EXHIBIT 10.19
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") is made effective as of the 29th
day of June, 2004, by and between INTEGRATED BUSINESS SYSTEMS AND SERVICES,
INC., a South Carolina corporation (the "Company") and FUSION CAPITAL PARTNERS,
LLC, an Illinois limited liability company ("Consultant").
WHEREAS, the Company is engaged in the business of developing and
deploying real time technology solutions for operating systems, data base
management systems, and transaction processing platforms (the "Business");
WHEREAS, Consultant has unique experience, knowledge and skills in order
to enhance the operation of the Business;
WHEREAS, the Company desires to obtain the benefits of Consultant's
experience and know-how in connection with the operation of the Business, and
accordingly, the Company has offered to engage Consultant to render consulting
and advisory services to the Company on the terms and conditions hereinafter set
forth;
WHEREAS, Consultant desires to accept such engagement upon such terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Consultant agree
as follows:
1. Consulting Terms and Duties. Upon the terms and conditions set forth herein,
the Company hereby retains and engages Consultant as an independent contractor,
and Consultant hereby accepts such retention and engagement as an independent
contractor, and agrees to render such advisory and consulting services to the
Company with respect to matters pertaining to the Business as shall be specified
from time to time by the Company's President and/or such other officer(s) as the
Company's Board of Directors shall designate to have principal responsibility
for the operation of the Business.
2. Term. The term of this Agreement shall be for 12 calendar months from the
date hereof (the "Term"), provided, however, that (i) the Company may terminate
this agreement at any time prior to the expiration of the Term after the Company
is "cash flow positive" on an operating basis for three consecutive calendar
months commencing as of July 1, 2004, as reflected in the "Operating Activities"
of the Statements of Cash Flows contained in the Company's quarterly and annual
reports as filed with the Securities and Exchange Commission, and (ii) the
Consultant may terminate this Agreement at any time.
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3. Services and Compensation.
(a) Services. Consultant shall (i) advise the Company with respect to
operations, executive employment issues, employee staffing, strategy, capital
structure and other matters pertaining to the Business as shall be specified
from time to time by the Company's President and/or such other officer(s) as the
Company's Board of Directors shall designate to have principal responsibility
for the operation of the Business and (ii) assist in reviewing and negotiating
certain transactions.
(b) Consulting Fees. In consideration for services previously provided and
the availability of Consultant during the term hereunder and the services to be
rendered pursuant to this Agreement, immediately upon the execution of this
Agreement, the Company will issue to Consultant or its designee as payment
252,000 fully paid and non-assessable shares of Common Stock of the Company (the
"Shares"). The Shares shall be issued in certificated form and shall bear the
following restrictive legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF HOLDER'S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."
The Shares shall be earned by Consultant in equal amounts of 21,000 shares
during each month or portion thereof during the Term of this Agreement.
Immediately upon the execution of this Agreement, the Company shall deliver to
its transfer agent a letter in the form as set forth as Exhibit A attached
hereto with respect to the issuance of the 252,000 Shares. In the event the
Agreement is terminated in accordance with Section 2 hereof, Consultant shall
promptly return to the Company any unearned portion of the Shares.
(c) Reimbursement of Expenses. The Company shall reimburse Consultant for
those reasonable and necessary out-of-pocket expenses which have been approved
by the President of the Company prior to their incurrence and which have been
incurred by
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Consultant in connection with the rendering of services hereunder. Any
reimbursement to be made by the Company pursuant to this Section 3(c) shall be
made following prior submission to the Company by Consultant of reasonable
documentation of the expenses incurred.
(d) Registration. Consultant is hereby granted customary piggyback
registration rights with respect to the Shares.
4. Nondisclosure.
4.1 Nondisclosure of Confidential Information.
(a) Consultant recognizes and acknowledges that certain knowledge and
information which it has acquired or developed relating to the Business,
including its pricing and quotation techniques, costs, developments, activities
or products of the Business or the business affairs of any Person doing business
with the Company, such as, but not limited to, customer and vendor lists, cost
and selling and service prices for specific customers, customers' needs and
requirements, and all inventions, ideas, know how, discoveries, creations,
developments, improvements, designs, patents and processes so acquired
(hereinafter collectively referred to as "Confidential Information") are the
valuable property of the Company and shall be held by Consultant in confidence
and trust for the sole benefit of the Company.
(b) Consultant agrees not to use, disclose, divulge or publish, without
the prior written consent of the Company, at any time during the term hereof or
thereafter for a period of not less than two (2) years following completion of
the Term, any Confidential Information. Provided, however, that Confidential
Information shall not include (a) information which is known to the public or is
generally known within the industry of businesses comparable to the Business
(other than as a result of Consultant's violation of this covenant) or (b)
information which Consultant is required to disclose pursuant to law or order of
a court having jurisdiction over Consultant (provided that Consultant offers the
Company an opportunity to obtain an appropriate protective order or
administrative relief against disclosure of such Confidential Information).
4.2 Property of the Business. All memoranda, notes, lists, records and other
documents or papers (and all copies thereof), including such items stored in
computer memories, or microfiche or by any other means, made or compiled by or
on behalf of Consultant in connection with the rendering by Consultant of
consulting services hereunder, or made available by the Company to Consultant
relating to the Business of the Company, are and shall be the Company's property
and shall be delivered to the Company promptly on the request of the Company.
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4.3 Rights and Remedies Upon Breach. If Consultant breaches, or threatens to
commit a breach of, any of the provisions of Section 4.1 or 4.2 (the
"Nondisclosure Covenants"), the Company shall have the right and remedy to have
the Nondisclosure Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Nondisclosure Covenants would cause irreparable injury to the Company and that
money damages would not provide an adequate remedy to the Company. The Company
shall also have any other rights and remedies available to it under law or in
equity.
4.4 Severability of Covenants. Consultant acknowledges and agrees that the
Nondisclosure Covenants are reasonable and valid in scope and in all other
respects. If any court determines that any of the Nondisclosure Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the
Nondisclosure Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
5. Miscellaneous.
(a) Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission (with a copy also sent by another means herein provided
for), sent by certified, registered or express mail, postage prepaid or sent by
reputable air courier. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission (with issuance by the transmitting
machine of a confirmation of successful transmission) or, if mailed, five days
after the date of deposit in the United States mail or, if sent by courier, two
days after the date of deposit with much courier, addressed as follows:
(i) if to the Company, to:
Integrated Business Systems and Services, Inc.
0000 Xxxx Xxxx, Xxxxx X
Xxxxxxxx, Xxxxx Xxxxxxxx 00000 Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
(ii) if to Consultant, to:
Fusion Capital Partners, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
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Any party may change its address for notice hereunder by notice to the other
party hereto given in accordance herewith.
(b) Assignability. This Agreement shall not be assignable by either party
hereto without the prior written consent of the other party, and any such
purported assignment shall be void ab initio.
(c) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Illinois, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Illinois or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Chicago, for the adjudication of any dispute hereunder or under the
other Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(d) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
executors, administrators, successors and permitted assigns.
(e) Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(f) Entire Agreement. This Agreement represents the entire agreement and
understanding of the parties hereto with respect to the matters set forth
herein. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between parties,
written or oral, relating to the subject matter of this Agreement. This
Agreement may be amended, superseded,
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cancelled, renewed, or extended and the terms hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
the party waiving compliance.
(g) Waivers. No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof. Nor shall any waiver
on the part of any party of any such right, power or privilege hereunder, nor
any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
(h) Headings. The headings in this Agreement are inserted for convenience
only and are not to be considered in the interpretation or construction of the
provisions hereof.
(i) Definitions of "Person". As used herein, the term "Person" shall mean any
individual, corporation, partnership, limited liability company, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
governmental or regulatory body or any political subdivision thereof.
* * * * *
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IN WITNESS WHEREOF, the Company and Consultant have signed this Agreement
as of the day and year written above.
COMPANY:
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Its: Chief Executive Officer
CONSULTANT:
FUSION CAPITAL PARTNERS, LLC
BY: ROCKLEDGE CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxxx
Title: President
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EXHIBIT A
FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE
SHARES AT SIGNING OF THE CONSULTING AGREEMENT
[COMPANY LETTERHEAD]
June 29, 2004
Pacific Corporate Trust Company
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, X.X. X0X 0X0
Re: Issuance of 252,000 Common Shares to Fusion Capital Fund II, LLC
Dear _______,
On behalf of INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC., (the "Company"),
you are hereby instructed to issue AS SOON AS POSSIBLE 252,000 shares of our
common stock in the name of FUSION CAPITAL FUND II, LLC. The share certificate
should be dated June 29, 2004. I have included a true and correct copy of a
unanimous written consent executed by all of the members of the Board of
Directors of the Company adopting resolutions approving the issuance of these
shares. The shares should be issued subject to the following restrictive legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
OR AN OPINION OF BUYER'S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."
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The share certificate should be sent AS SOON AS POSSIBLE VIA OVERNIGHT MAIL to
the following address:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Thank you very much for your help. Please call me at [Company Number] if you
have any questions or need anything further.
INTEGRATED BUSINESS SYSTEMS AND SERVICES, INC.
BY:_____________________________
[name]
[title]
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