May 9, 1997
Xx. Xxxxxx Xxxxxxxxx
American Quantum Cycles, Inc.
000-000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Gentlemen:
This letter shall constitute the terms of the Consulting Agreement
among Greenstone Financial Corp., ("GFC"), a Florida corporation, and American
Quantum Cycles, Inc. ("AQC"), a Florida corporation. For ten dollars and other
good and valuable consideration it is agreed as follows:
1. Employment. GFC is retained by AQC to provide AQC with corporate
development consulting.
2. Services to be Performed by GFC. GFC shall act as a consultant to
AQC to provide the following:
Assist AQC in preparation of a Bridge Loan Document to
enable AQC to raise a maximum of $250,000. Receipt of
such funds by AQC has occurred.
Assist AQC in preparation of a Private Placement document,
under Regulation D, Rule 504, to enable AQC to raise
an additional $1,000,000. Prior to the Private
Placement all of the stock in AQC will be owned as
follows: 36% by Xxxxxx X. Xxxxx, 36% by Xxxxxx X.
X'Xxxxx and 28% by the public.
Assist AQC in negotiating with Investment Bankers to raise
an additional $4,000,000, which is anticipated not to
reduce the individual holdings of Cheal and O'Brien
below 26% each.
Preparation of a due-diligence package. Dissemination of AQC
information to investors. Preparation and dissemination of AQC
press releases. Presenting AQC to brokers, fund managers and
analysts.
Compensation. In consideration for the performance of the services by
GFC under this Agreement, GFC shall receive the following compensation:
A five year option to purchase 300,000 shares of AQC
common stock from treasury (the "Common Stock"),
exercisable upon completion of the secondary
offering, and receipt of the funds by AQC,at an
exercise price of $.10 per share.
AQC shall reimburse GFC, within 15 days of submission of
an invoice, for all out of pocket expenses
pre-approved in writing.
Registration Rights.
AQC agrees that it will, subject to the requirement that
the prior consent of the Secondary Underwriter be
obtained, as soon as reasonably practicable and at
the sole expense of AQC, register the shares of
Common Stock issuable upon the GFC Option under the
Securities Act of 1933 (the "Act") for resale by GFC.
Such securities shall be registered on a Form S-8
Registration Statement or, if such form is not
available, then upon another form which AQC is
eligible to use. AQC shall supply prospectuses
meeting the requirements of the Act and such other
documents as GFC may reasonably request for at least
one year following the effectiveness of such
registration in order to facilitate the public sale
or disposition of such securities, to register and
qualify any of such securities for sale in such
states as GFC designates and do any and all other
acts and things which may be necessary or desirable
to enable GFC to consummate the public sale or other
disposition of such securities.
GFC has knowledge and experience in financial and
business matters that each is capable of evaluating
the merits and risks of an investment in AQC. GFC is
familiar with the nature and risks inherent in
investments in unregistered securities and in the
business in which AQC engages and have determined
that an investment in AQC is consistent with its
investment objectives and income prospects. GFC
represents and warrants that it is an "accredited
investor" as defined in Rule 501(a) of Regulation D
promulgated under the Act. GFC is acquiring the
shares of Common Stock underlying the Option to be
issued, for its own account for investment purposes
only and not with a view toward resale or
distribution of such shares either in whole or in
part.
5. Term. This Agreement shall be effective for a period of twelve
months, commencing upon the date of execution of this Agreement, provided that
GFC continues to perform the services listed in Section 2.
6. Joint Relationship. Nothing contained in this Agreement shall be
construed to imply a joint venture or partnership or principle/agent
relationship between the parties hereto, and no party by this Agreement shall
have any right, power or authority to act or create any obligation, expressed or
implied, on behalf of the other party other than as set forth herein.
7. Confidential Information. The parties hereto recognize that a major
need of AQC is to preserve its trade secrets and confidential information. By
reason of this Agreement, GFC will have access to, and will obtain specialized
knowledge, trade secrets and confidential information about AQC's plans and
operations. Therefore, GFC hereby agrees that during and after the Term GFC will
not use) other than in performing services hereunder), disclose to others, or
publish any confidential business information about the affairs of AQC,
including but not limited to confidential information concerning AQC's products,
methods, analytical techniques, technical information, customer information,
employee information, and other confidential information acquired by it in the
course of its past or future services for AQC. GFC agrees to take reasonable and
appropriate steps to prevent the improper or inadvertent disclosure of any such
confidential information. GFC further acknowledges that it may from time to time
in the performance of services under this Agreement come into possession of
information that could be deemed to be material non-public information and that
the possession of such information may limit GFC's ability to sell shares
underlying its Option.
8. Entire Agreement. This Agreement represents the entire Agreement
between the parties and is not subject to alteration, modification or change
except in writing signed by each of the parties. In addition, this Agreement
when executed shall supersede any and all previous Agreements, whether written
or oral. A waiver of any term or condition of this Agreement shall not be
construed as a general waiver. The obligations of the parties under this
Agreement shall not be assignable or transferable.
9. Notices. Any notices with respect to this Agreement shall be sent
via registered mail, return receipt requested, to each of the parties at the
address designated at the top of page one.
10. Choice of Law. This Agreement shall be governed by and construed
under the laws of the State of Florida.
11. Disputes. The prevailing party in any dispute pursuant to this
Agreement shall be entitled to reasonable attorneys' fees and costs.
If the foregoing meets with your approval, please indicate by
counter-signing below.
Sincerely,
Greenstone Financial Corp.
By: _________________________
Xxxxxxx X. Xxxxx, Xx.
Managing Director
AGREED TO AND ACCEPTED:
American Quantum Cycles, Inc.
_____________________________ _______________
Xx. Xxxxxx Xxxxxxxxx Date
President
