EXHIBIT 10.6
CONSULTING AGREEMENT
THIS AGREEMENT, made, entered into this 2nd day of September 2005 (the
"Effective Date"), by and between Luther Capital Management, Inc., a Nebraska
corporation (hereinafter referred to as "Consultant"), and American Technologies
Group, Inc., a Nevada corporation, (hereinafter referred to as "Corporation").
W I T N E S S E T H:
WHEREAS, Consultant will provide valuable services to the Corporation in
connection with the Corporation's acquisition of North Texas Steel Company, Inc.
("North Texas") and the Corporation realizes that Consultant will provide
valuable services to the Corporation and has determined that it would be
desirable to retain Consultant's services under a consulting agreement; and
WHEREAS, Consultant desires to provide such consulting services for the
Corporation as an independent contractor, with the understanding that it shall
not be required to devote its full time to the business of the Corporation and
shall be free to pursue other business interests.
NOW, THEREFORE, in consideration of the premises, the mutual covenants of
the parties herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, it is agreed as follows:
1. CONSULTING ARRANGEMENT. The Corporation hereby contracts for the services of
Consultant and Consultant agrees to perform such duties and responsibilities and
to render advice and consulting as may be requested by the Corporation from time
to time during the term of this consulting arrangement in connection with the
Corporation's acquisition of the North Texas ("Consulting Arrangement").
2. RELATIONSHIP BETWEEN PARTIES. During the term of the Consulting Arrangement,
Consultant shall be deemed to be an independent contractor. Consultant shall not
be considered as having an employee status vis-a-vis the Corporation, or by
virtue of the Consulting Arrangement being entitled to participate in any plans,
arrangements or distributions by the Corporation pertaining to or in connection
with any pension, stock, bonus, profit sharing, welfare benefits, or similar
benefits for the regular employees of the Corporation. The Corporation shall not
withhold any taxes in connection with the compensation due Consultant hereunder,
and Consultant will be responsible for the payment of any such taxes and hereby
agrees to indemnify the Corporation against nonpayment thereof.
3. COMPENSATION FOR THE CONSULTING ARRANGEMENT. As consideration for the
services to be rendered under this Consulting Arrangement by Consultant, the
Corporation hereby agrees to issue to the Consultant, or its designees as set
forth on Exhibit A, which is attached hereto and made a part hereof,
1,268,245,476 shares (the "Shares") of common stock, par value $.001, of the
Corporation subject to the Corporation amending its certificate of incorporation
to increase its authorized common stock.
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4. TERM OF CONSULTING ARRANGEMENT. The Consulting Arrangement shall begin
effective as of the Effective Date and shall continue for a period of three (3)
months from the Effective Date (the "Consulting Period").
5. REPRESENTATIONS BY THE CONSULTANT.
A. The Consultant represents that the Consultant is an "accredited
investor" as such term is defined in Rule 501 of Regulation D ("Regulation D")
promulgated under the Securities Act; and that the Consultant is able to bear
the economic risk of an investment in the Shares.
B. The Consultant hereby acknowledges and represents that (i) the
Consultant has knowledge and experience in business and financial matters, prior
investment experience, including investment in securities that are non-listed,
unregistered and/or not traded on a national securities exchange nor on the
National Association of Securities Dealers, Inc. automated quotation system;
(ii) the Consultant recognizes the highly speculative nature of this investment;
and (iii) the Consultant is able to bear the economic risk that the Consultant
hereby assumes.
C. The Consultant hereby represents that the Consultant, either by reason
of the Consultant's business or financial experience or the business or
financial experience of the Consultant's professional advisors (who are
unaffiliated with and not compensated by the Corporation or any affiliate or
selling agent of the Corporation, directly or indirectly), has the capacity to
protect the Consultant's own interests in connection with the transaction
contemplated hereby.
D. The Consultant understands that the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act") by reason of
a claimed exemption under the provisions of the Securities Act that depends, in
part, upon the Consultant's investment intention. In this connection, the
Consultant hereby represents that the Consultant is acquiring the Shares for the
Consultant's own account for investment and not with a view toward the resale or
distribution to others. The Consultant, if an entity, further represents that it
was not formed for the purpose of purchasing the Shares.
E. The Consultant understands that the Corporation's common stock is
quoted on the OTC Bulletin Board and that there is a limited market for the
common shares. The Consultant understands that even if a public market develops
for the common shares, Rule 144 ("Rule 144") promulgated under the Securities
Act requires for non-affiliates, among other conditions, a one-year holding
period prior to the resale (in limited amounts) of securities acquired in a
non-public offering without having to satisfy the registration requirements
under the Securities Act. The Consultant understands and hereby acknowledges
that the Corporation is under no obligation to register any of the Shares under
the Securities Act or any state securities or "blue sky" laws. The Consultant
understands and acknowledges that presently the Corporation does not have
sufficient shares of common stock to issue to the Consultant and, accordingly,
the Corporation will be required to obtain shareholder approval to file an
amendment to its certificate of incorporation increasing its authorized shares
of common stock.
F. The Consultant consents to the placement of a legend on any certificate
or other document evidencing the shares of common stock and understands that
such securities have not been registered under the Securities Act or any state
securities or "blue sky" laws and setting forth or referring to the restrictions
on transferability and sale thereof contained in this Agreement. The Consultant
is aware that the Corporation will make a notation in its appropriate records
with respect to the restrictions on the transferability of such Shares. The
legend to be placed on each certificate shall be in form substantially similar
to the following:
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"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE
SECURITIES OR "BLUE SKY LAWS," AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR
UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED."
G. The Consultant represents that the Consultant has full power and
authority (corporate, statutory and otherwise) to execute and deliver this
Agreement. This Agreement constitutes the legal, valid and binding obligation of
the Consultant, enforceable against the Consultant in accordance with its terms.
The Consultant acknowledges that at such time, if ever, as the Shares are
registered as the Securities and Exchange Commission, sales of the Shares will
be subject to state securities laws.
H. The Consultant agrees to hold the Corporation and its directors,
officers, employees, affiliates, controlling persons and agents and their
respective heirs, representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a
result of (a) any sale or distribution of the Shares by the Consultant in
violation of the Securities Act or any applicable state securities or "blue sky"
laws; or (b) any false representation or warranty or any breach or failure by
the Consultant to comply with any covenant made by the Consultant in this
Agreement or any other document furnished by the Consultant to any of the
foregoing in connection with this transaction.
6. NOTICES. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
(a) if to the Corporation, to it at: with a copy to:
American Technologies Group, Inc. Xxxxxxx Xxxxxxxxx, Esq.
X.X. Xxx 00 Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
Xxxxxxxx, XX 00000 1065 Avenue of the Americas
Fax: ( __) ____________ Xxx Xxxx, XX 00000
Fax: (000) 000-0000
(b) if to Consultant, to him at: with a copy to:
Luther Capital Management, Inc.
c/o Xxxxxx Xxxxxxx,
Xxxxxxxx Xxxxxxxxxx law firm
Regency Westpointe
00000 Xxxxxxx Xxxxxxx Xxxxx, Xxxxx
000 Xxxxx, XX 00000-0000
phone 000-0000-0000
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6. BINDING EFFECT. This Agreement shall extend to, shall inure to the benefit of
and shall be binding upon all the parties hereto and upon all of their
respective heirs, successors and representatives.
7. ENTIRE AGREEMENT. This Agreement, including the agreements incorporated by
reference, contains the entire Agreement among the parties hereto with respect
to the matters contemplated hereby and supersedes all prior agreements and
undertakings between the parties with respect to such matters. This Agreement
may not be amended, modified or terminated in whole or in part, except in
writing, executed by each of the parties hereto.
8. INDEMNIFICATION. Consultant hereby agrees to hold harmless and indemnify
Corporation from and against any and all loss, damage, expense, and cost
(including reasonable attorneys' fees incurred in connection with the same)
incurred by Corporation as a result of Consultant's breach of any covenant or
agreement made herein.
9. SEVERABILITY. Should any part of any provision of this Agreement be declared
invalid by a court of competent jurisdiction, such decision or determination
shall not affect the validity of any remaining portion of such provision or any
other provision and the remainder of the Agreement shall remain in full force
and effect and shall be construed in all respects as if such invalid or
unenforceable provision or portion thereof were not contained herein. In the
event of a declaration of invalidity, the provision or portion thereof declared
invalid shall not necessarily be invalidated in its entirety, but shall be
observed and performed by the parties to the Agreement to the extent such
provision is valid and enforceable.
10. SECTION HEADINGS. The section headings contained herein are for convenience
of reference only and shall not be considered any part of the terms of this
Agreement.
11. CHOICE OF LAW. This Agreement shall be interpreted and performed in
accordance with the laws of the State of New York, and the parties agree,
notwithstanding the principles of conflicts of law, that the internal laws of
the State of New York shall govern and control the validity, interpretation,
performance, and enforcement of this Agreement.
Signature page follows
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IN WITNESS WHEREOF, Consultant has hereunto put her hand, and the
Corporation has caused this instrument to be executed in its corporate name by
its duly authorized officer, all as of the day and year first above written.
CONSULTANT:
Luther Capital Management, Inc.
/s/Xxxxxxx X. Xxxxxx
--------------------
Xxxxxxx X. Xxxxxx, CEO
CORPORATION:
American Technologies Group, Inc.
/s/ Xx. Xxxx Xxxxx
------------------
Xx. Xxxx Xxxxx, CEO
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Exhibit A - Designees
Luther Capital Management, Inc. 119,154,205
Q Street Investors LLC 119,154,205
Xxxxxx, Xxxxxxx 238,308,410
Cerca Trova LLC 238,308,410
Xxxxxxxx, Xxx 238,308,410
Xxxxxxxx, Xxxxx 238,308,410
R I Xxxxxx LLC 238,308,410
Xxxx Xxxxx 143,788,528
Xx Xxx Xxxx 50,222,521
Xxxxxx Xxxxxxx 25,111,260
Terra Nova Explorer Fund 25,111,260
Total 1,674,084,028
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