EXHIBIT 4.1
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CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "Agreement") is entered into this 21st day
of July, 2006 by and between ARIES EQUITY CORP., a New York corporation (the
"Consultant") AND WESTERN POWER & EQUIPMENT CORP., a Delaware corporation having
offices at ▇▇▇▇-▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company").
W I T N E S S E T H:
WHEREAS the Company desires to obtain Consultant's non-exclusive consulting
services in connection with the Company's business and financial affairs, and
Consultant is willing to render such services as hereinafter more fully set
forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, the parties agree as follows:
1. Definitions. As used herein the following terms, unless the
context otherwise requires, have the following respective meanings:
(a) The term "Company" shall mean Western Power & Equipment
Corp., a Delaware corporation, and any corporation that shall
succeed, or assume the obligations of, Western Power & Equipment
Corp.
(b) The term "Common Stock" means the Common Stock, $0.001 par
value per share of Company.
(c) The term Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the
National or SmallCap Market of The Nasdaq Stock Market, Inc.
("Nasdaq"), then the closing or last sale price,
respectively, reported for the last business day immediately
preceding the Determination Date.
(ii) If the Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq
but is quoted on the NASD Over The Counter Bulletin Board,
then the mean of closing bid and asked prices reported for
the last business day immediately preceding the Determination
Date.
(iii) If the Common Stock is not publicly traded, then as
the Company and Consultant agree or in the absence of
agreement by arbitration in accordance
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with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a
panel of persons qualified by education and training to pass
on the matter to be decided.
(iv) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed
to be a liquidation, dissolution or winding up pursuant to
charter of Company, then all amounts to be payable per share
to holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus
all other amounts to be payable per share in respect of the
Common Stock in liquidation under the charter.
2. Engagement. The Company hereby engages the Consultant to
advise it on a range of corporate, financial and associated matters
(collectively, the "Services"). The Services shall be rendered only
upon the request of the Company and shall consist SOLELY of the
following:
a. Analyze and assess alternatives for the Company, if any, in
raising capital, including the use of private and public
offerings of the securities of the Company;
b. Assisting the Company in establishing relationships with
securities broker-dealers and institutional investors for the
purposes of obtaining capital for the Company through
transactions not involving a public offering;
c. Providing the Company with recommendations, review of
documents and other advice relating to selection and
potential engagement of underwriters, market makers, legal
counsel and accountants for the Company; and
d. Advise the Company with respect to the Company's shareholder
relations; and identify opportunities to the Company, if any,
for the Company involving a business combination with an
appropriate merger or acquisition candidate;
3. Performance.
a. The Consultant will use its best efforts to furnish the
Services to the Company on a timely basis. The Consultant
does not guarantee that it can perform the Services
successfully;
b. It is understood and agreed that the Services do not include
the provision by Consultant of any services to the Company or
of any public relations services, advertising services,
accounting or auditing services, legal services or services
in connection with acting as an underwriter, broker, dealer
investment banker, or market maker as to the securities of
the Company. In this connection, it is further understood and
agreed that the Services do not require or contemplate that
the Consultant will raise any capital for or on
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behalf of the Company;
c. The Consultant shall render the services from a location or
locations chosen by the Consultant; and
d. The Consultant shall be required to devote only such time as
the Consultant deems reasonably necessary in the Consultant's
sole discretion to render the Services. Notwithstanding the
foregoing, the Consultant shall not be required to devote
more than 20 hours in any consecutive thirty-day period in
rendering the Services.
4. Information. In connection with Consultant's activities
hereunder, the Company will cooperate with Consultant and furnish
Consultant upon request with all information regarding the business,
operations, properties, financial condition, management and
prospects of the Company (all such information so furnished being
the "Information") which Consultant deems appropriate and will
provide Consultant with access to the Company's officers, directors,
employees, independent accountants and legal counsel. The Company
represents and warrants to Consultant that it shall use its best
efforts to make all Information available to Consultant complete and
correct in all material respects. The Company further represents and
warrants that it shall use its best efforts to make any projections
and other forward-looking information provided to Consultant, based
upon assumptions which, in light of the circumstances under which
they are made, are to the Company's belief reasonable. The Company
recognizes and confirms that Consultant: (i) will use and rely
primarily on the Information and on information available from
generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified
the same; and (ii) does not assume responsibility for the accuracy
or completeness of the Information and such other information. Any
advice rendered by Consultant pursuant to this Agreement may not be
disclosed publicly without Consultant's prior written consent.
Consultant hereby acknowledges that certain of the Information
received by Consultant may be confidential and/or proprietary,
including Information with respect to the Company's technologies,
products, business plans, marketing, and other Information which
must be maintained by Consultant as confidential. Consultant agrees
that it will not disclose such confidential and/or proprietary
Information.
5. Service Term. Except as otherwise provided herein, this
Agreement shall be effective for a period of one (1) year commencing
on the date hereof (the "Service Term").
6. Suspension of Services and Termination. The Consultant shall
not be required to render any of the Services during the Service
Term during any time that the Company has breached any of its
obligations under this Agreement. Any such breach shall not relieve
the Company of any of its obligations under this Agreement.
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7. Compensation.
a. The Company agrees to issue simultaneously with the execution
of this Agreement to Consultant for its services hereunder
500,000 shares of the Company's Common Stock (the "Shares").
The Company agrees that the Shares will not be subject to
cancellation if the Agreement is terminated for any reason or
by any party during the Service Term.
8. Registration Rights. The Consultant acknowledges that the
Shares are not eligible for inclusion in an S-8 registration
statement.
9. Anti Dilution Protections. The number of Shares will be
subject to anti-dilution protection for proportional adjustments for
stock splits, stock dividends, recapitalizations and the like.
10. Expenses. Consultant shall be entitled to reimbursement by
the Company of such reasonable out-of-pocket expenses as Consultant
may occur in performing services under this Agreement; provided,
however, that reimbursement of any expenses in excess of $250.00
shall require the prior consent of the Company.
11. Public Disclosure. Any reference to the Consultant or any
advice, information or other matter pertaining to the Services shall
not be publicly disclosed or made available to any third parties
without the prior written consent of the Consultant, unless such
disclosure is required by law.
12. Indemnification.
a. The Company hereby agrees to indemnify, defend and hold
harmless the Consultant, its affiliates, directors, officers,
partners, agents and employees and each other person, if any,
controlling the Consultant or any of its affiliates
(collectively, the "Consultant Indemnified Parties"), to the
full extent lawful, from and against any and all demands,
claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including, without
limitation, interest, penalties and attorneys' fees and
expenses asserted against, imposed upon or incurred by the
Consultant Indemnified Parties resulting from or by reason of
a breach of any representation, warranty or covenant
contained herein or as a result of any action improperly
taken or omitted to be taken as required hereby by the
Company, their agents or employees;
b. The Consultant hereby agrees to indemnify, defend and hold
harmless the Company, to the full extent lawful, from and
against any and all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and
expenses, including, without limitation, interest, penalties
and attorneys' fees and expenses asserted against, imposed
upon or incurred by
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the Company resulting from or by reason of a breach of any
representation, warranty or covenant contained herein or as a
result of any action improperly taken or omitted to be taken
as required hereby by the Consultant, its agents or
employees. The aggregate liability of the Consultant with
respect to such indemnification shall be limited to the Fair
Market Value of the Shares, determined on the date of
execution of this Agreement, transferred to Consultant
pursuant to Section 7 hereof;
c. No party shall be liable to indemnify any other party to the
extent that demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, costs or expenses
resulted from gross negligence or willful misconduct;
d. The rights of indemnification as set forth in this Paragraph
12 shall be in addition to any rights that the Consultant
Indemnified Parties or the Company or any other person
entitled to indemnification may have in law or otherwise,
including but not limited to, any right to contribution,
provided, however, in no event shall the Consultant be liable
or responsible for any amount in excess of the Fair Market
Value of the Shares, determined on the date of execution of
this Agreement, transferred to Consultant pursuant to Section
7 hereof; and
e. Any party seeking indemnification ("Indemnitee") shall notify
the other party ("Indemnitor") of any claim against
Indemnitee within 15 days after it has notice of such claim,
but failure to notify Indemnitor shall in no case prejudice
the rights of Indemnitee under this Agreement unless
Indemnitor shall be prejudiced by such failure and then only
to the extent of such prejudice. Should Indemnitor fail to
discharge or undertake to defend Indemnitee against such
liability (with counsel reasonably approved by Indemnitee),
within 10 days after Indemnitee gives Indemnitor written
notice of the same, then Indemnitee may settle such claim,
and Indemnitor's liability to Indemnitee shall be
conclusively established by such settlement, the amount of
such liability to include both the settlement consideration
and the reasonable costs and expenses, including attorney's
fees, incurred by Indemnitee in effecting such settlement.
Indemnitee shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel
shall be at the expense of Indemnitee unless: (i) the
employment of such counsel and the fees payable thereto shall
have been authorized in writing by Indemnitor in connection
with the defense of such action, (ii) Indemnitor shall not
have employed counsel to direct the defense of such action,
or (iii) Indemnitee shall have reasonably concluded that
there may be defenses available to it which are different
from or additional to those available to Indemnitor which
results in a conflict of interest (in which case Indemnitor
shall not have the right to direct the defense of such action
or of Indemnitee), in any of which events such fees and
expenses shall be borne by
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Indemnitor.
13. Status of Consultant. The Consultant shall be deemed to be an
independent contractor. The Consultant shall have no authority to,
and shall not, bind the Company to any agreement or obligation with
a third party. Nothing in this Agreement shall be construed to
constitute the parties hereto as partners or joint venturers with
each other.
14. Other Services. The Company acknowledges that Consultant has
been, and may in the future be, engaged to provide services to other
companies in the industry in which the Company is involved.
Additionally, Consultant shall not be required to devote any minimum
amount of time towards providing services to the Company pursuant to
this Agreement. Subject to the confidentiality provisions of
Consultant contained in Section 4 hereof, the Company acknowledges
and agrees that nothing contained in this Agreement shall limit or
restrict the right of Consultant or of any member, manager, officer,
employee, agent or representative of Consultant, to be a member,
manager, partner, officer, director, employee, agent or
representative of, investor in, or to engage in, any other business,
whether or not of a similar nature to the Company's business, nor to
limit or restrict the right of Consultant to render services of any
kind to any other corporation, firm, individual or association.
Consultant may, but shall not be required to, present opportunities
to the Company.
15. Successors and Assigns. The benefits of this Agreement shall
inure to the parties hereto, their respective successors and assigns
and to the indemnified parties hereunder and their respective
successors and assigns, and the obligations and liabilities assumed
in this Agreement shall be binding upon the parties hereto and their
respective successors and assigns. Notwithstanding anything
contained herein to the contrary, neither Consultant nor the Company
shall assign any of its obligations hereunder without the prior
written consent of the other party.
16. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto in respect of the subject matter
contained herein. There are no representations, warranties,
promises, covenants or undertakings other than those expressly set
forth herein. All final decisions with respect to consultations or
services rendered by Consultant pursuant to this Agreement shall be
those of the Company, and there shall be no liability on the part of
the Consultant in respect thereof. This Agreement supersedes all
prior agreements, whether written or oral, between the parties with
respect to the subject matter hereof.
17. Amendments. This Agreement may not be modified or amended
except in a writing duly executed by the parties hereto.
18. Waiver. Any waiver or any breach of any of the terms or
conditions of this Agreement shall not operate as a waiver of any
other breach of such terms or conditions or of any other term or
condition, nor shall any failure to insist upon strict performance
or to enforce any provision hereof on any one occasion operate as a
waiver of such provision or of any other provision hereof or a
waiver of the right to insist upon strict
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performance or to enforce such provision or any other provision on
any subsequent occasion. Any waiver must be in writing.
19. Headings. The headings contained in this Agreement have been
inserted for convenience and reference purposes only and shall not
affect the meaning or interpretation hereof in any manner
whatsoever.
20. Separability. If any of the terms, provisions or conditions
contained in this Agreement shall be declared to be invalid or void
in any judicial proceeding, this Agreement shall be honored and
enforced to the extent of its validity, and those provisions not
declared invalid shall remain in full force and effect.
21. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be
in writing and shall be deemed given when received by the parties at
the addresses below or to such other address, or the attention of
such other party, as the parties shall advise the other by notice
given in conformity herewith.
If to the Company: Western Power & Equipment Corp.
▇▇▇▇-▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, President & CEO
If to the Consultant: Aries Equity Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: D. ▇▇▇▇▇▇ ▇▇▇▇, CEO
or to such other address, or the attention of such other party, as
the parties shall advise the other by notice given in conformity
herewith.
22. Survival of Representations and Warranties. The
representations and warranties contained herein shall survive the
execution of this Agreement and the Service Term.
23. Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to
be fully performed therein, without regard to conflicts of law
principles. The Company irrevocably submits to the exclusive
jurisdiction of any court of the State of New York or the United
States District Court for the State of New York for the purpose of
any suit, action or other proceeding arising out of this Agreement,
or any of the agreements or transactions contemplated hereby, which
is brought by or against the Company, and agrees that service of
process in connection with any such suit, action or proceeding may
be made upon the
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Company in accordance with Section 21 hereof. The parties hereby
expressly waive all rights to trial by jury in any suit, action or
proceeding arising under this Agreement.
24. Counterparts. This Agreement may be executed in counterparts
each of which shall be deemed an original and all of which together
shall constitute one and the same agreement.
25. Facsimile Signatures. Facsimile signatures on counterparts of
this Agreement are hereby authorized and shall be acknowledged as if
such facsimile signatures were an original execution, and this
agreement shall be deemed as executed when an executed facsimile
hereof is transmitted by a party to any other party.
26. No Third Party Beneficiaries. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by
any person or entity not a party hereto, except those entitled to
the benefits of Section 12. Without limiting the foregoing, the
Company acknowledges and agrees that Consultant is not being engaged
as, and shall not be deemed to be, an agent or fiduciary of the
Company's stockholders or creditors or any other person by virtue of
this Agreement or the retention of Consultant hereunder, all of
which are hereby expressly waived.
27. Arbitration. Any dispute controversy, difference or claim
arising between the parties out of, relating to or in connection
with this Agreement, shall be settled by arbitration in accordance
with the applicable rules of the American Arbitration Association
then in effect. Any arbitration hearing shall be held in Nassau
County, New York. This agreement to arbitrate shall be specifically
enforceable. The award of the arbitrator(s) shall be final and
binding, on the parties and judgment upon any such award shall be
enforceable by the prevailing party before the courts of competent
jurisdiction of the non-prevailing party's domicile. This provision
shall survive the termination of this Agreement. In the event one of
the parties gives the other parties notice of arbitration, the
parties shall agree upon the arbitrator within thirty days from the
date of such notice, and if they fail to do so, the arbitrator shall
be selected by the American Arbitration Association. The reasonable
compensation and expenses of the arbitration shall be shared equally
by the parties. In each instance, the decision of the arbitrator
shall be final and binding.
28. Legal Representation. The parties to this Agreement
acknowledge that they have been advised that they should seek and
have had the opportunity to seek counsel to review this Agreement
and to obtain the advice of such counsel relating thereto
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ARIES EQUITY CORP. WESTERN POWER &
EQUIPMENT CORP.
By: /s/ D. ▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: D. ▇▇▇▇▇▇ ▇▇▇▇, President Name: ▇▇▇▇ ▇▇ ▇▇▇▇, President & CEO
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