Exhibit 10.12
---------------
Presidio Capital & Management Corp.
CONSULTING AGREEMENT
AGREEMENT made this 11th day of June, 1998, between Presidio Capital &
Management Corporation (hereinafter referred to as "PCMC"), having a principal
place of business located at 000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx
00000, and American Fire Retardant Corporation is a corporation organized and
existing under the laws of the state of Wyoming and American Fire Retardant
Corporation, a corporation organized under the laws of the state of Nevada, both
having a principal place of business located at 0000 Xxxx Xxx., Xx Xxxxx,
Xxxxxxxxxx 00000 (hereinafter referred to as "Client" or "AFRC").
WHEREAS, PCMC is engaged in the Merchant Banking Business, providing
intermediary services which include developing Business Plans, Merger
Opportunities, Acquisitions, as well as the identification of sources of
investment capital, equity and other funding and financing for individuals and
business clients; and
WHEREAS, Client desires to retain PCMC for the above purpose as well as
other consulting services; and
WHEREAS, the parties to wish to reduce their agreement to writing.
NOW THEREFORE, in consideration of their mutual promises made herein, and
for other good and valuable consideration, receipt of which is hereby
acknowledged by each party, the parties, intending to be legally bound, hereby
agree follows:
I. Recitals The parties agree that the foregoing recitals are true and
correct and are incorporated herein by this reference.
II. Engagement The client hereby agrees engages PCMC and PCMC hereby
accepts such engagement upon the terms and conditions set forth in this
Agreement.
A. Reasons for Engagement of PCMC: Due to the special skills,
knowledge, abilities, experiences, information, contacts, and other
expertise of PCMC, the Client had engaged the services of PCMC upon
the terms and conditions set forth in this Agreement.
Page 1
B. Duties: PCMC is engaged by Client to perform work and render
services in connection with the completing of a re-organization and
merger with AFRC the Nevada Corporation, the arrangement of a
shareholder meeting and proxy statements needed to re-issue new stock
to shareholders, re-capitalize the company and the filing of the
appropriate documents with the federal and state agencies as required
under the statutes to arrange the best efforts 504D Offering, in
addition, PCMC will use its best efforts to secure a Commitment Latter
from a licensed Broker Dealer referencing the equity placement
referred to in the Offerings. As contemplated, the Offerings will be
held in the form of a two step capital financing, as follows:
Step 1. 504D Private Placement (Regulation "D") in the amount of
$800,000.00
Step 2. SB-2 Initial Public Offering in the amount of $5,000,000.00
("IPO")
Included in the duties will be the structuring, writing, including all
legal work associated with the offering and filing the documents with
the necessary governmental agencies, state and federal necessary to
accomplish the funding as well as the identification for Client of a
potential source or sources of investment capital. This is more fully
explained in Exhibit A, "The Services Performed", which is attached
hereto and incorporated herein by this reference (hereinafter referred
to as the "Services").
Upon the conclusion of the IPO, the Client will make application for
listing on the NASDAQ Small Cap Stock Market.
The performance of PCMC, under the terms of this contract does not
include the securing or placement of Bridge Capital. Under certain
conditions and under an executed separate Letter Agreement, PCMC would
use its best efforts to provide such bridge capital.
C. Terms: Subject to the terms of this Agreement relating to
termination, this Agreement shall continue in full force and effect
for a term of 180 days from the date hereof, and may be renewed for
successive periods of sixty (60) days thereafter by the mutual written
agreement of the parties hereto made at least ten (10) days prior to
the expiration of such term.
Page 2
D. Fee Structure:
----------------
1. Time is of the Essence: Time is of the essence with respect to
the parties' respective obligations under this Agreement.
2. Amount of Fee: Client hereby agrees to pay PCMC the fee
described in Exhibit B, "Fee Structure". Which is attached hereto
and incorporated herein by this reference (hereinafter referred
to as the "Fee") with the exception of fees to be paid "at
closing", Client shall pay all fees according to the time table
set forth on Exhibit B.
3. Timing of Payment of Fee: Any and all fees due to PCMC under
this Agreement shall be paid as specified in the Fee Agreement
and shall be paid at the time specified in the Agreement. In the
event of Client's inability to pay all fees as specified, PCMC
retains the right to cancel this Agreement and retain all fees
previously paid as liquidated damages. Payment shall be made in
U.S. Dollars except where payment is made in such other form as
may be previously agreed to in writing by PCMC.
4. For the purposes of this Agreement, the term "closing" shall
refer to the date upon which the Client receives, or becomes
legally entitled to receive, the Financing.
F. Independent Contractors in all matters relating to this Agreement
and otherwise, the parties hereto shall be and act as independent
contractors, neither shall be the employer or agent of the other, and
each shall assume any and all liabilities for its own acts. As a
result of its independent contractor status, PCMC shall be responsible
for any and all income taxes of federal and/or state authorities, FICA
contributions, and any and all other employment related taxes or
assessments which may be required of PCMC, under any federal or state
statute, regulation or administrative ruling. Neither party shall have
any authority to create any obligations, express or implies on behalf
of the other party and neither party shall have any authority to
represent the other party as an employee or in any capacity other than
as herein provided.
III. Non-Circumvention Requirement: Client agrees that it will not,
directly or indirectly, interfere with, circumvent or attempt to circumvent,
avoid, bypass, violate or obviate PCMC's interest in the Financing, or the
interest or relationship between PCMC and potential sources of the Financing
identified to the Client by PCMC, or producers, sellers, buyers, brokers,
dealers, consultants, financial institutions, technology owners, or
Page 3
manufacturers, to change increase or avoid, directly or indirectly, in whole or
in part, payment of established or to be established business relationships with
manufacturers or technology owners, with intermediaries, entrepreneurs, legal
counsel, or initiate buying and selling relationships, or transactional
relationships that bypass PCMC with any corporation, producer, technology owner,
partnership, consultants, individuals or other parties revealed or introduced by
PCMC to Client in connection with the Financing or any other ongoing or future
transaction or project of like nature. In other words, not only does Client
agree not to circumvent PCMC with the respect to the Financing which is the
subject of this Agreement, but Client also agrees that it will not in the future
seek any additional or other financing or funding from any source identified for
Client by PCMC without engaging PCMC as consultant to provide intermediary
services with respect to the identification of said source or sources of said
future financing or funding and paying PCMC its regular and customary fee for
doing so.
IV. Nondisclosure/Confidentiality Requirement: Client agrees that it will
not at any time, whether during the term of this Agreement or thereafter, use or
disclose or otherwise reveal, directly or indirectly, to any third party, any
confidential information provided by PCMC to Client, particularly including, but
not limited to, any contract terms, product information, or manufacturing method
or process, design process, trade secret, prices, fees, financing arrangements,
schedules and other information concerning the identity of a potential source or
sources of the Financing, or any confidential record, data or information of
PCMC; or any customer lists, contracts or other information; or identity of any
supplier, sources or customers of any other contacts; or any business
opportunities for now or developing business or procuring the Financing, whether
or not the Financing is received from said source; and any contact or
information identified for Client by PCMC in connection with seeking the
Financing; sellers, producers, buyers, leaders, borrowers, brokers, lenders,
distributors, manufacturers, technology owners, or their representatives,
employees and agents; and specific individual names, addresses, principals, or
telex/fax/telephone numbers and other contact information; references, product
or technology information, and all other information that becomes known to
Client through its dealings with PCMC, without the advance specific written
consent of PCMC; except that nothing herein shall be construed to prohibit (i)
using or disclosing such information as shall become public knowledge other than
by or as a result of disclosure by a person not having a right to make such
disclosure, and (ii) complying with legal process.
V. Termination: This Agreement may be terminated by the written notice of
either party hereto forwarded to the other party hereto. This Agreement shall be
binding on the parties hereto for the Term provided herein, unless terminated as
provided herein.
Page 4
VI. Arbitration: Any controversy or claim arising out of or relating to
this Agreement; or the breach thereof, or its interpretation or effectiveness,
and which is not settled between the parties themselves, shall be settled by
binding arbitration in Broward County, Florida in accordance with the rules of
the American Arbitration Association and judgment upon the award may be entered
in any court having jurisdiction thereof. Nothing, however, contained herein
shall limit PCMC's rights to injunctive relief as set out in Paragraph VII of
this Agreement. The prevailing party in any litigation, arbitration or mediation
relating to collection of fees, or any other matter under this Agreement, shall
be entitled to recover all its costs, if any, including, but not limited to,
appeals.
VII. Injunctive Relief: Client agrees that its violation or threatened
violation of any of the provisions of this Agreement shall cause immediate and
irreparable harm to PCMC, and, in such event, an injunction restraining Client
from such violation maybe entered against Client in addition to any other relief
available to PCMC.
VIII. Representations and Warranties: Client represents, warrants,
covenants and agrees that Client has a right to enter into this Agreement; that
Client is not a party to any agreement or understanding whether or not written
which would prohibit Client's performance of its obligations hereunder any
proprietary information of any other party which Client is legally prohibited
from using. A breach of this Paragraph IX shall be ground for immediate
termination of this Agreement.
IX. Indemnification and Hold Harmless Clause: Each party to this Agreement
agrees to indemnify and hold harmless the other party against any losses,
claims, liabilities, damages and the like, joint or several, to which the other
directly or indirectly may become subject to in connection with and arising out
of the services which are the subject of this Agreement, except as may be the
direct cause of the gross negligence or willful misconduct of the party seeking
indemnification.
X. Notice: Any notice given or required to be given under this Agreement
shall be in writing and service thereof shall be sufficient if sent by hand or
telex or telegram, facsimile transmission or other similar means of
communication if confirmed by mail, or by certified mail, return-receipt
requested, with postage prepaid, directly to the parties' respective addresses
herein above set forth. Each party may, from time to time, by like written
notice, designate a different address to which notice should be thereafter sent.
Any notice shall be deemed to have given when placed in the United States mail.
XI. Survival: The covenants contained in this Agreement shall survive the
termination of this Consulting Agreement, for whatever reason, and shall be
binding on the parties.
XII. Binding Effect: The terms of the Agreement shall be binding upon the
respective parties hereto, their heirs, their owners, co-owners, partners,
associates, employers, affiliates, subsidiaries, parent companies, nominees,
representatives, employees, agents, clients, consultants and successors and
assigns.
Page 5
XIII. Assignment: This Agreement and the rights and obligations hereunder
may not be assigned or delegated by either party without the prior consent of
the other party.
XIV. Choice of Law: This Agreement is made in the State of Florida, and all
questions related to the execution, construction, validity, interpretation and
performance of this Agreement and to all other issues or claims arising
hereunder, shall be governed and controlled by the laws of the State of Florida.
XV. Venue: Broward, County, Florida, shall be proper venue for any and all
litigation and other proceeds involving this Agreement.
XVI. Counterparts: This Agreement may be signed in more than one
counterpart, in which case each counterpart shall constitute and original of
this Agreement.
XVII. Severability: In the event that any term, covenant, or condition of
this Agreement or the application thereof to any party or circumstances shall,
to any extent, be invalid or unenforceable, the remainder of this Agreement, or
the application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or non enforceable, shall not be
affected thereby; and each term, covenant, or condition of this Agreement shall
be valid and shall be enforced to the fullest extent permitted by law.
XVIII. Modification: No amendment, modification, or waiver of this
Agreement or any provision hereof shall be valid unless in writing duly signed
by the parties hereto, which writing specifically refers to this Agreement and
states that it is an amendment, modification, or waiver.
XIX. Entire Agreement: This Agreement represents the entire agreement
between the parties to this Agreement concerning its subject matter, and any and
all prior representations and agreements with respect to subject matter, if any,
are merged herein and are suspected by this Agreement.
XX. Construction: Paragraph headings are for convenience only and are not
intended to expand or restrict the scope or substance of the provisions of this
Agreement. Whenever used herein, the singular shall include the plural, the
plural shall include the singular, and pronouns shall be read as masculine,
feminine, or neuter as the context requires.
Page 6
IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year first above written.
Presidio Capital & Management Corp.
-----------------------------------
Date: 5/12/98 /s/ Xxxx Xxxxxxx
---------------------------------------
By: Xxxx Xxxxxxx
Chairman/CEO
American Fire Retardant Corporation
-----------------------------------
Date: 5/12/98 /s/ Xxxxxxx X. Xxxxx
-----------------------------------
By: Xxxxxxx X. Xxxxx
CEO/President
Page 7
Exhibit A
---------
The Services Performed
----------------------
PCMC will provide services that will include:
Consulting services which will include the preparation of all documents
necessary to merge AFRC, Wyoming into AFRC, Nevada.
1. Provide accounting services necessary to produce a Use Of Proceeds,
Evaluations, 5 year projections and other accounting consulting
services.
2. Legal Work in connection with the contemplated Offering.*
3. All necessary SEC & Blue Sky Filings.
4. Provide introductions and consulting services with regard to the
raising of Capital.
5. Secure advertised space on IPO. COM
6. Introduce Client to proposed Underwriting Group.
* The Services of PCMC as outlined above, do not include efforts by PCMC to
arrange, secure, or structure short term "bridge" financing which Client
may determine is necessary to finance its operations prior to closing the
contemplated Offering and the receipt of proceeds therefrom, unless a
separate written agreement is entered into for such services between PCMC
and the Client.
* All additional Accounting and Legal Services requested by the Client
other than the normal and usual services required for the completion and
filing of the Offering documents will be by separate hourly billing,
mutually agreed upon. Normal hourly services for clients are $225.00 per
hour plus expenses. Auditing expenses will be at the client's expense.
Page 8
Exhibit B
---------
Fee Structure
-------------
1. Providing Business & Marketing Plans and Program accounting documents.
$10,000 Completion of 504D Offering Memorandum, statutory Blue Sky
filings, and filing Regulation "D" and "SR" forms as required.
2. For providing such legal services as may be necessary to complete,
review, file (SEC) and "Blue Sky" (includes 10 states but exclusive of
state filing fees). $10,000 Provide consulting and legal services
necessary to accomplish the re-capitalization of the company.
3. For providing legal services, writing and filing the 504D $10,000
4. Client will agree to escrow $150,000 from the initial Offering (504D)
to register and complete the SB-2 (IPO) in the amount of $5,000,000.
All fees include legal work with respect to the Offering and work
leading up to the Offering. All other legal work required by client
will be billed at an hourly rate of $225.00 per hour and paid upon
presentation. Extra legal work will be by engagement letter only, and
signed by Xxxxxxx Xxxxxx, Esq.
5. All expenses and state and federal filing fees will be paid by client.
Travel, meetings, etc. will be approved in writing prior to being
expensed. Invoices for such expenses will be tendered monthly and paid
within 10 days of presentation.
Schedule of Fee Payments
------------------------
1. On signing this Agreement.................................... $10,000.00
2. At the time the 504D Offering begins on XXX.XXX ..............$10,000.00
3. After all Blue Sky filings ...................................$10,000.00
TOTAL $30,000.00
Page 9
Additional Requirements:
For a term not to exceed five years, the investment group which will include
PCMC, at its sole option and discretion, will occupy 2 seats of 5 seats on the
Board of Directors. If the Board is expanded to seven (7) members, the
investment group will occupy three (3) seats.
Prior to closing, PCMC and the Client shall enter into a 2 year Consulting and
Financial Advisory Contract, the form and substance to be approved by both
parties. Included in this contract shall be the right if first refusal to enter
into any Agreements on further Offerings, private or public.
Page 10
