Such acts include, but
are not limited to, dishonesty, illegal activities, activities
harmful to the reputation of the Client, or activities which
may create civil or criminal liability for the Client.
C. Sale of Clients Assets. The sale of substantially all of
Client's assets to a single purchaser or group of associated
purchasers.
D. Termination of Client's Business. Client's bona fide
decision to terminate its business and liquidate its assets.
E. Consultant's incapacity to perform. Consultant's agreement
shall remain in full force and effect for the duration of this
Agreement. However, if Consultant is unable to provide his
services during any time this Agreement covers, payments
attributable or otherwise payable to Consultant under the
terms and conditions of this Agreement shall be temporarily
abated, and void during the period of Consultant's incapacity,
and shall not be subject to a future claim.
5. Confidential Information.
In consideration for the Client entering into this Agreement,
Consultant agrees that certain items and methods of business used in the
Client's business are secret, confidential, unique, and valuable. Both parties
agree much of the information described in this paragraph has been produced by
the joint efforts of the parties, at great cost and over a long period of time.
The parties agree that disclosure of any proprietary, non public information to
anyone other than Client's officers, agents, or authorized employees will cause
Client irreparable injury. Said proprietary and "inside information" includes,
but is not limited to:
A. Non public financial information, accounting information,
plans of operations, and plans of possible mergers or
acquisitions prior to the public announcement;
B. Customer lists, call lists, consultant lists, business
contact lists and other confidential customer data; or
C. Memoranda, notes, records concerning the technical, legal
and procedural processes conducted by Client.
6. Due Diligence.
Client has heretofore supplied and delivered to Consultant all
requested information relating to its business, so as to enable Consultant to
verify or substantiate any information necessary to enter into this agreement.
7. Best Efforts Basis.
Consultant agrees that it will at all times faithfully and to the best
of its' experience, ability and talents, perform all the duties that may be
required of and from Consultant pursuant to the terms of this Agreement.
Consultant does not guarantee that its efforts will have any impact on Client's
business or that any subsequent financial improvement will result from
Consultant's efforts. Client understands and acknowledges that the success or
failure of Consultant's efforts may be predicated on Client's assets and
operating results.
8. Client's Right to Approve Transactions.
Client expressly retains the right to approve of disapprove, in its
sole discretion, each and every transaction introduced by Consultant that
involves Client as a party to any agreement, including a sale of all or
substantially all of its assets. Consultant and Client mutually agree that
Consultant is not authorized to enter into any agreements on behalf of Client.
9. Client Under No Duty or Obligation to Accept or Close on any
Transactions.
It is mutually understood and agreed that Client is not obligated to
accept or close any promotional proposal, financing arrangements, purchase
agreements, or acquisition or merger transactions submitted by Consultant to
Client.
10. Place of Services.
The Consulting Services contemplated to be performed by Consultant
pursuant to this Agreement will be performed through Consultant's offices,
however, it is understood and expected that Consultant may make contacts with
persons and entities in any other places deemed appropriate by Consultant.
Additionally, since time is of the essence in many of the transactions Client
undertakes, Client agrees to provide Consultant with office space, if reasonably
available, wherever Client may located it's offices from time to time.
11. Costs and Expenses.
Consultant shall be reimbursed for all reasonable pre-approved
out-of-pocket expenses, filing fees, copy and mailing expenses, and credit card
expenses that Consultant may incur on Clients behalf in performing Consulting
Services under this Agreement.
12. Work Stoppage or Early Termination.
Notwithstanding anything to the contrary contained herein, Client shall
have the right at any time to direct Consultant to cease work or abandon its
efforts on Client's behalf, and to refrain from commencing any new work or
providing any further Consulting Services hereunder.
13. Non-Exclusive Services.
Client acknowledges that Consultant is currently providing services of
the same or similar nature to other parties and Client agrees that Consultant is
not prevented or barred from rendering services of the same nature or a similar
nature to any other individual or entity so long as this does not constitute a
usurpation of a corporate opportunity or an undisclosed conflict of interest.
Consultant understands and agrees that Client shall not be prevented or barred
from retaining other persons or entities to provide services of the same or
similar nature as those provided by Consultant. Consultant will advise Client of
its position with respect to any activity, employment, business arrangement or
potential conflict of interest which may be relevant to this Agreement.
14. All Prior Agreements Terminated.
This Agreement constitutes the entire understanding of the parties with
respect to the engagement of Consultant, and all prior agreements and
understandings with respect thereto are hereby terminated and shall be of no
force effect.
15. Representations and Warranties of Client.
Client hereby represents and warrants to Consultant that:
A. Corporate Existence. Client is a corporation duly
organized, validly existing, and in good standing under the
laws of the State of Nevada, with corporate power to own
property and carry on its business as it is now being
conducted.
B. Financial Statements. Client has or will cause to be
delivered concurrent with the execution of this Agreement,
copies of its Disclosure Documents (as defined below) which
accurately set forth the financial condition of Client as of
the respective dates of such documents.
C. No Conflict. This Agreement has been duly executed by
Client and the execution and performance of this Agreement
will not violate, or result in a breach of, or constitute a
default in any agreement, instrument, judgment, decree or
order to which Client is a party or to which Client is
subject, nor will such execution and performance constitute a
violation or conflict of any fiduciary duty to which Client is
subject.
16. Representations and Warranties of Consultant.
Consultant hereby represents and warrant to Client that:
A. Prior Experience. Consultant has experience in the areas of
the consulting services to be performed hereunder.
B. Information. No representation or warranty contained
herein, nor any statement in any document, certificate or
schedule furnished, or to be furnish pursuant to this
Agreement by Consultant, or in connection with the transaction
contemplated hereby, contains or contained any untrue
statement of material fact to the best of Consultants
knowledge and belief.
C. Inside Information - Securities Laws Violations. In the
course of the performance of his duties, Consultant may become
aware of information which may be considered "inside
information" within the meaning of the Federal Securities
Laws, Rules and Regulations. Consultant acknowledges that its
use of such information to purchase or sell securities of
Client, its subsidiaries or affiliates, or other parties with
whom Client is transacting business, or to transmit such
information to any other party with a view to buying, selling
or otherwise dealing in Client's securities is prohibited by
law and would constitute a breach of this Agreement and,
notwithstanding the provisions of this Agreement, will result
in the immediate termination of the Agreement. Consultant
agrees that if any violation occurs in regard to this section,
it shall indemnify Client for any charges or claims made
against Client as a result of said breach by Consultant.
D. Agreement does not contemplate corrupt practice, domestic
or foreign. All payments under this Agreement constitute
compensation for services performed under this Agreement, and
all payments, and the use of said payments by Consultant, do
not and shall not, constitute an offer, payment or promise, or
authorization of payment of any money or gift to an official
or political party of, or candidate for political office in
any jurisdiction within or outside the United States. These
payments may not be used to influence any act or decision of
an official, party or candidate to use his/her/its influence
with a government to assist Client in obtaining, retaining, or
directing business to Client or any person or other corporate
entity. As used in this paragraph, the term "official" means
any officer or employee of a government, or any person acting
in an official capacity for or on behalf of any government;
the term "government" includes any department, agency, or
instrumentality of a government.
E. Reliance upon Representations. The information provided
pursuant to this Agreement may be relied upon by Client as
true and correct as of the date of delivery of any shares
received by Consultant as payment for services hereunder.
Further, Consultant additionally represents that it
understands that:
(i) the information contained herein will be relied upon
for the purposes of Client entering into this Agreement;
and
(ii) that the shares of Canton's Common Stock received by
Consultant as payment for services hereunder, will not be
registered or free trading shares. In this regard,
Consultant represents and warrants that:
(a) Consultant will not sell, transfer or otherwise
dispose of the Canton's Common Stock shares without the
prior written consent of the Company, and only in
compliance with applicable Federal and state securities
acts, rules and regulations; and
(b) Consultant is fully aware of the applicable
limitations on the resale of the Shares being acquired
by Consultant; and
(c) by reason of Consultant's knowledge and experience
with financial, securities and business matters in
general, and investments in particular, Consultant is
capable of evaluating the merits and risks of this
Agreement, and in bearing the economic risks of an
investment in the shares obtained herein, as well as
the economic risk involved in the company in general,
and fully understands the speculative nature of such
securities and the possibility of such loss; and
(d) the present financial condition of Consultant is
such that Consultant is not under any present or
contemplated future need to dispose of any portion the
Shares to satisfy an existing or contemplated
undertaking, need or indebtedness; and
(e) any and all certificates representing the shares,
prior to registration of such shares, and any and all
securities issued in replacement thereof or in exchange
therefore, shall bear the following legend, if issued
prior to the effectiveness of a Registration Statement,
which Consultant has read and understands:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is
defined in Rule 144 of the Act. The shares may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective Registration Statement under
the Act or pursuant to an exemption from registration
under the Act, the availability of which is to be
established to the satisfaction of the Company."
G. Subsequent Events. Consultant will notify Client if,
subsequent to the date hereof, either party incurs obligations
which could compromise its efforts and obligations under this
Agreement.
H. Disclosure of Affiliation with Subsidiaries and/or
Affiliates of Client. Consultant has heretofore disclosed that
it is associated with, affiliated with, or has a 5% or greater
ownership interest in several of the Client's subsidiaries,
affiliates, and or other organizations with which Client
conducts business transactions, or in which Client has an
interest.
17. Consultant is Not an Agent or Employee.
Consultant's obligations under this Agreement consist solely of the
Consulting Services described herein. In no event shall Consultant be considered
to be acting as the employee or agent of Client or otherwise represent or bind
Client. For the purposes of this Agreement, Consultant is an independent
contractor, and in such capacity is responsible for all workmen's compensation
coverage for its employees, all withholding taxes, and federal and state taxes.
All final decisions with respect to the acts of Client, whether or not made
pursuant to, or in reliance on, information or advice furnished by Consultant
hereunder, shall be those of Client and Consultant shall under no circumstances
be liable for any expense incurred or loss suffered by Client as a consequence
of such action or decisions.
18. Miscellaneous.
A. Authority. The execution and performance of this Agreement
have been duty authorized by all requisite corporate action.
This Agreement constitutes a valid and binding obligation of
the parties hereto.
B. Amendment. This Agreement may be amended or modified at any
time, and in any manner, but only by an instrument in writing
executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under
this Agreement are cumulative and not exclusive of any other
rights and remedies provided bylaw. No delay or failure on the
part of either party in the exercise of any right or remedy
arising from a breach of this Agreement shall operate as a
waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party,
where required hereunder, to any act or occurrence, shall not
be deemed to be a consent to any other act or occurrence.
D. Assignment:
(i) Neither this Agreement nor any right created by it
shall be assignable by either party;
(ii) Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties
and their successors, any rights or remedies under this
Agreement.
E. 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 Unites
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, provided that the communication is addressed:
(i) In the case of Consultant to:
A-Z Professional Consultants, Inc.
Xxxxxxx Xxxxxx
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) In the case of Client, to:
The Canton Industrial Corporation, Inc.
Xxxxxx X. Xxxxxxxxxxx
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other person or address designated by Client or
Consultant to receive notice.
F. Headings and Captions. The headings of paragraphs are
included solely for convenience. If a conflict exists between
any heading and the text of this Agreement, the text shall
control.
G. Entire Agreement. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties
with respect to the transaction contemplated by the Agreement.
It may be executed in any number of counterparts but the
aggregate of the counterparts together constitute only one and
the same instrument.
H. Effect of Partial Invalidity. In the event that any one or
more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but
this Agreement shall be constructed as if it never contained
any such invalid, illegal or unenforceable provisions, unless
such determination renders the Agreement void by reason of
impossibility of performance.
I. Controlling Law. The validity, interpretation, and
performance of this Agreement shall be controlled by and
construed under the laws of the State of Utah, the state in
which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity,
including an action for declaratory relief, is brought to
enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover actual
attorney's fee from the other party. The attorney's fees may
be ordered by the court in the trial of any action described
in this paragraph or may be enforced in a separate action
brought for determining attorney's fees.
K. Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with
each other to achieve the purpose of this Agreement, and shall
execute such other and further documents and take such other
and further actions as may be necessary or convenient to
effect the transactions described herein.
M. Further Actions. At and 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.
N. No Third Party Beneficiary. Nothing in this Agreement,
expressed or implied, is intended to confer upon any person,
other than the parties hereto and their successors, any rights
or remedies under or by reason of this Agreement, unless this
Agreement specifically states such intent.
O. Facsimile Counterparts. If a party signs this Agreement and
transmits an electronic facsimile of the signature page to the
other party, the party who receives the transmission may rely
upon the electronic facsimile a signed original of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the 5th
day of December, NUNC PRO TUNC, August 30, 1995.
A-Z Professional Consultants, Inc. The Canton Industrial Corporation
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx Xxxxxx, President Xxxxxx X. Xxxxxxxxxxx, President
