Exhibit 4.1
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into
this 1st day of October, 2001, by and between American Fire Retardant Corp., a
Nevada corporation ("AFRC"), whose principal place of business is 0000 Xxxx
Xxxxxx, Xx Xxxxx, XX 00000 and Xxxxxxx Xxxxxx, Esq., of the Law Office of
Xxxxxxx Xxxxxx, P.C. (the "Consultant").
RECITALS
WHEREAS, Consultant is willing and capable of providing on a "best
efforts" basis various mergers and acquisition, feasibility, fairness opinions,
legal services and management services for and on behalf of AFRC in connection
with AFRC's mergers and acquisition projects and in connection with AFRC's
compliance with state and Federal securities laws and regulations; and
WHEREAS, AFRC desires to retain the Consultant as an independent
Consultant to provide the above-described consulting services, and the
Consultant desires to be retained in that capacity upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Consulting Services. AFRC hereby retains the Consultant as an independent
Consultant to AFRC and the Consultant hereby accepts and agrees to such
retention. The Consultant shall render to AFRC such services of an advisory
or consultative nature in order to assist AFRC in the analysis of proposed
divestiture/sales or acquisitions that may benefit AFRC in the fire
retardant industry; rendering of legal advice and services in the
structuring of divestitures and acquisitions; and in order to permit AFRC
to comply with all state and Federal securities laws and regulations.
Time,Place and Manner of Performance. The Consultant shall be available for
advice and counsel to the officers and directors of AFRC at such reasonable
and convenient times and places as may be mutually agreed upon. Except as
aforesaid, the time, place and manner of performance of the services
hereunder, including the amount of time to be allocated by the Consultant
to any specific service, shall be determined in the sole discretion of the
Consultant.
Term of Agreement. The term of this Agreement shall be for 12 months, commencing
October 1, 2001 and terminating on September30, 2002, unless terminated
pursuant to Section 7 of this Agreement or unless amended in writing and
signed by the parties hereto.
Compensation. In consideration of the services to be provided for AFRC by the
Consultant, AFRC hereby agrees to the following deliverable schedule for
compensation:
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Mergers and Acquisitions Project Consulting Upon receipt of the consulting
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services and acceptance of the work product as final and complete by AFRC,
then AFRC agrees to issue and deliver 7,500,000 shares of common stock as
compensation in full for the work product. At the sole discretion of the
AFRC Board of Directors, AFRC may provide the shares of common stock at
any time prior to receipt of the deliverables, based upon progress
reports, and/or within thirty (30) days of receipt, acceptance and
approval by AFRC of the final deliverables. AFRC agrees as soon as
reasonably practicable to register the Shares for resale under the
Securities Act of 1933, as amended, pursuant to a registration statement
filed with the Securities and Exchange Commission on Form (S-8) (or, if
Form S-8 is not then available, such other form of registration statement
then available).
Confidentiality. The Consultant covenants that all information concerning AFRC,
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including proprietary information, which he obtains as a result of the
services rendered pursuant to this Agreement shall be kept confidential and
shall not be used by the Consultant except for the direct benefit of AFRC,
nor shall the confidential information be disclosed by the Consultant to
any third party without prior written consent of AFRC, provided, however,
that the Consultant shall not be obligated to treat as confidential, or
return to AFRC copies of confidential information that (i) was publicly
known at the time of disclosure to the Consultant; (ii) becomes publicly
known or available thereafter other than by any means in violation of this
Agreement or any other duty owed to AFRC by the Consultant, or; (iii) is
lawfully disclosed to the Consultant by a third party or is required by any
entity or court of competent jurisdiction or lawful request of any
regulatory body or agency.
Independent Contractor. The Consultant and AFRC hereby acknowledge that the
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Consultant is an independent contractor. The Consultant agrees not to hold
himself out as, nor shall take any action from which others might
reasonably infer that the Consultant is a partner or agent or a joint
venturer with AFRC. In addition, the Consultant shall take no action that,
to the knowledge of the Consultant binds, or purports to bind, AFRC to any
contract or agreement.
Expenses. Typical expenses expected to be incurred by the Consultant are covered
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by Consultant. For other extraordinary expenses beyond minor daily
operating expenses to perform services under this Agreement, AFRC shall
reimburse the Consultant on demand, net 30 days, for all expenses and other
disbursements, provided these expenses and disbursements shall have AFRC's
prior written approval and be verifiable with receipts and documentation as
may be required under GAAP for accounting purposes of AFRC. All expense
invoices pre-approved and received by AFRC will be addressed on a net 30
day basis.
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Termination. Notwithstanding any provision contained in this Agreement on the
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contrary, this Agreement may be terminated by AFRC at any time, for any
reason, with or without cause, at the sole discretion of AFRC, with 30 days
written notice to Consultant. Upon termination of this Agreement prior to
the end of its anticipated expiration on September 30, 2002, with or
without cause, AFRC has no requirement for payment of compensation or
expenses of any kind, explicit or implicit, and AFRC assumes no liabilities
either express or implied as a result of any terms of this Agreement. Until
receipt of Consultant's deliverables by AFRC and the acceptance by AFRC of
the adequacy and completeness of these deliverables in the sole discretion
of AFRC, there is no creation of liabilities either express or implied
under this Agreement; except that, at the sole discretion of AFRC, it may
provide portions of compensation for work product received and accepted,
and for project progress, as optional and voluntary interim compensation to
Consultant by AFRC, up to the full amount to be paid. AFRC may also, at any
time, terminate this Agreement for cause. For purposes of this Agreement
the term "cause" means a termination of this Agreement during the term
which is a result of (i) the Consultant's felony conviction or plea of "no
contest" to a felony; (ii) the Consultant's willful disclosure of material
trade secrets or other material confidential information related to
Consultant's business; or (iii) the Consultant's willful and continued
failure to substantially perform his duties for AFRC after a written demand
for substantial performance is delivered by AFRC to the Consultant, which
demand specifically identifies the manner in which AFRC believes that the
Consultant has not substantially performed his duties, and which
performance is not substantially corrected by the Consultant within 10 days
of delivery of such demand. For purposes of the previous sentence, no act
or failure to act on the Consultant's part shall be deemed "willful" unless
done, or omitted to be done, by the Consultant not in good faith and
without reasonable belief that the Consultant's action or omission was in
the best interest of AFRC.
Work Product. It is agreed that the Consultant retains all property rights with
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respect to the deliverables until payment in full for all work product is
received by the Consultant from AFRC and AFRC has given final quality
assurance approval to the work product and deliverables.
Conflict of Interest. The Consultant shall be free to perform services for other
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persons. The Consultant will notify AFRC of his performance of consulting
services for any other person which could conflict with his obligations
under this Agreement. Upon receiving such notice, AFRC may terminate this
Agreement or may in writing waive the conflict concerns and continue with
this Agreement at the sole discretion of AFRC.
Indemnification for Securities Law Violations. AFRC and the Consultant agree to
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mutually indemnify and hold each other and each officer, director and
controlling person of AFRC or the Consultant harmless against any losses,
claims, damages, liabilities and/or expenses (including any legal or other
expenses reasonably incurred in investigating or defending any action or
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claim in respect thereof) to which the Consultant or AFRC or such officer,
director or controlling person may become subject under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
because of inappropriate actions of the Consultant or AFRC or their
agent(s). AFRC and the Consultant will comply with all of the applicable
laws of the Securities Act of 1933.
Notices. Any notices required or permitted to be given under this Agreement
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shall be sufficient if in writing and delivered or sent by registered or
certified mail to the principal office of each party.
Waiver of Breach. Any waiver by AFRC of a breach of any provision of this
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Agreement by the Consultant shall not operate or be construed as a waiver
of any subsequent breach by the Consultant. Any waiver by Consultant of a
breach of any provision of this Agreement by AFRC shall not operate or be
construed as a waiver of any subsequent breach by AFRC.
Assignment. This Agreement and the rights and obligations of the parties
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hereunder shall not be assignable, unless written authorization to assign
the Agreement, rights and obligations hereunder is obtained from the other
non-assigning Party.
Severability. All agreements and covenants contained herein are severable, and
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in the event any of them shall be held to be invalid by any competent
court, the Agreement shall be interpreted as if such invalid agreements or
covenants were not contained herein.
Entire Agreement. This Agreement contains the entire agreement between the
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Parties, and may not be waived, amended, modified or supplemented except by
agreement in writing signed by the Party against whom enforcement of any
waiver, amendment, modification or supplement is sought. Waiver of or
failure to exercise any rights provided by this Agreement in any respect
shall not be deemed a waiver of any further or future rights.
Waiver and Modification. Any waiver, alteration or modification of any of the
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provisions of this Agreement shall be valid only if made in writing and
signed by the parties hereto. Each party hereto, from time to time, may
waive any of its rights hereunder without effecting a waiver with respect
to any subsequent occurrences or transactions hereof.
Counterparts. This Agreement may be executed in counterparts, each of which
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shall be deemed an original but both of which taken together shall
constitute but one and the same document.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
CONSULTANT
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Xxxxxxx Xxxxxx, Esq.
AMERICAN FIRE RETARDANT CORP
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Xxxxxx X. Xxxxx Chairman/President
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