CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
on October 10, 2002, by and between, EnerTeck Chemical Corporation, a Texas
corporation (the "Company") on the one hand, and Xxxxx X. Xxx & Associates,
Inc., also a Texas corporation (the "Consultant") on the other hand. This
agreement supercedes any agreements executed by the parties regarding services
provided by the Consultant to the Company made on this date or prior thereto.
In consideration of the mutual representations, warranties, covenants
and promises contained herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Consulting Services. For a period of one (1) year from the date
hereof, at such times as reasonably requested by the Company, Consultant shall
make himself available by telephone or in person to advise and consult with the
Company regarding the following: providing advice regarding the recruitment
and/or utilization of board members, advisors, consultants, and key executives
consistent with the business objectives of the Company, providing advice
regarding business and marketing strategies, providing advice in the area of
human resources, including in connection with the creation and implementation of
employee policies and employee policy manuals, employee benefit programs,
affirmative action policies, compensation policies, job descriptions;
coordinating and implementing marketing strategies. Furthermore, Consultant will
be available upon the request of the Board of Directors to obtain the services
of, negotiate with, act as a laison to and coordinate the activities of the
various professionals needed to assist the Company in effecting its business
plan.
2. Compensation. As consideration for the Consultant hereby agreeing
and representing to be available and for being available to provide the services
described hereunder to the Company, the Company shall compensate Consultant with
payment of a $50,000 retainer fee payable in three (3) installments. The initial
payment of $10,000 is due at the time of execution of this Agreement. The second
payment of $10,000 will be due November 1, 2002, with the balance of $30,000 due
and payable on March 1, 2003.
In addition to the foregoing Fees, Company agrees to reimburse Consultant for
reasonable out-of-pocket expenses incurred by Consultant in performing
Consulting Services in Paragraph 1., above. All expenses and any charges for
Professional Services must be pre-approved by Company.
Finally, the Consultant will be issued five year warrants to purchase up to a
seven and one-half percent equity interest in the Company as of this date for a
total purchase price of up to $600,000 (the "Warrant Formula").
In the event that the Company, during the term of this agreement, becomes an
entity whose common stock becomes publicly traded, and/or merges with, acquires,
is acquired by, becomes an affiliate of, or forms any other business combination
with a publicly traded corporation (in any case, the "Public Entity"), the
Consultant will be issued warrants in the Public Entity based
upon the Warrant Formula as applied to the capital structure of the Public
Entity. The shares underlying the warrants issued by the Public Entity shall
have registration rights attached to them. The exact warrant exercise price and
the number of warrants to be issued by the Public Entity to the Consultant will
be determined by mutual agreement subsequent to the event that results in the
Public Entity. This mutual agreement shall be made into an amendment to this
agreement signed by the Consultant, the Company and the Public Entity and
attached to and made a part of hereof. The warrants are hereby deemed to have
been earned upon the execution of this Consulting Agreement.
The Company agrees that it will make its obligations hereunder a condition of
any transaction it effects with a publicly traded company during the term of
this agreement.
3. Independent Contractor. Consultant shall, at all times, render
services pursuant to this Agreement as an independent contractor and not as an
employee, agent or servant of the Company, nor shall Consultant, by reason of
this Agreement or the services performed pursuant hereto, be deemed an employee
of Company for purposes of withholding employee payroll taxes, contributions,
pensions or otherwise.
4. Representations and Warranties. Consultant represents and warrants
that:
(a) the services contemplated, rendered and for which he is compensated
hereunder shall at no time include services for:
(i) acting as a broker, dealer or person who finds
investors for the Company;
(ii) providing consulting services involving investor
relations or shareholder communications;
(iii) Arranging or effecting mergers that take a
private entity public;
(iv) identifying or assisting in identifying
acquisition targets which identification results in
the taking of a private company public;
(v) structuring or assisting in structuring mergers
or other acquisitions that take a private company
public;
(vi) rendering services that directly or indirectly
promote or maintain a market for securities;
(vii) arranging financing that involves any
securities issuance, whether equity or debt;
(viii) providing services that are primarily
capital-raising or promotional in nature;
(ix) auditing the Company's financial statements;
(x) preparing or circulating a report or proxy
statement required by the Securities Exchange Act of
1934, as amended, that is part of a promotional
scheme that violates federal securities laws;
(xi) serving as counsel to the Company, its
underwriters or any participating broker-dealer in a
securities offering where the Company is the issuer;
or
(xii) controlling or directing the resale of the
Company Common Stock received hereunder in the public
market or directly or indirectly receiving a
percentage of the proceeds from such resales.
(b) Consultant has not, at any time in his history, been subject to any
of the events enumerated in paragraphs (f)(1) through (f)(6) of Item 401 of
Regulation S-K under the Securities Act of 1933, the Securities Exchange Act of
1934, and the Energy Policy and Conservation Act of 1975.
5. Termination.
(a) In the event that either party materially or repeatedly defaults in
the performance of any of their respective duties or obligations under this
Agreement, and within thirty (30) days after written notice is given to the
defaulting party specifying the default, and (i) such default is not
substantially cured, or (ii) the defaulting party does not obtain the approval
of the other party to a plan to remedy the default, then the party not in
default may terminate this Agreement by giving written notice to the defaulting
party.
(b) If either party becomes or is declared insolvent or bankrupt, is
the subject of any proceedings relating to its liquidation, insolvency or for
the appointment of a receiver or similar officer for it, makes a general
assignment for the benefit of all or substantially all of its creditors, or
enters into an agreement for the composition, extension or readjustment of all
or substantially all of its obligations, or breaches any warranty or
representation contained herein, then the other party, within the conditions of
applicable law, may immediately terminate this Agreement by giving written
notice.
6. Miscellaneous.
(a) Assignment. Consultant may not assign any of his rights or
obligations hereunder, without the Company's prior written consent, which the
Company may withhold in its sole and absolute discretion.
(b) Notice. All notices, demands or other communications to be given to
any party hereunder shall be in writing. A notice shall be validly given or made
to another party if served either personally or if deposited in the United
States mail, certified or registered, return receipt requested, or if
transmitted by telegraph, telecopy or other electronic written transmission or
if sent by overnight courier service, at the address of the applicable party. If
such notice, demand or other communication is served personally, service shall
be conclusively deemed made at the time of such personal service. If such
notice, demand or other communication is given by mail, service shall be
conclusively deemed made seventy-two (72) hours after the deposit thereof in the
United States mail. If such notice, demand or other communication is given by
overnight courier, or electronic transmission, service shall be conclusively
deemed made at the time of confirmation of delivery thereof. Any party may
change its address for the purpose of receiving notices, demands and other
communications as herein provided, by a written notice given in the aforesaid
manner.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to conflicts of
law principles.
(d) Entire Agreement. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
(e) Waivers. No waiver of compliance with any provision of this
Agreement shall be binding unless executed in writing by the party making the
waiver. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver.
(f) Amendments. Any amendment to this Agreement shall be in writing and
signed by the parties hereto.
(g) 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, then to the maximum extent permitted by
law, such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement.
(h) Titles. The titles, captions or headings of the Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
(i) Multiple Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
(j) Income Tax Consequences. Consultant acknowledges that the Company
has not advised Consultant regarding the tax implications of this Agreement.
Each of the parties hereto has obtained or will obtain his or its own tax advice
with respect to the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
THE COMPANY THE CONSULTANT
EnerTeck Chemical Corporation Xxxxx X. Xxx & Associates, Inc.
a Texas corporation a Texas corporation
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X'Xxxxx
Xxxxxx Xxxxx Xxxxxxx X'Xxxxx
Chief Executive Officer and President Sr. Vice President
