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EXHIBIT 10.25
FINANCIAL PROJECT MANAGEMENT AGREEMENT
This Financial Project Management Agreement (the "Agreement"),
dated this 20th day of January, 2000, and effective as of November 15, 1999, is
entered into by and between EQUINET, INC., a New York corporation (the "Project
Manager"), and ibiz Technology Corp., a Florida corporation (the "Company"). The
Project Manager and the Company may each be referred to as a "Party" and
together the Project Manager and the Company may be referred to as the
"Parties."
WHEREAS, Company desires to increase its shareholder value and
growth through increased capitalization or a business combination; and
WHEREAS, after reviewing the Company's business plan with
management, Project Manager is sufficiently confident that management's
objectives can be achieved;
NOW THEREFORE, in consideration of the premises and covenants
contained herein, the Parties hereto agree as follows:
1) Responsibilities of Project Manager. Project Manager agrees
to implement a program to promote the growth of, or increase the shareholder
value of the Company (the "Program"). It is understood that this Program may
involve the Company seeking third-party equity funding (the "Funding"), or
possible business combination or joint venture (the "Transaction") (collectively
the "Corporate Goal"). The Project Manager shall provide the Company with its
opinion and recommendations with respect to the most appropriate means of
meeting the Corporate Goal, however, the implementation of such recommendations
and the acceptance of the Funding and the consummation of any Transaction shall
be at the sole and exclusive option of the Board of Directors of the Company.
a) Analysis and Review. Project Manager agrees to
provide the following services, and such other related services as may
be appropriate and required to assist in the Company's efforts to meet
the Corporate Goal:
i) Conduct summary due diligence and
analysis of the Company's operation and financial status to
ascertain the legality and feasibility of the Program (the
"Recommendation"). Such analysis shall include a critical
evaluation of the Information, financial projections and
documents delivered to the Project Manager by the Company
prior to implementation of the Program, and;
ii) Provide the Company with a formal
recommendation for implementation of the Program.
b) Program Implementation. Upon receipt of formal
approval and written authorization from the Company to proceed with the
Program ("Program Authorization"), Project Manager shall:
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i) Advise the Company with respect to the
form and structure of the Program;
ii) Advise the Company with respect to
professional assistance that may be necessary and desirable
for the implementation of the Program;
iii) Advise the Company with respect to
methods of generating public awareness of its business and
products and to heighten investor awareness of the Company;
iv) Advise the Company with respect to
certain corporate partners who may be of strategic importance
in the further development of the Company's business;
v) Advise the Company with respect to
personnel who may be of strategic importance in the further
development of the Company's business;
vi) Identify and introduce the Company to
institutional and other investors who may contribute all or a
portion of the Funding or identify potential candidates for
the Transaction; and
vii) Assist the Company wherever possible
with the implementation of each of the above-enumerated steps.
2) Responsibilities of the Company. In connection with the
above activities, which will be undertaken by Project Manager on the Company's
behalf, the Company shall fully cooperate with the Project Manager in the
fulfillment of its duties hereunder, and agrees to the following until such time
as a Termination Date has been set:
a) Project Manager Introductions. Any investment in
the Company from the time of engagement until its expiration will be
considered as a result of the work done by the Project Manager if
Project Manager first introduced the investors to the Company.
b) Access to Information. Furnish all information and
data concerning the Company, the transaction, any prior transactions
and the Funding (collectively the "Information"), which the Project
Manager may request.
c) Access to Company Officers and Professionals.
Company will provide the Project Manager complete access to the
Company's officers, directors, employees, accountants, counsel and
other key persons.
d) Truthful Representations. The Company represents
and warrants that all information (i) made available to the Project
Manager and any prospective financing source, or (ii) contained in any
materials prepared by the Company will, at all times during this
engagement be true, accurate and complete in all material respects and
will not contain any untrue statement of a material fact or omit to
state therein any fact necessary to make the statements therein not
misleading in light of the circumstances under which they are made. The
Company further represents that any projections provided to the Project
Manager or contained in any materials prepared by or on behalf of the
Company with respect to the subject matter thereof will have been
prepared in good
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faith and will be based on assumptions which in light of the
circumstances under which they are made at that time were in Company's
determination reasonable.
e) Responsibility for Representations. The Company
acknowledges and agrees that in rendering its services as agreed
hereunder, the Project Manager will be using and relying on the
Information (and information available from public sources and other
sources deemed to be reliable) without independent verification thereof
and without independent appraisal of any of the Company's assets. The
Project Manager does not assume responsibility for the accuracy or
completeness of the Information or any other information regarding the
Company the financing the transaction or the Investment Funds. Any
advice rendered by the Project Manager pursuant to this agreement may
not be disclosed privately or publicly by the Project Manager without
the Company's prior written consent.
f) Indemnification of Project Manager. If, in
connection with the services or matters that are the subject of this
Agreement, the Project Manager becomes involved in any capacity in any
action or legal proceeding, due to the actions, information, position,
assertions, or affirmations put forth by the Company or by the Project
Manager at the direction of the Company or in reliance upon material or
the Information furnished by the Company, the Company agrees to
indemnify and hold harmless the Project Manager as the case may be for
the reasonable legal fees of counsel, court costs and other expenses
(including the costs of investigation and preparation) incurred. The
Company also agrees to hold harmless the Project Manager against any
losses, claims, damages or liabilities, joint services or matters which
are the subject of this Agreement; provided however that the Company
shall not be liable in respect of any loss, claim damages or liability
to the extent and only to the extent that such loss claim damage or
liability resulted from the gross negligence or willful misconduct of
the Project Manager. The provisions of this paragraph shall survive the
expiration of the period of this agreement including any extensions
their of set forth herein.
g) Implementation of Program. In the event that
Company provides Program Authorization to Project Manager, Company
agrees to:
i) Allocate the services of its Chief
Executive Officer and Chief Financial Officer, and engage such
other outside professionals as are required to the
successfully implement and complete each task associated with
the Program, pursuant to the Project Manager's recommendation,
unless modified in writing by the mutual consent of the
Parties; and
ii) Issue such compensation as is required
by Project Manager and such other outside professionals as
engaged pursuant to this Agreement, so as to cause timely
implementation of the Program pursuant to the Project
Manager's recommendation, unless modified in writing by the
mutual consent of the Parties.
3) Compensation. In consideration for the services that are to
be provided by Project Manager under this Agreement, the Company agrees to
compensate the Project Manager as follows:
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a) Analysis and Review Services. Customer will pay to
the Project Manager a non-refundable engagement fee of Zero Dollars
($0) payable upon the execution of this Agreement, and Zero Dollars
($0) payable upon presentation of the Recommendations to the Company by
Project Manager.
b) Program Implementation: Funding Scenario. In the
event that the Program entails Funding originating from investors first
introduced by Project Manager, and upon receipt and acceptance of the
Funding by Company, and concurrent to all other closing fees, the
Company shall pay the Project Manager a fee described in the tables
below:
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Amount of Funding Fee rate Maximum fee
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Up to $2,100,000 10% $210,000
$2,100,001 to $5,000,000 6% $300,000
$5,000,001 to $20,000,000 5% $1,000,000
$20,000,001 to $50,000,000 3% $1,500,000
Above $50,000,000 1% N/A
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c) [Reserved].
d) Consultation. For a period of 6 months from the
date of this Agreement or until completion of the Program, whichever
occurs first, Project Manager shall be entitled to a cash fee of $3,500
per month. Such fees shall be payable upon execution of this Agreement,
and shall be payable on the first of each month thereafter. The Company
may accrue monthly payments until the closing of the financing
following the signing of this agreement, which for the purpose of
computing accrued payments shall be deemed to be December 1, 1999 (the
"Inaugural Date").
e) Stock in Lieu of Cash Compensation. In the sole
discretion of the Company, the Company may elect to compensate the
Project Manager in common stock of the Company, which the Project
Manager hereby agrees to accept. If the common stock of the Company at
the time of compensation is "restricted" (as that term is defined in
the Securities Act of 1933), then the Company shall issue that number
of shares having a value equal to twice the value of cash compensation
then due; and if the common stock of the Company at the time of
compensation is "registered" (as that term is defined in the Securities
Act of 1933), then the Company shall issue that number of shares having
a value equal to the value of cash compensation then due. The value of
the stock at the time of compensation shall be the average closing
price shown on the electronic bulletin board or other public trading
forum for the immediately preceding ten (10) business days (referred to
herein as "Calculated Valuation Price").
f) Expenses. The Company shall reimburse Project
Manager for all reasonable and customary out-of-pocket expenses
incurred in connection with the provision of services pursuant to the
terms of this Agreement; provided however, that no expense in excess of
One Hundred Fifty Dollars ($150) will be incurred without the Company's
prior approval, in which case and to the extent practicable, such
expenses shall be paid in advance. These expenses include but are not
limited to all printing,
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telephone, mailing, reproduction, word processing, travel (including
air travel), and lodging expenses. Such fees shall be calculated and
reimbursed on a monthly basis.
g) Warrant Grants. In connection with first
$5,000,000 of Funding raised by the Project Manager, the Company shall
grant to the Project Manager warrants to purchase three (3) shares of
the Company's common stock for each Twenty Dollars ($20) of Funding
raised, up to a maximum of 750,000 shares. The Company shall issue the
warrants to the Project Manager concurrently with the closing of each
Funding. By way of example, concurrent with the closing of Funding in
the amount of $500,000, the Company shall issue warrants to purchase
75,000 shares to the Project Manager. The exercise price of the
warrants shall be the Calculated Valuation Price as of the date of
closing of the Funding. The warrants shall have a term of five (5)
years and the common stock underlying the warrants shall have piggyback
registration rights on the first available registration statement
appropriate for the registration of the underlying common stock filed
after January 31, 2000. The Company shall not be required to issue
warrants to purchase fractional shares of common stock. As to any
warrant to purchase a fraction of a share to which the Project Manager
would otherwise be entitled, the Company shall pay a cash adjustment in
respect to such final fraction in an amount equal to the same fraction
of the Calculated Valuation Price per share of common stock on the date
of issuance of the warrant. The number of warrants issuable to the
Project Manager as of the date of this Agreement are listed on Schedule
A attached hereto. When appropriate, public statements issued by the
Company shall identify the Project Manager by name and state that: (i)
the Company is public; and (ii) the Company has been assisted by the
Project Manager in its transition from private to public ownership.
4) Confidentiality. Except to the extent necessary to perform
its obligations hereunder or to comply with any applicable law, regulation or
rule, neither Party shall disclose or divulge to any third party other than the
other Party's directors, officers, auditor, or legal project managers, either
before or after the termination of this letter agreement, any document or
information exchanged between the Parties during the term of this Agreement
without prior written consent of the other party, which consent shall not
unreasonably withheld.
5) Use of Advice and Recommendations. Neither the
Recommendations or any advice, whether oral or in writing, and no other material
prepared for Company in connection with the Project Manager' services hereunder
is to be used for any purpose other than the purpose for which such report,
advice or material was prepared, or is to be used or referred to by Company in
any public documents or otherwise publicly referred to without the Project
Manager' written consent. Notwithstanding the foregoing sentence, in the event
that Company receives a request to disclose all or any part of the Information
contained in any such report, advice or material under the terms of a valid and
effective subpoena or order issued by a court of competent jurisdiction, Company
may disclose such information provided that Company notifies the Project Manager
of the existence, terms and circumstances surrounding such request.
6) Non-Circumvention. The Company hereby irrevocably agree not
to circumvent, avoid or bypass the Project Manager, either directly or
indirectly, in order to avoid payments of fees or commissions, or otherwise
benefit, either financially or otherwise, from information supplied to it or
individuals and or business entities introduced to it by the Project
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Manager with regard to any financial transaction, sale of securities, business
combination or joint venture under discussion, in that the Company will not
contact persons or entities on the acknowledged Contact List. The "Contact List"
is a list of persons or entities that the Project Manager will present to the
Company on a monthly basis listing those persons with whom the Project Manager
has negotiated on behalf of the Company, which list will be effective to limit
the Company when acknowledged by the Company, which acknowledgement shall not be
unreasonably withheld. The spirit of mutual trust and confidence shall be the
underlying principle of this undertaking and the Parties agree to adhere
thereto.
7) Termination. Unless otherwise agreed in writing or
terminated earlier pursuant to this Section 7, this Agreement will terminate six
(6) months from the Inaugural Date (the "Expected Termination Date"). The
"Termination Date" shall be the earlier of: (i) the date set by the Parties
pursuant to this Section 7; or (ii) the Expected Termination Date.
a) Termination by Project Manager. It is hereby
agreed and understood that the Project Manager shall have the right to
interview the Company and accomplish a due diligence review with
respect to the Company's representations and that at the Project
Manager's sole discretion if such interviews and due diligence
demonstrate substantive and material discrepancies from that which was
put forth by the Company, then the Project Manager shall have the right
to terminate this agreement and be held harmless from any claims of the
Company for such termination as well as from any claims of third
parties which may result from any such discrepancy. In the event that
the Project Manager is unable to perform its responsibilities under
this agreement due to the failure of the Company to perform its
responsibilities hereunder the Project Manager shall be released from
its responsibilities under this agreement and shall accept the
compensation then due and owing in full satisfaction of Project
Manager's claims against the Company.
b) Termination by Company. The Company may terminate
this agreement at any time after (i) the submission of the
Recommendations to the Company by the Project Manager and submission to
Project Manager of written notice to terminate by Company; (ii) the
Recommendations have not been successfully achieved after the period of
one hundred and twenty (120) days has elapsed from the date that
Program Authorization was submitted to the Project Manager; or (iii)
for cause. In the event that at time of such termination the Company
shall be in discussions with underwriters or investors or parties to
the Transaction that are introduced by the Project Managers, the
Project Manager will maintain the exclusive right to conclude the
Funding or the Transaction with any or all of such parties, under the
terms of this Agreement. In the event that the Company acquires the
Funding after terminating this agreement from any party, which has been
introduced to the Company by the Project Manager, the Company will pay
to the Project Manager the applicable fee or fees referenced in Section
3 hereof. In case of termination, except termination for cause, the
Project Manager will receive full reimbursement for the entire amount
of expenses incurred by Project Manager in connection with its services
pursuant to this Agreement.
c) Termination for Cause. For the purposes of this
engagement, notwithstanding anything to the contrary hereto, "Cause"
shall mean (i) misrepresentation
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of a material fact in connection with the duties to be preformed by the
Project Manager; (ii) continuing inattention to or neglect of the
duties to be preformed by the Project Manager which remains unremedied
for fifteen business days following written notice by certified mail
from Company to the Project Manager; (iii) an adjudication in a civil
or criminal proceeding or an arbitral decision that the Project
Manager, or any of its officers or directors, has committed a fraud or
felony; (iv) a breach of this Agreement by the Project Manager; or (v)
gross negligence or willful misconduct by the Project Manager. If the
Company terminates this Agreement for Cause, the Project Manager will
not be entitled to any further fees of any character from the Company
under any circumstances.
8) Securities Laws. The Parties to this agreement mutually
agree to comply with any and all applicable securities laws in their efforts to
secure funds for the Company.
9) Miscellaneous Provisions.
a) Notices. All notices, requests, demands and other
communications to be given hereunder shall be in writing and shall be
deemed to have been duly given on the date of personal service or
transmission by fax if such transmission is received during the normal
business hours of the addressee, or on the first business day after
sending the same by overnight courier service or by telegram, or on the
third business day after mailing the same by first class mail, or on
the day of receipt if sent by certified or registered mail, addressed
as set forth below, or at such other address as any Party may hereafter
indicate by notice delivered as set forth in this Section 9(a):
If to the Project Manager: EQUINET, INC.
305 W. 50th Street, Suite 2
New York, New York 10019
Attention: Gregg Davis
If to the Company: IBIZ TECHNOLOGY CORP.
1919 West Lone Cactus
Phoenix, Arizona 85021
Attention: Kenneth Schilling
b) Binding Agreement; Assignment. This Agreement
shall constitute the binding agreement of the Parties hereto,
enforceable against each of them in accordance with its terms. This
Agreement may not be assigned except by the express written consent of
the Company.
c) Entire Agreement. This Agreement constitutes the
entire and final agreement and understanding between the Parties with
respect to the subject matter hereof and the transactions contemplated
hereby, and supersedes any and all prior oral or written agreements,
statements, representations, warranties or understandings between the
Parties, all of which are merged herein and superseded hereby.
Notwithstanding the foregoing, the Company and the Project Manager
agree and acknowledge that the transactions contemplated by this
Agreement shall be subject to the terms of those certain
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Securities Purchase Agreements dated November 9, 1999 and December 29,
1999, and their respective related agreements, between the Company and
Globe United Holdings, Inc.
d) Waiver. No waiver of any provision of this
Agreement shall be deemed to be or shall constitute a waiver of any
other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the Party making the waiver.
e) Headings. The headings provided herein are for
convenience only and shall have no force or effect upon the
construction or interpretation of any provision hereof.
f) Counterparts. This Agreement may be executed 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.
g) Further Documents and Acts. Each Party agrees to
execute such other and further documents and to perform such other and
further acts as may be reasonably necessary to carry out the purposes
and provisions of this Agreement.
h) Governing Law; Venue. THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION ENFORCEMENT thereof, SHALL BE INTERPRETED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE CONFLICT OF LAWS RULES)
OF THE STATE OF ARIZONA GOVERNING CONTRACTS TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE. PROJECT MANAGER HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF
MARICOPA IN THE STATE OF ARIZONA OR, AT THE SOLE OPTION OF THE COMPANY,
IN ANY OTHER COURT IN WHICH THE COMPANY SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. PROJECT MANAGER WAIVES ANY OBJECTION OF
FORUM NON CONVENIENS AND VENUE. PROJECT MANAGER FURTHER WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY MESSENGER, CERTIFIED MAIL OR REGISTERED
MAIL DIRECTED TO PROJECT MANAGER AT THE ADDRESS SET FORTH BELOW ITS
SIGNATURE HERETO AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED TO PROJECT MANAGER'S ADDRESS. PROJECT MANAGER
FURTHER WAIVES ANY RIGHT IT MAY OTHERWISE HAVE TO COLLATERALLY ATTACK
ANY JUDGMENT ENTERED AGAINST IT.
i) Attorneys; Drafting. The Project Manager has not
retained any independent professionals to review or comment on this
Agreement or otherwise protect the interests of the Company. Each Party
further agrees and acknowledges that this Agreement represents the
respective understandings of such Parties as negotiated between
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them, and no ambiguity or other aspect of this Agreement shall be
construed against any Party solely by virtue of the drafting or
presentment of this Agreement. Each Party has been advised to speak
with legal and accounting professionals to understand the legal and tax
implications and impact of the transactions contemplated hereby, and
neither Party has relied upon the other, the Company, or their
respective counsel in connection therewith.
j) Severable Provisions. The provisions of this
Agreement are severable, and if any one or more provisions is
determined to be illegal, indefinite, invalid or otherwise
unenforceable, in whole or in part, by any court of competent
jurisdiction, then the remaining provisions of this Agreement and any
partially unenforceable provisions to the extent enforceable in the
pertinent jurisdiction, shall continue in full force and effect and
shall be binding and enforceable on the Parties.
k) Survival. Neither termination nor completion shall
affect the provisions of paragraphs 2(d), 2(f), 4, 5, 6, 8 AND 9 hereof
and the indemnification and non-circumvention provisions which are
incorporated therein, which shall remain operative and in full force
and effect for a period of two years subsequent to the Termination
Date.
l) Facsimile Copies. It is agreed that an executed
facsimile or copy of this document is a legal and biding contract with
the same force and effect as the original.
[Signatures on following page]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date and year first above written.
PROJECT MANAGER EQUINET, Inc., a New York corporation
By:
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Greg Davis, President
THE COMPANY iBIZ TECHNOLOGY CORP., a Florida corporation
By:
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Name:
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Its:
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SCHEDULE A
WARRANTS ISSUABLE AS OF JANUARY 20, 2000
Funding Source Funding Amount Warrant Shares Exercise Price
- -------------- -------------- -------------- --------------
Globe United Holdings, Inc. $600,000 90,000 $0.99
$1,000,000 150,000 $1.46
Blaine Ruzycki $275,000 41,250 $1.45