CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement ("Agreement") is made and entered as
of the 15th day of July, 2004 by and among Xxxxx Xxxxxxx (hereinafter referred
to collectively as "Consultant"), and GK Intelligent Systems, Inc., a Delaware
corporation ("Client").
Preliminary Statement
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Client desires to be assured of the association and services of
Consultant in order to avail itself of Consultant experience, skills,
abilities, knowledge and background to facilitate long-range strategic
planning and to advise Client in business and/or financial matters and desire
to retain Consultant on the terms and conditions set forth herein. Consultant
agree to be retained by the Client on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Engagement. Client hereby engages the services Consultant on a
non-exclusive basis, and Consultant hereby accept the engagement to become
Consultant to Client to render advice, consultation, information and services
to the directors and/or officers of Client regarding general business matters
including, but not limited to:
A. Mergers and acquisitions, due diligence studies, and
reorganizations;
B. Temporary and Permanent Staffing Industry, and
C. Information Technology industry trends and potential benefits
that could arise in Client's adoption of certain IT systems and
or procedures and
It is expressly understood that Consultant shall have no power to bind
Client to any contract or obligation or to transact any business in Client's
name or on behalf of Client in any manner.
2. Term. The term ("Term") of this Agreement shall commence on the
date hereof and continue for one (1) year.
3. Compensation and Fees. As consideration for Consultant entering
into this Agreement, Client and Consultant shall agree to the following:
Client shall take the five day average closing price for their common
stock immediately prior to the first day of this Agreement and divide that
number into $ 84,000. The result of this computation ("Maximum Yearly Shares")
is the maximum number of shares that Client would issue to Consultant over the
Term of this Agreement. The Maximum Yearly Shares would be issued to
Consultant each month in increments of 1/12th of the Maximum Yearly Shares
("Monthly Share Maximum") before the tenth of each month. However, to the
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extent that a planned issuance of the Monthly Share Maximum, when multiplied
by Client's closing price for its stock on the last trading day of the
preceding month, yields a dollar value in excess of $ 20,000, then the planned
Monthly Share Maximum number of shares shall be reduced to a number of shares
which when multiplied by the closing price of Client's common stock on the
last trading day of the preceding month equals $ 20,000. The Monthly Shares
are to be registered with the Securities and Exchange Commission using Form
S-8 or similar filing.
If for any reason Client terminates this Agreement, Client shall
immediately determine the sum ("Deficit"), if any, that remains to be paid to
Consultant against the original commitment of $ 84,000 and divide the Deficit
by the average closing bid price for the last five days of trading for the
previous month. The resulting number of shares (the "Deficit Shares") shall be
registered with the Securities and Exchange Commission using Form S-8 or
similar filing and issued to Consultant within ten (10) days of the date the
Consultant was terminated. The Deficit Shares, when issued to Consultant,
shall be duly authorized, validly issued and outstanding, fully paid and
nonassessable and will not be subject to any liens or encumbrances.
4. Exclusivity; Performance; Confidentiality. The services of
Consultant hereunder shall not be exclusive, and Consultant and their agents
may perform similar or different services for other persons or entities
whether or not they are competitors of Client. Consultant shall be required to
expend only such time as is necessary to service Client in a commercially
reasonable manner. Consultant acknowledges and agrees that confidential and
valuable information proprietary to Client and obtained during its engagement
by the Client, shall not be, directly or indirectly, disclosed without the
prior express written consent of the Client, unless and until such information
is otherwise known to the public generally or is not otherwise secret and
confidential.
5. Indemnification. The Client agrees to indemnify and hold harmless
Consultant against any and all liability, loss and costs, expenses or damages,
including but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or howsoever caused by reason
of any injury (whether to body, property, personal or business character or
reputation) sustained by any person or to any person or property, arising out
of any act, failure to act, neglect, any untrue or alleged untrue statement of
a material fact or failure to state a material fact which thereby makes a
statement false or misleading, or any breach of any material representation,
warranty or covenant by Client or any of its agents, employees, or other
representatives. Nothing herein is intended to nor shall it relieve either
party from liability for its own willful act, omission or negligence. All
remedies provided by law, or in equity shall be cumulative and not in the
alternative.
6. Expenses. Client shall reimburse Consultant for reasonable
expenses incurred in performing its duties pursuant to this Agreement
(including printing, postage, express mail, photo reproduction, travel,
lodging, and long distance telephone and facsimile charges); provided,
however, that Consultant has received prior written approval from the Client
before an expense was incurred for each expense that Consultant wishes to have
reimbursed by Client. Such reimbursement shall be payable within 7 seven days
after Client's receipt of Consultant's invoice for same.
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7. Independent Contractor. In his performance hereunder, Consultant
and his agents shall be an independent contractor. Consultant shall complete
the services required hereunder according to his own means and methods of
work, shall be in the exclusive charge and control of Consultant and which
shall not be subject to the control or supervision of Client, except as to the
results of the work. Client acknowledges that nothing in this Agreement shall
be construed to require Consultant to provide services to Client at any
specific time, or in any specific place or manner. Payments to Consultant
hereunder shall not be subject to withholding taxes or other employment taxes
as required with respect to compensation paid to an employee. It is further
understood and agreed that Consultant's compensation under this Agreement is
not for any capital raising or stock promotion or support.
8. Arbitration and Fees. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, may be resolved by mutual
agreement; or if not, shall be settled in accordance with the Arbitration
rules of the American Arbitration Association in Houston, Texas. Any decision
issued there from shall be binding upon the parties and shall be enforceable
as a judgment in any court of competent jurisdiction. The prevailing party in
such arbitration or other proceeding shall be entitled, in addition to such
other relief as many be granted, to a reasonable sum for attorneys' fees in
such arbitration or other proceeding which may be determined by the arbitrator
or other officer in such proceeding. If collection is required for any payment
not made when due, the creditor shall collect statutory interest and the cost
of collection, including reasonable attorneys' fees whether or not court
action is required for enforcement.
9. Miscellaneous. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
and no waiver shall constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver. No supplement,
modification, or amendment of this Agreement shall be binding unless executed
in writing by all parties. This Agreement constitutes the entire agreement
between the parties and supersedes any prior agreements or negotiations. There
are no third party beneficiaries of this Agreement. The terms of this
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Texas, without regard to its laws of conflicts.
( Signature Page Follows )
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first written above.
"Client"
Signature: /s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxxx, President and CEO
Company: GK Intelligent Systems, Inc.
"Consultant"
Signature: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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