Exhibit 10.9 - Sales Agent Agreement and Warrant - Barretto Securities


    Exhibit
      10.9

     

    Mr.
      Dan
      O’Brien

    Flexible
      Solutions International

    615
      Discovery St.

    Victoria,
      BC V8T 5G4

    


    April
      1,
      2007

    


    Dear
      Dan,

    


    


    This
      letter agreement (“Agreement”)
      will
      confirm that Flexible Solutions International. (together with its subsidiaries
      and affiliates, “Client”)
      hereby
      retains Barretto Securities Inc. (“Barretto”) to provide non-exclusive financial
      advisory and investment banking services to Client in connection with Client’s
      intended “Transaction” (as hereinafter defined), in accordance with the terms
      and conditions specified herein. This letter agreement is effective November
      1,
      2006. As used herein, the term “Transaction”
shall
      mean any transaction or event or series or combination thereof whereby, directly
      or indirectly, Client effects the private sale of its equity securities or
      of
      any securities or instruments convertible, in whole or in part, directly or
      indirectly, into Client’s equity securities (collectively, “Securities”)
      for a
      consideration of $5,500.000 or a lesser amount that is acceptable to Client
      in
      its sole discretion, on terms and conditions that are acceptable to Client
      in
      its sole discretion. 

     

    1.  General.
      Pursuant to this Agreement, Barretto shall render the following services, as
      reasonably requested by Client and appropriate for the Transaction:

     

    1.1.  use
      its
      best efforts to privately place Client’s Securities,

     

    1.2.  advise
      Client as to the form and structure of the Transaction,

     

    1.3.  assist
      in
      the preparation of confidential private placement materials (“Materials”)
      that
      will be provided to prospective investors. The Materials may include: an
      Executive Summary, a Private Placement Memorandum, a Term Sheet, a Subscription
      Agreement, and/or a Power Point presentation, or may be limited to documents
      and
      information currently on file with the Securities and Exchange Commission.
      Responsibility for the accuracy and contents of the Materials shall be solely
      that of Client, and the Materials shall not be made available or used in
      discussions until both the Materials, and its use, have been approved by
      Client,

     

    1.4.  evaluate
      various potential Transactions,

     

    1.5.  assist
      Client in coordinating due diligence and related activities relating to
      potential Transactions,

     

    1.6.  assist
      Client, in concert with Client’s lawyers, accountants and executives in
      negotiating the financial terms and structure of a Transaction,

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    1.7.  assist
      the management of Client in making appropriate presentations to the Board of
      Directors of Client concerning the financial aspects of potential Transactions,
      and

     

    1.8.  assist
      in
      the preparation of the definitive documentation for the
      Transaction.

     

    Client
      acknowledges that Barretto does not and cannot make any guarantee that the
      Transaction will be consummated, and that Client will have no claim against
      Barretto as a result of the Transaction not being consummated.

    


    Barretto’s
      services under this Agreement do not include preparation for or rendering of
      testimony or opinions in formal regulatory proceedings, preparation for or
      rendering of testimony in litigation where Barretto is not a party, preparation
      for or rendering of any valuation, appraisal or “fairness” opinion, or advising
      or assisting Client in a matter other than a Transaction. If Client should
      request Barretto to provide additional services not otherwise contemplated
      by
      this Agreement, Client and Barretto will enter into an additional agreement
      which will set forth the nature and scope of the services, appropriate
      compensation and other customary matters, as mutually agreed upon by Client
      and
      Barretto.

    


    In
      order
      to coordinate the efforts in connection with a Transaction, during the term
      of
      Barretto’s engagement neither Client nor its management will conduct discussions
      with any third party regarding a potential Transaction without the assistance
      of
      Barretto, and Client and Barretto will promptly disclose to and consult with
      each other with respect to inquiries or expressions of interest received from
      third parties in connection with a potential Transaction. N/A

    Client
      may, in its discretion, postpone, modify or abandon the proposed Transaction
      prior to the closing and Client may refuse to discuss or negotiate an investment
      in Client by any party for any reason whatsoever and may terminate negotiations
      with any party at any time. 

     

    2.  Compensation.
      Client
      hereby agrees to retain Barretto for the purposes specified above. The fees
      for
      such services shall be payable by Client as described in Exhibit
      A
      attached
      hereto and hereby made a part hereof.

     

    3.  Right
      of First Refusal.
      Client
      hereby grants Barretto the first right to exclusively perform the following
      “Future Services” (as hereinafter defined) on behalf of Client (the
“Right
      of First Refusal”):
      the
      Right of First Refusal will apply to all Future Services sought by Client before
      the first to occur of the following: (i) Client terminates this Agreement for
      “Cause” (as hereinafter defined), or without Cause; or (ii) Client does not
      close a Transaction within one (1) year of the date hereof. For purposes of
      this
      Agreement, “Future
      Services”
shall
      mean any investment banking or investment advisory services sought by Client
      in
      connection with the private placement of Client’s Securities. The termination of
      the Right of First Refusal shall not affect Barretto’s right to perform all
      Future Services which Client sought before such termination. N/A

     

    4.  Term
      and Termination 

     

    4.1 Term.
      The
      initial term of this Agreement shall commence on the date this Agreement is
      executed by Client and shall continue until the close of business on June 29,
      2006 and be extended upon mutual consent of the parties. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    4.2 Termination.
      Notwithstanding the foregoing (a) either party may terminate this Agreement
      at
      any time, for “Cause” (as hereinafter defined), effective at the time specified
      in the notice of termination, (b) Client may terminate this Agreement at any
      time, without Cause, effective as of the end of the then-current term, and
      (c)
      Barretto may terminate this Agreement at any time, effective at the time
      specified in the notice of termination, if, in its sole discretion, a change
      has
      occurred in Client’s financial condition, results of operations, properties,
      business or prospects, or in the composition of Client’s management or Board of
      Directors which, in Barretto’s determination, reasonably made, has materially
      adversely affected the marketability of Client or its Securities or the
      likelihood of completing a Transaction. From and after the date of termination,
      Barretto shall render no additional service to Client hereunder, except as
      may
      be otherwise agreed by Barretto and Client. For purposes hereof, “Cause”
shall
      mean the failure of either party to perform one or more of its material
      obligations hereunder, if such failure has not been cured within sixty (60)
      days
      of receiving the other party’s written notice describing the failure in detail.
      Upon any termination of this Agreement, the services of Barretto will be
      terminated without liability or continuing obligation to Client. 

     

    4.3 Effects
      of Termination.
      Upon
      the termination of this Agreement, certain portions of this Agreement shall
      continue in full force and effect, regardless of such termination, as
      follows:

     

    4.3.1  Upon
      termination by Client without Cause, or upon termination by Barretto pursuant
      to
      subparagraph 4.2(c), above, or upon termination by Barretto for
      Cause:
      

     

    (i)
      the
      obligations of Client with respect to any reimbursable expenses incurred by
      Barretto to be paid by Client to Barretto pursuant to this Agreement (including
      pursuant to Exhibits
      A and B
      hereto)
      or any related agreement subsequently entered into; N/A

     

    (ii)
      the
      obligations of Client and Barretto with respect to this paragraph 4,
      indemnification and contribution (paragraph 5 and Exhibit
      B),
      confidentiality and accuracy of information provided (paragraph 7), waiver
      of
      right to jury trial (paragraph 14.5), potential conflicts (paragraph 9) and
      limitations on duties and third party rights (paragraph 13); 

     

    (iii)
      Client shall pay Barretto a Termination Fee of One Hundred Thousand Dollars
      ($100,000), payable in full by Client on the effective date of the termination;
      and N/A

     

    (iv)
      Client shall pay Barretto the Placement Fee described in Exhibit
      A
      in the
      event Client enters into a definitive agreement with respect to any Transaction
      at any time prior to the date twelve (12) months following the date of
      termination with a “Prospective Investor” (as hereinafter defined). For purposes
      hereof, “Prospective
      Investor”
shall
      mean a person or entity (X) introduced during the term of the Agreement by
      Barretto to Client, or (Y) as to which Barretto provided advice regarding the
      Transaction during the term of the Agreement, or (Z) who was, or should have
      been, disclosed by Client to Barretto pursuant to the terms of this Agreement.
      All Prospective Investors shall be included on a Prospective Investor list
      maintained by Barretto during the term of this Agreement. The Prospective
      Investor list shall be disclosed to Client from time to time, upon
      request.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.3.2  Upon
      termination by Client for Cause:
      

     

    (i)
      the
      obligations of Client with respect to any reimbursable expenses incurred by
      Barretto to be paid by Client to Barretto pursuant to this Agreement (including
      pursuant to Exhibits
      A and B
      hereto)
      or any related agreement subsequently entered into; and 

     

    (ii)
      the
      obligations of Client and Barretto with respect to this paragraph 4 and with
      respect to indemnification and contribution (paragraph 5 and Exhibit
      B),
      confidentiality and accuracy of information provided (paragraph 7), waiver
      of
      right to jury trial (paragraph 14.5), potential conflicts (paragraph 9) and
      limitations on duties and third party rights (paragraph 13). 

     

    5.  Indemnity.
      In
      partial consideration for the agreement of Barretto to furnish services, Client
      agrees to indemnify Barretto in accordance with the provisions set forth in
      Exhibit
      B
      attached
      hereto and hereby made a part hereof, all of which provisions are an integral
      part of this Agreement and shall survive any termination of this Agreement.
      

     

    6.      
      Representations
      and Warranties of Client.
      Client
      represents, warrants and agrees that: 

    (a)
      The
      Securities will be offered and sold in reliance upon an exemption from the
      registration requirements of Section 5 of the Securities Act of 1933, as
      amended, and in compliance with all other securities laws applicable to the
      Transaction; 

    (b)
      The
      Materials will not contain, and during the course of the Transaction Client
      will
      not make, any untrue statement of any material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading; 

    (c)
      It
      acknowledges that Barretto deems its relationships with its sources, resources
      and contacts to be highly proprietary and sensitive since they are often the
      result of years of relationship-building, and agrees not to divulge them to
      any
      third-party without Barretto’s consent, and to make use of them only in
      connection with the purpose and terms of this Agreement; 

    (d)
      Any
      compensation payable to any third parties unrelated to Barretto will not reduce
      or otherwise affect the compensation payable to Barretto, and Client is not
      and
      will not become obligated under any other agreement in a way which conflicts
      with this one, and that Client will take no action which can result in the
      loss
      of any rights Barretto has under this Agreement; and 

    (e)
      It
      will maintain accurate records of all persons and entities (including, without
      limit, officers, directors and stockholders of Client) with whom it has contact
      after the date of this Agreement who may be participants in a Transaction or
      who
      may be resources for identifying participants in a Transaction, and it will
      disclose to Barretto the names of such persons and entities promptly upon any
      such contact. N/A

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    7.  Use
      of
      Information and Confidentiality.
      Any
      advice, written or oral, rendered by Barretto pursuant to this Agreement is
      provided by Barretto solely for the confidential use by the Board of Directors
      and senior management of Client and, except as required by law, may not be
      disclosed publicly without Barretto’s prior written consent or used for any
      purposes not related to Client’s participation in a Transaction or reproduced,
      disseminated, quoted or referred to at any time, in any manner or for any
      purpose; nor shall any public or other references to Barretto (or to such
      opinions or advice) be made without the express prior written consent of
      Barretto, which consent shall not be unreasonably withheld. Client agrees that
      Barretto has the right to place advertisements in financial and other
      newspapers, subject to Client’s right to review and change such advertisements,
      which right shall be exercised reasonably. 

     

    Client
      will furnish to Barretto such information as is reasonably appropriate to its
      engagement hereunder. Client agrees and hereby represents that all information
      furnished to Barretto by or on behalf of Client will be accurate and complete
      in
      all material respects at the time provided, and that if Client becomes aware
      that any such information becomes inaccurate, incomplete or misleading during
      the term of Barretto’s engagement hereunder, Client will promptly advise
      Barretto and provide all necessary corrections. Client recognizes and confirms
      that Barretto, in performing the services contemplated under this Agreement,
      will be relying on information and data furnished by Client or third parties
      who
      may be involved in a potential Transaction without independent verification,
      that Barretto will not assume responsibility for the accuracy or completeness
      of
      such information, and that Barretto will not make a physical inspection,
      independent appraisal or valuation of any of the assets or liabilities of
      Client, or of Client.

     

    Barretto
      agrees that the information it receives from Client that is designated as
      nonpublic, confidential information, as well as any analyses, reports, notes
      or
      other documents or compilations containing any such nonpublic, confidential
      information shall be distributed only to persons approved by Client, not to
      be
      unreasonably withheld or delayed, in connection with prospective Transactions,
      and shall be furnished to such approved persons only in accordance with a
      confidentiality and nondisclosure agreement approved by Client, which approval
      shall not be unreasonably withheld or delayed. Barretto also agrees that the
      nonpublic, confidential information furnished to it by Client pursuant to this
      Agreement shall not be disclosed publicly, shall not be disclosed to any
      unapproved person, and shall not be used for any purpose other than in
      connection with the performance of Barretto’s services hereunder without
      Client’s prior written consent, which may be granted or withheld in Client’s
      sole discretion. The foregoing shall not apply to any information that is public
      when provided or thereafter becomes public (other than by Barretto’s breach of
      its confidentiality obligations to Client) or which is requested to be disclosed
      by judicial or administrative process or otherwise by applicable law or
      regulation. In connection with any judicial or administrative process or where
      disclosure is compelled by applicable law or regulation, unless prohibited
      by
      law, Barretto shall promptly give Client prior notice thereof so that it may
      seek a protective order or other appropriate remedies.

     

    8.  Exclusivity.
      The
      parties acknowledge and agree that Client has retained, or may in the future
      retain, other financial advisors and/or investment bankers to perform financial
      advisory and/or investment banking services similar to those performed by
      Barretto with respect to matters other than the proposed Transaction and any
      Future Services as to which Barretto has a Right of First Refusal. The
      engagement by Client of such additional financial advisors and/or investment
      bankers shall in no way affect the compensation arrangements provided for herein
      with respect to the Transaction and any such Future Services and Barretto shall
      be under no obligation whatsoever to any such additional financial advisors
      and/or investment bankers.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    9.  Limitation
      on Advice.
      It is
      specifically understood that Client will not base its decisions regarding
      whether and how to pursue a Transaction solely on Barretto’s advice, but will
      also rely on the advice of Client’s legal, tax and other business advisors and
      such other advisors and factors which Client considers appropriate.

     

    10.  Conflicts.
      Client
      acknowledges and agrees that Barretto is engaged in a broad range of activities
      and services and does not and will not be working exclusively for Client in
      the
      industry which is the subject of this engagement, and agrees that it does not
      now nor will Client in the future object to such non-exclusivity. Client
      understands and agrees that in the ordinary course of Barretto’s business,
      Barretto or its affiliates may at any time be providing or arranging financing
      or providing other financial services to prospective investors, lenders or
      other
      entities or persons that may be involved in transactions similar to the
      Transaction. 

     

    11.  Notice.
      Notice
      given pursuant to any of the provisions of this Agreement shall be in writing
      and shall be mailed, by certified or registered mail, sent by
      nationally-recognized overnight delivery service or personally delivered to
      Client and to Barretto at the following addresses, or such other addresses
      as
      the parties may designate from time to time: 

     

    If
      to
      Barretto:

    


    Albert
      Barretto Jr., Compliance Officer

    Barretto
      Securities Inc.

    1105
      Delaware Ave.

    Buffalo,
      New York 14209

    


    If
      to
      Client:

    


    Mr.
      Dan
      O’Brien

    Flexible
      Solutions International

    615
      Discovery St.

    Victoria,
      BC V8T 5G4

    


    


    Notice
      shall be effective three (3) business days after mailing, one (1) business
      day
      after delivery to an overnight delivery service, or upon personal
      delivery.

     

    12.  Counterparts.
      This
      Agreement may be executed simultaneously in two or more counterparts, each
      of
      which shall be deemed an original, but all of which constitute one and the
      same
      instrument.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    13.  No
      Third Party Beneficiaries; No Fiduciary Duty.
      This
      Agreement has been and is made solely for the benefit of Client and Barretto,
      and their respective successors and assigns, and no other person shall acquire
      or have any right under or by virtue of this Agreement. It is acknowledged
      and
      agreed that Client’s engagement of Barretto hereunder is not intended to confer
      rights upon any person not a party hereto (including stockholders, employees
      or
      creditors of Client) as against Barretto or its affiliates, or their directors,
      officers, employees or agents. Barretto, as an independent contractor under
      this
      Agreement, shall not assume the responsibilities of a fiduciary to Client or
      its
      stockholders in connection with the performance of Barretto’s services
      hereunder, and any duties of Barretto arising out of its engagement shall be
      owed solely to Client.

     

    14.  Miscellaneous

     

    14.1.  This
      Agreement (including all Exhibits hereto) incorporates the entire understanding
      of the parties with respect to the subject matter of this Agreement, and may
      not
      be modified, amended or supplemented except by written agreement executed by
      both parties hereto.

     

    14.2.  This
      Agreement amends and supersedes all prior agreements of the parties with respect
      to the subject matter herein, and in the event of any conflict or ambiguity
      between the terms of any such prior agreement and this Agreement, the terms
      of
      this Agreement shall control.

     

    14.3.  This
      Agreement and any related documents shall be governed by, and construed in
      accordance with, the laws of the State of New York, without regard to the
      principles of conflicts of law. Client and Barretto irrevocably and
      unconditionally submit to the exclusive jurisdiction of any Federal or state
      court sitting in the city of New York for the purpose of any suit, action or
      other proceeding arising out of this Agreement. Client and Barretto hereby
      agree
      that sending any service of process, summons, notice or other document by US
      registered or certified mail addressed to Client or Barretto as provided in
      this
      Agreement shall constitute effective service or delivery, as the case may be,
      in
      any action, suit or proceeding arising out of or relating to this Agreement.
      

     

    14.4.  If
      any
      term or provision of this Agreement or the application thereof to any person
      or
      circumstance shall to any extent be invalid or unenforceable, the remainder
      of
      this Agreement, or the application of such term or provision to persons or
      circumstances other than those as to which it is invalid or unenforceable,
      shall
      not be affected thereby, and each term and provision of this Agreement shall
      be
      valid and be enforced as written to the fullest extent permitted by
      law..
      

     

    14.5.  Client
      and Barretto hereby waive any right they may have to a trial by jury in respect
      of any claim brought by or on behalf of either party based upon, arising out
      or
      in connection with this Agreement.

     

    14.6.  If
      suit
      is brought to enforce this Agreement (including its Exhibits), the prevailing
      party shall be entitled to recover its reasonable attorneys fees and costs,
      as
      well as court costs, in addition to any other amounts to which it may be
      entitled.

     

    15.  Additional
      Parties.
      Client
      agrees to cause any affiliate, including a newly formed affiliate, which may
      become involved in a Transaction, and any successor, to execute appropriate
      documentation binding it to the terms of this Agreement.

    


    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    If
      the
      foregoing correctly sets forth our understanding, please indicate by initialing
      each page, signing below and returning an executed copy to me.

    


    


    Very
      truly yours,

    


    Barretto
      Securities Inc.

    


    


    


    
      
        By:_______________________________________________

      

    

    Landon
      Barretto, President

    


    


    Agreed
      and Accepted:

    


    Flexible
      Solutions International

    


    


    By:
      _________________________________________________

    Dan
      O’Brien, President & CEO

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    Flexible
      Agree with Barretto 5-25-07

    


    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Exhibit
      A: Compensation

    


    N/A
      Retainer
      Fee; Additional Expense Reimbursements.
      A
      non-refundable Retainer Fee of $______________ will be paid at the time Client
      executes this Agreement. The Retainer Fee will compensate Barretto for certain
      of its expenses to be incurred in connection with performing its duties under
      this Agreement (including, without limit, travel, administrative, third-party
      expenses, and fees and disbursements of third-party professional service
      providers (collectively, “Expenses”))
      regardless of whether a Transaction occurs. If Barretto’s Expenses exceed the
      Retainer Fee, Barretto may, from time to time, invoice Client the entire amount
      of such excess and Client will promptly reimburse Barretto for such amounts.
      In
      any event, upon completion of a Transaction or upon the earlier termination
      of
      the Agreement to which this Exhibit is annexed, Client will promptly pay any
      and
      all unreimbursed Expenses that Barretto has paid or accrued as of such date.
      

    


    Placement
      Fee. At
      the
      time of closing a Transaction, Client shall pay Barretto a fee payable in US
      dollars (the “Placement
      Fee”)
      equal
      to six percent (6%) of the “Aggregate Value” (as defined below) of the
      Transaction and a warrant for shares equal to 6.5 % of the common shares issued
      in the Transaction or to be issued upon the conversion of a preferred or debt
      instrument into common shares. “Aggregate
      Value”
shall
      mean the total value of all consideration (including cash, securities, or other
      property or assets of any kind) paid to or received by or to be paid to or
      received by Client in connection with a Transaction initiated by Barretto
      (including any series or combination of transactions).

    


    If
      any
      portion of the Aggregate Value is payable in the form of securities, the value
      of such securities, for purposes of calculating Barretto’s Placement Fee, will
      be the average closing price for such securities for the 20 trading days prior
      to the closing of the Transaction. In the case of securities that do not have
      an
      existing public market, the Placement Fee will be determined based on the fair
      market value of such securities as mutually agreed upon in good faith by Client
      and Barretto prior to the closing of the Transaction.

    


    The
      Placement Fee shall be paid in cash to Barretto simultaneously with the
      realization of Aggregate Value at closing. Any portion of the Placement Fee
      relating to amounts paid into escrow shall be payable, in full, upon the funding
      of such escrow. 

    


    Method
      of Payment.
      [The
      Retainer Fee N/A],
      Placement Fee and [additional expense reimbursements N/A]
      shall
      be paid to Barretto by wire transfer of immediately available funds in
      accordance with the following instructions, or such other written payment
      instructions as Barretto may deliver to Client from time to time:

    


    Barretto
      Securities Inc.

    HSBC
      Bank
      USA

    Account
      No: 773975985

    ABA
      No:
      021001088

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Exhibit
      B: Indemnification

    


    Flexible
      Solutions International agrees to indemnify and hold harmless Barretto and
      its
      affiliates and their respective directors, officers, employees, agents and
      controlling persons (each such person, including Barretto, an “Indemnified
      Party”)
      from
      and against any losses, claims, damages and liabilities, joint or several
      (collectively, the “Damages”),
      to
      which such Indemnified Party may become subject in connection with or otherwise
      relating to or arising from any transaction contemplated by the Agreement to
      which this Exhibit is annexed or the engagement of or performance of services
      by
      an Indemnified Party thereunder (including, without limit, any claim relating
      to
      an untrue statement (or alleged untrue statement) in the Materials, or any
      claim
      relating to an omission (or alleged omission) in the Materials of a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading),
      and
      will reimburse each Indemnified Party for all fees and expenses (including
      the
      fees and expenses of counsel) (collectively, “Expenses”)
      as
      incurred in connection with investigating, preparing, pursuing or defending
      or
      assisting in the defense of any threatened or pending claim, action, suit,
      proceeding or investigation (collectively, the “Proceedings”)
      arising therefrom, whether or not such Indemnified Party is a formal party
      to
      such Proceeding and whether or not such Proceeding is initiated or brought
      by
      Client; provided,
      that
      Client will not be liable to any such Indemnified Party to the extent that
      any
      Damages are found in a final non-appealable judgment by a court of competent
      jurisdiction to have resulted from the gross negligence, willful misconduct
      or
      intentional violation of law of the Indemnified Party seeking indemnification
      hereunder. Client also agrees that no Indemnified Party will have any liability
      (whether direct or indirect, in contract, tort or otherwise) to Client or any
      of
      its affiliates, security holders or creditors or any person asserting claims
      on
      behalf of Client arising out of or in connection with any transactions
      contemplated by the Agreement or the engagement of or performance of services
      by
      any Indemnified Party thereunder except to the extent that any Damages are
      found
      in a final non-appealable judgment by a court of competent jurisdiction to
      have
      resulted from the gross negligence, willful misconduct or intentional violation
      of law of the Indemnified Party. Client also agrees to reimburse each
      Indemnified Party for all Expenses as they are incurred in connection with
      enforcing such Indemnified Party’s rights under the Agreement (including,
      without limitation, its rights under this Exhibit
      B).

    


    If
      for
      any reason other than as expressly provided above, the foregoing indemnity
      is
      unavailable to an Indemnified Party or insufficient to hold an Indemnified
      Party
      harmless, then Client will contribute to the amount paid or payable by an
      Indemnified Party as a result of such Damages (including all Expenses incurred)
      in such proportion as is appropriate to reflect the relative benefits to Client
      on the one hand, and Barretto on the other hand, in connection with the matters
      covered by the Agreement or, if the foregoing allocation is not permitted by
      applicable law, not only such relative benefits but also the relative faults
      of
      such parties as well as any relevant equitable considerations. Client agrees
      that for purposes of this paragraph the relative benefits to Client and Barretto
      in connection with the matters covered by the Agreement will be deemed to be
      in
      the same proportion that the total value paid or received or to be paid or
      received by Client in connection with the transactions contemplated by the
      Agreement, whether or not 

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    consummated,
      bears to the fees paid to Barretto under the Agreement; provided,
      that in
      no event will the total contribution of all Indemnified Parties to all such
      Damages exceed the amount of fees actually received and retained by Barretto
      hereunder (excluding any amounts received by Barretto as a nonrefundable Expense
      Advance or as additional reimbursement of Third Party Expenses).

    


    Promptly
      after receipt by the Indemnified Party of notice or commencement of Proceedings
      in respect of which indemnity may be sought, the Indemnified Party will notify
      Client in writing of the receipt or commencement thereof; provided,
      that
      the failure so to notify the Client will not relieve Client from any liability
      which the Client may have on account of this indemnity or otherwise, except
      to
      the extent the Client will have suffered actual material prejudice as a result
      of such failure. With respect to any such Proceeding brought by a third party,
      Client will be entitled to assume the defense of such Proceeding with counsel
      reasonably satisfactory to the Indemnified Party. Upon assumption by Client
      of
      the defense of any such Proceeding, the Indemnified Party will have the right
      to
      participate in such defense and employ separate counsel but Client will not
      be
      responsible for any fees and expenses of other counsel subsequently incurred
      by
      the Indemnified Party in connection with the defense thereof, unless (i) Client
      has agreed to pay such fees and expenses, (ii) Client has failed to employ
      counsel reasonably satisfactory to the Indemnified Party in a timely manner,
      or
      (iii) the Indemnified Party has been advised by its own counsel that there
      exists actual or potential conflicting interests between Client and the
      Indemnified Party, including the availability of one or more legal defenses
      which are different from or in addition to those available to Client. In any
      event, Client will not, in connection with any such Proceeding or separate
      but
      substantially similar or related Proceedings in the same jurisdiction arising
      out of the same general allegations or circumstances, be liable for the fees
      and
      expenses of more than one separate firm of attorneys (in addition to local
      counsel) for all the Indemnified Parties unless the defense of one Indemnified
      Party is unique or separate from that of another Indemnified Party subject
      to
      the same claim or action.

    


    Client
      agrees not to enter into any waiver, release, settlement or compromise of any
      Proceeding (whether or not Barretto or any other Indemnified Party is a formal
      party to such Proceeding) in respect of which indemnification may be sought
      hereunder without the prior written consent of Barretto, unless such waiver,
      release, settlement or compromise includes an unconditional release of Barretto
      and each Indemnified Party from all liability arising out or such
      Proceeding.

    


    Prior
      to
      entering into any agreement or arrangement with respect to, or effecting, any
      proposed sale, exchange, dividend or other distribution or liquidation of all
      or
      a significant portion of its assets in one or a series of transactions or any
      significant recapitalization or reclassification of its outstanding securities,
      in any case where such agreement or arrangement fails to provide for the
      assumption, directly or indirectly, of Client’s obligations under this
Exhibit
      B,
      Client
      will notify Barretto in writing thereof (if not previously so notified) and,
      if
      requested by Barretto, shall arrange in connection therewith alternative means
      of providing for the obligations of Client set forth in this Exhibit
      B.

    


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    The
      indemnity, reimbursement and contribution obligations of Client hereunder will
      be in addition to any liability which Client may otherwise have to any
      Indemnified Party and will be binding upon and inure to the benefit of any
      successors, assigns, heirs and personal representatives of Client or any
      Indemnified Party. The provisions of this Exhibit
      B
      will
      survive the modification, termination or expiration of the Agreement or
      completion of Barretto’s services thereunder.

    


    Accepted
      and Agreed 

    


    Flexible
      Solutions International

    


    


    


    By:
      ______________________________

    Dan
      O’Brien, President & CEO 

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    Flexible
      Agree with Barretto 5-25-07

    


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    Warrant
      to Purchase Common Stock
      

    


    1. Introduction.
      Agreement made May 4th
      2007,
      between Flexible Solutions International Inc., with offices at 615 Discovery
      St., Victoria, British Columbia V8T 5G4 (the “Company”), and Barretto
      Securities
      (Grantee”).

    


    2. Grant
      of Warrant.
      The
      Company grants to Grantee this warrant to purchase shares of the Company’s
      common stock (the “Shares”) in the amounts, at the price, and subject to all the
      terms and conditions set out in this agreement.

    


    3. Grant
      Date of Warrant.
      The
      grant date of this warrant is May
      4th
      2007.

    


    4. Total
      Number of Warrants Available.
      The
      total number of Shares that may be purchased by Grantee pursuant to this
      Agreement is sixteen
      thousand one hundred fifty four (16,154) shares,
      as set forth in Paragraph 5.

    


    5. Warrant
      Price.
      The
      price at which Grantee may buy the Shares is four dollars fifty cents (US$4.50)
      per Share.

    


    6. When
      Warrant Exercisable:
      Grantee
      may exercise the warrant rights at any time after the grant date but not later
      than three years from the grant date.

    


    7. Warrant
      Not Transferable.
      Grantee’s warrant rights may be exercised only by the Grantee or Grantee’s
      personal representative during Grantee’s lifetime and are not transferable
      except by will or by the laws of descent and distribution should Grantee die
      intestate. The warrant rights may not be sold, assigned, pledged, or
      hypothecated, and any attempt to do so shall be void. The warrant rights are
      not
      subject to levy, attachment, or other process of law, and any attempt to levy,
      attach, or otherwise transfer the warrant rights or place liens upon them shall
      be void.

    


    8. Termination
      of the Warrant.
      Except
      as otherwise provided herein, this Agreement shall expire May
      3rd
      2010,
      three
      years from the date of grant (the “Warrant Period”).

    


    9. The
      Company’s Merger, Reorganization, Etc.
      If,
      during the warrant period but before Grantee has exercised all of the warrant
      rights with regard to the total number of Shares available for purchase by
      Grantee, the Sharers of the Company’s common stock are changed into or exchanged
      for a different number or different kind of shares or other securities, either
      the Company’s or those of another company, this Agreement shall remain in force.
      However, there shall be substituted for each of the Shares the number and kind
      of shares or other securities for which each Share of the Company’s common stock
      was exchanged or into which each Share was changed. The shares or securities
      substituted for each Share of the Company’s common stock may be purchased by
      Grantee under this Agreement for a price appropriately adjusted for the
      substituted securities.

    


    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    10. Declaration
      of Stock Dividends.
      If the
      Company issues a common stock dividend on the Company’s common stock, the number
      of Shares that may be purchased by Grantee thereafter shall be adjusted as
      follows: To each of the un-purchased Shares, there shall be added the number
      of
      Shares issued as a dividend on each Share of outstanding common stock; each
      of
      the Shares together with the additional Shares applicable to that Share shall
      be
      bought as one unit for the price set out for each of the Shares in Paragraph
      5.

    


    11. Other
      Changes in the Company’s Stock.
      If there
      area any changes in the number or kind of Shares outstanding that affect the
      Company’s common stock or the stock or other securities into which the Company’s
      common stock has been changed, other than those described in Paragraphs 10
      and
      11, a majority of the Company’s Board of Directors may make such changes in the
      Shares available for purchase under this Agreement as the Board of Directors
      deems appropriate. Any adjustment in the Shares available for purchase made
      in
      accordance with this Paragraph shall be binding upon Grantee.

    


    12. The
      Company’s Liquidation, Dissolution, Etc.
      If the
      Company liquidates or dissolves or enters into a merger or consolidation in
      which the Company is not the surviving company, the Company shall give Grantee
      at least one month’s notice prior to the liquidation, dissolution, merger, or
      consolidation. Grantee shall have the right to exercise this Warrant in full,
      to
      the extent that is had not been previously exercised, within the one-month
      period. To the extent that Grantee’s warrant rights have not been exercised on
      the effective date of the liquidation, dissolution, merger, or consolidation,
      they shall terminate.

    


    13. Manner
      in Which Warrant Is Exercised During Grantee’s
      Lifetime.
      Any of
      Grantee’s warrant rights may be exercised by Grantee or Grantee’s personal
      representative during Grantee’s lifetime by written notice addressed to the
      Company’s corporate Secretary, signed by Grantee or Grantee’s personal
      representative. The notice shall state the number of Shares to be purchased
      and
      shall be accompanied by a certified check payable to the Company for the
      purchase price of Shares purchased. Immediately following payment of the check,
      the Company shall issue a certificate or certificates for the Shares purchased
      in Grantee’s or Grantee’s personal representative’s name and deliver it or them
      to the person who signed the notice.

     

    14. Manner
      in Which Warrant Is Exercised After Grantee’s Death.
      If
      Grantee has not fully exercised the warrant rights before Grantee’s death, then
      the persons designated by Grantee in writing on file with the Company or, if
      no
      such persons have been designated, Grantee’s executor or administrator, may
      exercise any of Grantee’s warrant rights during the warrant period. The rights
      shall be exercised in the same manner as provided in Paragraph 14 except that
      the person entitled to exercise the rights shall be substituted for Grantee
      or
      Grantee’s personal representative.

    


    15. Cashless
      Exercise.
      The
      Warrant Holder may choose cashless exercise. The Holder must notify the Company
      in an Exercise Notice of its election to utilize cashless exercise, in which
      event the Company shall issue to the Holder the number of Warrant Shares
      determined as follows:

    X
      = Y
      [(A-B)/A]

     

    Where:
      X
      = the number of Warrant Shares to be issued to the Holder.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Y
      = the
      number of Warrant Shares with respect to which this Warrant is being
      exercised.

     

    A
      = the
      average of the closing prices for the five Trading Days immediately prior to
      (but not including) the Exercise Date.

     

    B
      = the
      Exercise Price.

     

    
      	l	
              For
                purposes of Rule 144 promulgated under the Securities Act, it is
                intended,
                understood and acknowledged that the Warrant Shares issued in a cashless
                exercise transaction shall be deemed to have been acquired by the
                Holder,
                and the holding period for the Warrant Shares shall be deemed to
                have
                commenced, on the date this Warrant was originally
                issued.

            


    

    


    16. Violation
      of Law.
      The
      warrant granted by this Agreement may not be exercised if its exercise would
      violate any applicable state securities law, any registration under or any
      requirements of the Securities Act of 1933, as amended, the Securities Exchange
      Act of 1934, as amended, the rules of an exchange on which the Shares are
      traded, any other federal law, or any law of applicable state securities
      laws.

    


    17. Unregistered
      Stock.
      If a
      registration statement for the Shares is not in effect or if Grantee’s attorneys
      require a writing from Grantee to avoid violation of the Securities Act of
      1933,
      as amended, the Company may require a written commitment form the person
      exercising the warrant before delivery of the certificate or certificates for
      the Shares. The Commitment shall be in a form prescribed by the Company. It
      will
      state that it is the intent of the person exercising the warrant to acquire
      the
      Shares for investment only and not the intent of transferring or reselling
      them;
      that the person exercising the warrant has been told that the Shares may be
      “restricted shares” pursuant to Rule 144 of the Securities and Exchange
      Commission and that any resale, transfer, or other distribution of the Shares
      may only be made on conformity with Rule 144, the Securities Act of 1933, as
      amended, or any other federal statute, rule or regulation. The Company may
      place
      a legend on the face of the certificate or certificates in accordance with
      this
      Commitment and may refuse to permit transfer of the Shares unless it receives
      satisfactory evidence that the transfer will not violate Rule 144, the
      Securities Act of 1933, as amended, or any other federal statute, rule, or
      regulation.

    
 

    
      	 	
              Flexible
                Solutions International Inc.

            
	 	 
	 	 
	 	
              ________________________________

            
	 	
              Dan
                O’Brien, CEO

            


    

    


    


    Flexible
      Warrant to Purch with Barretto 5-24-07

    
3