Exhibit 4.1(b)
LEGAL SERVICES
AND
CONSULTING AGREEMENT
This Legal Services and Consulting Agreement (the "Consulting Agreement" or
"Agreement") is made as of this October 15, 2002 by and between Xxxx X.
Xxxxxxxxx (hereinafter referred to as "Consultant"), an individual, having his
principle mailing address at 00000 Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
00000 and Aquatic Cellulose Corporation (hereinafter referred to as the
"Company" or "AQCI") with offices at 0000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, X.X.
VIT 5N6.
WITNESSETH
WHEREAS, the Company desires to retain the services of Consultant relating
specifically to strategic planning and business development, management and
operational efficiency and other advisement related to handling various legal
matters on behalf of the Company; and
WHEREAS, Consultant is qualified and willing to provide the Company with the
aforementioned services; and
WHEREAS, the Company wishes to induce Consultant to provide these consulting
services to the Company; and
NOW, THEREFORE, in consideration of the mutual covenants hereinafter stated, it
is agreed as follows:
1. APPOINTMENT.
-----------
The Company hereby engages Consultant and Consultant agrees to render
services to the Company as a consultant upon the terms and conditions
hereinafter set forth.
2. TERM.
----
The term of this Consulting Agreement began as of the date of this
Agreement, and shall terminate 270 days hence, unless terminated or extended in
accordance with a valid provision contained herein, or unless extended by a
subsequent agreement between the parties.
3. SERVICES.
--------
a. The Company is desirous of the Consultant to specifically
engage in advisement with respect to the identification, evaluation,
structuring, negotiating and closing of mergers and acquisitions and advice with
regard to the ongoing managing and operating of such acquisitions upon
consummation thereof. Although the Consultant has offered to work on such
efforts for compensation based upon his success with respect to said efforts,
the Company believed it was in it's best interest to retain the services of the
Consultant for a specific term.
b. Additionally, during the term of this Agreement, Consultant shall
provide advice, undertake, and consult with the Company concerning strategic
planning, corporate organization and structure, and assistance in various legal
endeavors, including reorganizing the Company, providing legal assistance and
advisement with respect to spinning-off certain Company assets and engaging in
efforts to file and make effective certain proxy documents and registration
statements related to the Company and future related entities.
4. DUTIES OF THE COMPANY.
------------------------
The Company shall provide Consultant, on a regular and timely basis, with all
approved data and information about it, its subsidiaries, its management, its
products and services and its operations as shall be reasonably requested by
Consultant, and shall advise Consultant of any facts which would affect the
accuracy of any data and information previously supplied pursuant to this
paragraph. The Company shall promptly supply Consultant with full and complete
copies of all financial reports, all filings with all federal and state
securities agencies; with all data and information supplied by any financial
analyst, and with all brochures or other sales materials relating to its
products or services.
5. COMPENSATION.
------------
Upon the execution of this Agreement, Company agrees to pay Consultant the
following as consideration for the services rendered under this Agreement:
a. Stock. 3,000,000 shares of AQCI common stock.
b. Stock Warrant. Consultant shall have the right to purchase a total of
686,813 shares of AQCI common stock (in accordance with the terms set forth
below), at 50% of the average of the fifteen (15) prior closing prices as of the
following dates:
Tranche 1: 228,938 shares on November 15, 2002;
Tranche 2: 228,938 shares on December 15, 2002;
Tranche 3: 228,937 shares on January 15, 2003.
c. The Compensation outlined in Section 5 shall be conveyed through an
effective S-8 registration of common shares. Company agrees to exercise it's
Best Efforts to provide Consultant, it's agent or any other party charged to
file the subject S-8 Registration Statement with any and all information,
documentation and related assistance required to make the S-8 Registration
Statement effective. Within 3 days of the effectiveness of the above-referenced
S-8 Registration Statement, the Company shall execute a written request to its
transfer agent to prepare and deliver to Consultant, or it's agent, any and all
compensation related to this Agreement.
5.5 COSTS AND EXPENSES
--------------------
a. Miscellaneous Costs.
--------------------
Subject to the prior approval of the Company, Consultant in providing the
foregoing services, shall not be responsible for any out-of-pocket costs,
including, without limitation, travel, lodging, telephone, postage and Federal
Express charges. Consultant shall provide the Company with a detailed accounting
of monthly expenses related to the Agreement. Payment for these expenses shall
be made to Consultant within 15 days after submission to the Company.
6. REPRESENTATION AND INDEMNIFICATION.
------------------------------------
a. Company. Company agrees to indemnify, defend, and shall hold
harmless Consultant and/or his agents, and shall defend any action brought
against said parties with respect to any claim, demand, cause of action, debt or
liability, including reasonable attorneys' fees to the extent that such action
is based upon a claim that: (i) reasonably relates to the services to be
rendered hereunder, (ii) would constitute a breach of any of Company
representation, warranty, or agreement hereunder, or (iii) arises out of the
negligence or willful misconduct of Company.
b. Consultant. Consultant agrees to indemnify, defend, and shall hold
harmless Company, its directors, employees and agents, and defend any action
brought against same with respect to any claim, demand, cause of action, or
liability, including reasonable attorneys' fees, to the extent that such an
action arises out of the gross negligence or willful misconduct of Consultant.
c. Notice. In claiming indemnification hereunder, the indemnified party shall
promptly provide the indemnifying party with written notice of any claim, which
the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its expense, assist in the defense if
it so chooses, provided that the indemnifying party shall control such defense,
and all negotiations relative to the settlement of any such claim. Any
settlement intended to bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be unreasonably withheld.
6.5 COMPLIANCE WITH SECURITIES LAWS.
----------------------------------
The Company understands that any and all compensation outlined in Section 5
shall be paid solely and exclusively as consideration for the aforementioned
consulting efforts made by Consultant on behalf of the Company as an independent
contractor. Any monies transferred to Company by Consultant to pay for the
exercise of stock options herein is not made with the intent to raise capital or
to provide the Company with capital. Consultant has been engaged to provide the
Company with traditional legal and business management and financial consulting,
and related business services. Consultant's engagement does not involve the
promotion or marketing of the Company's securities, nor does it involve raising
money for the Company.
7. MISCELLANEOUS.
-------------
a. Termination: Subsequent to and no less than 30 days after the
execution of this Agreement, this Agreement may be terminated by either Party
upon written notice to the other Party for any reason and shall be effective
five (5) business days from the date of such notice.
b. Modification: This Consulting Agreement sets forth the entire
understanding of the Parties with respect to the subject matter hereof. This
Consulting Agreement may be amended only in writing signed by both Parties.
c. Notices: Any notice required or permitted to be given hereunder
shall be in writing and shall be mailed or otherwise delivered in person or by
facsimile transmission at the address of such Party set forth above or to such
other address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
d. Waiver: Any waiver by either Party of a breach of any provision
of this Consulting Agreement shall not operate as or be construed to be a waiver
of any other breach of that provision or of any breach of any other provision of
this Consulting Agreement. The failure of a Party to insist upon strict
adherence to any term of this Consulting Agreement on one or more occasions will
not be considered a waiver or deprive that Party of the right thereafter to
insist upon adherence to that term of any other term of this Consulting
Agreement.
e. Assignment: The Options under this Agreement are assignable at
the discretion of the Consultant.
f. Severability: If any provision of this Consulting Agreement is
invalid, illegal, or unenforceable, the balance of this Consulting Agreement
shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
g. Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which may be executed by less
than all of the parties to this Agreement, each of which shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one and the same agreement. The parties shall be
entitled to rely upon and enforce a facsimile of any authorized signature as if
it were the original.
h. Disagreements: Any dispute or other disagreement arising from or
out of this Consulting Agreement shall be submitted to arbitration under the
rules of the American Arbitration Association and the decision of the arbiter(s)
shall be enforceable in any court having jurisdiction thereof. Arbitration shall
occur only in San Diego, CA. The interpretation and the enforcement of this
Agreement shall be governed by California Law as applied to residents of the
State of California relating to contracts executed in and to be performed solely
within the State of California. In the event any dispute is arbitrated, the
prevailing Party (as determined by the arbiter(s)) shall be entitled to recover
that Party's reasonable attorney's fees incurred (as determined by the
arbiter(s)).
i. Execution of Agreement. Company has the requisite corporate
power and authority to enter into and carry out the terms and conditions of this
Agreement, as well as all transactions contemplated hereunder. All corporate
proceedings have been taken and all corporate authorizations and approvals have
been secured which are necessary to authorize the execution, delivery and
performance by Company of this Agreement. This Agreement has been duly and
validly executed and delivered by Company and constitutes the valid and binding
obligations of Company, enforceable in accordance with the respective terms.
j. Effect of Agreement. The consummation by Company of the
transactions herein contemplated, including the execution, delivery and
consummation of this Agreement, will comply with all applicable law and will not
conflict with or result in a breach of any of the unwaived terms of any
agreement or instrument to which Company is bound, or constitute a default
thereunder.
k. Consummation. Upon the execution and delivery of this
Agreement, Company will have all requisite power to enter into this Agreement
and to consummate the transactions contemplated hereunder. Thereafter, this
Agreement, and the other agreements referred to herein, will constitute the
valid and binding obligations of Company, and will be enforceable in accordance
with their respective terms.
SIGNATURE PAGE
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
CONSULTANT
/s/ Xxxx Ackles_____________ /s/Xxxx X. Naccarato______________
------------------------------ ----------------------------------------
Xxxx Xxxxxx Xxxx X. Xxxxxxxxx
CEO
