EXHIBIT 10.05
CONSULTING SERVICES AGREEMENT
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THIS AGREEMENT is made effective as of the 1ST day of June, 1994 by and
between INSYNC SYSTEMS, INC., a California corporation with offices at 2070 De
LA Cruz boulevard, Santa Clara, CA (Insync"), and. KAIROS, INC., a Delaware
corporation with offices at Suite 3222,1700 Market Street, Philadelphia,
Pennsylvania ("Kairos").
RECITALS:
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A. Kairos, Inc. practices various strategies and programs to help
businesses design more competitive enterprises and is in the business of
providing business design and consulting services.
B. Insync desires to engage the services of Kairos, and Kairos desires to
accept such engagement in providing to Insync a variety of design and consulting
activities and advice, including the development of capabilities and design of
business processes, on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the promises and the mutual covenants
and conditions contained herein, the parties intending to be legally bound
hereby, agree as follows:
AGREEMENT
1. ENGAGEMENT. The Company hereby engages Kairos as an independent
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contractor to provide the business design and consulting services to Insync as
se forth hereafter; and Kairos hereby accepts such engagement and agrees to
perform such services, all in accordance with the terms and conditions set forth
herein.
2. DUTIES OF KAIROS. Kairos shall provide such business design and
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consulting services as described below and as set forth move particularly in the
document "Becoming a Flexible Enterprise: Improving Business Processes in
Insync" presented to Stan Leopard dated June 3, 1994 Exhibit A), previously
delivered by Kairos to Insync.
3. COMPENSATION TO KAIROS.
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(a) For the engagement, Insync will pay to Kairos for services
rendered hereunder not less than two hundred and seventy thousand ($270,000)
Dollars. Our fee for the first phase of the project (the first six to eight
months) will be $45,000 per month, We expect the total amount of the first phase
to be $270,000. based on a six month project, but if we extend to eight months
the $45,000/month fee will continue. The fee for this project is based on a
planned return to Insync of one million dollars. Monthly payments will be
according to the following schedule:
Month worked Fee
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June $ 20,000
July $ 25,000
August $ 35,000
September 150,000
October $ 61,000
November $ 75,000
December $ 45,000 (If Phase I continued, etc.)
The professional fees for this project are based on a partnership" between
Insync and Kairos in producing the results of the project and sharing as
partners in the financial rewards of the results. We both agree that Kairos
total fees and expenses for phase 1 of the project will be 50% of the
improvement in financial results attributable to the project for either (1) the
period from the beginning of the project through 12/31/95 or (2) a period equal
to the time engaging in the project plus six months, whichever is longer. We
distinguish fees as consisting of base fees and bonus fees. The base fees will
be paid according to the schedule for phase I and will be specified for phase 2
at the beginning of that phase. Base fees are expected to be funded from
financial improvements attributable to the project within ninety days of the
project initiation. The bonus fees for phase I will be paid at the end of phase
1, with 50% of the bonus to be paid in warrants, up to a limit of 50,000
warrants, the rest in cash, with the value of the warrants to be determined
later Bonus fee payout far phase 2 will be negotiated later. The bonus fees due
will be determined by subtracting the base fees and expenses paid by Insync for
phases I and 2 from the financial improvements of these phases of the project
respectively. For example, Kairos will receive a phase I bonus payment that is
50% of the improvement in profitability that is attributable to the project
minus the base fees of $270,000 and minus expenses incurred over the project.
Insync agrees to pay within fifteen days of invoice date.
(b) Out-of-pocket expenses for travel, lodging, meals and costs that
are necessary for Kairos' performance of the work promised in the engagement
(including but not limited to telephone and Fedex-type charges), will be billed
separately and payable monthly in accordance with invoices delivered by Kairos
to Insync, for the duration of the engagement. Such expenses will not exceed $
10,000 per month without renegotiation between Kairos and Insync.
4. DURATION AND TERMINATION. This Agreement shall remain in effect until
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the services set forth in the letter shall have been performed. However,
notwithstanding anything heretofore or hereafter, either party shall have the
right to terminate this Agreement upon ten (10) days' written notice to the
other party. On the date of effective termination, the compensation shall be
prorated on the basis of work performed to the date of effective termination.
Kairos shall refund any excess amount paid by Insync, or Insync shall pay any
amount due Kairos, within fifteen (15) days of the date of effective
termination.
5. NATURE OF RELATIONSHIP. In making and performing this Agreement, the
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parties are acting and shall act as independent contractors. Nothing in this
Agreement shall be deemed to create an agency, joint venture or partnership
relationship between the parties hereto. At no time shall either party make
commitments or incur any charges or expenses for or in the name of the other
party.
6. WAIVER. No waiver by either party of any violations or non-
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performance by the other party of any of its obligations, agreements, or
covenants hereunder shall be deemed to be a waiver of any subsequent violation
or non-performance of the same or any other covenant, agreement or obligation,
nor shall any forbearance by either party be deemed a waiver by such party of
its rights or remedies with respect to such violation or non-performance.
7. BROKERAGE FEES. Both parties represent and warrant to each other that
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all negotiations relative to this Agreement have been carried on by then
directly without the intervention of any person, firm or corporation. Each party
will indemnify the other and hold such other party harmless against and in
respect of any claims for brokerage or other commissions relative to this
Agreement or the transactions contemplated hereby made by any person, firm or
corporation claiming though it or them.
8. SEVERABILITY. If any provision of this Agreement or the application
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thereof, is adjudicated to be invalid or unenforceable such invalidity or
unenforceability shall not affect any other provision of this Agreement which
can be given effect without the invalid or unenforceable provision or
application, and to this end, the provisions of this Agreement shall be
severable.
9. TITLES AND LANGUAGE. The titles given the Sections and Paragraphs of
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this Agreement are solely for convenience of reference and shall not be
construed as having any bearing upon the interpretation or meaning of the
provisions of this Agreement. The language of this Agreement shall be: construed
to be language which the parties hereto have mutually chosen to express their
intentions on the subject matter thereof, and no rule of strict construction
shall be applied to such language as to any party hereto.
10. COUNTERPART EXECUTION. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. FORCE MAJEURE. Neither Insync nor Kairos shall be deemed in default
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of any of its obligations under this Agreement if its performance of obligations
hereunder are delayed or become impossible or impracticable by reason of any act
of God, war, fire, earthquake, strike, sickness, accident, civil commotion,
epidemic. act of government or of government agencies or officers, or any other
cause beyond such party's control. Such performance of obligations shall be
excused for the period of the delay and for a reasonable time thereafter.
12. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the term of this
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Agreement the parties may disclose to each other certain proprietary
information, trade seats, technical data, and know-how, including but not
limited to design drawings, processes, product plans or identities, and
marketing or financial information, not generally known in the marketplace and,
in the case of Kairos, certain proprietary strategies and programs, including
certain research papers, graphics, charts, transparencies/foils, case studies,
transcripts, research projects, video and/or auto tapes and magnetic
reproductions of text/graphics (collectively, the "Confidential Information"),
The parties agree that neither of them, nor any of their respective employees,
agents, or representatives, will in any fashion or for any purpose, now or in
the future, use, divulge, or disclose the Confidential Information, except to
carry out the discussions concerning, and the undertaking of this Agreement. The
parties further agree that they will take all reasonable measures to protect the
confidentiality of, and avoid the present or future disclosure or use of the
Confidential Information so as to prevent it from entering the public domain or
falling into the possession of persons other than those authorized by this
Agreement who have access to it. Only those employees or agents of the parties
who are authorized to participate in discussions between the parties or who have
been advised of its confidential nature shall be permitted to have access to the
other party's Confidential Information: Insync principals are free to use the
know-how they gain from this engagement for the benefit of Insync or other
businesses in which they might engage.
Insync, its agents, servants, principals and employees, now and forever
more, shall likewise, in, addition to anything heretofore, refrain from doing
any of the following acts with respect to Kairos' Confidential Information or
related technology:
a) communicate Kairos' Confidential Information or related
technology to any person or entity, outside of Insync;
b) use Kairos' Confidential Information or related technology for
its private benefit or for the benefit of any person or entity, except as
strictly contemplated by the terms of this Agreement;
c) use Kairos' Confidential. Information or related technology to
provide or sell business design services to any other person or entity, whether
affiliated with Insync or not;
d) use Kairos' Confidential Information or related technology in any
way whatsoever which if so used or divulged, would either damage Kairos or aid
or benefit a competitor of Kairos.
e) exchange, transfer, sell, assign, incorporate or franchise for
profit or in any other fashion, whether for profit or not, Kairos' Confidential
Information and related technology with or to any other individual or entity,
now or in the future.
The terms of this section shall survive the completion and/or
termination of this Agreement, and the parties acknowledge that the breach of
any of this section's terms at any time hereafter will give rise to irreparable
harm inadequately compensable in damages, Accordingly, the parties may seek and
obtain injunctive relief against the breach or threatened breach of any of the
within terms addition to any legal or equitable remedies which may be available.
13. NOTICES. All notices and other communications provided for in this
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Agreement shall be given or made by telex, telecopy, telegraph, cable, certified
or registered mail (return receipt requested), or delivered personally or by an
internationally recognized overnight courier service to the address set forth
below (or such other address as may be designated by any method permitted by
this Paragraph 13). All such communications shall be deemed to have been duly
given when transmitted by telex or telecopier (if a copy thereof is also mailed
to the recipient, certified or registered mail, postage prepaid), or personally
delivered or delivered by cable, telegraph or, internationally recognized
overnight courier services, or five (5) days after mailing, postage prepaid, to
the addresses set forth below:
If to Insync: INSYNC: SYSTEMS INC.
2070 De La Cruz Boulevard
Santa Clara CA 95050
Attn: Stan Leopard
If to Kairos: KAIROS, INC.
Suite 3222, 1700 Market Street
Philadelphia, Pa. 19103
Attn: Russell G. Redenbaugh
With additional to: RICHARD MAX BOCKOL, ESQ.
#253 BalaPointe Centre
111 Presidential Blvd.
Bala Cynwyd, Pa. 19004
14. GOVERNING LAW. This Agreement shall be construed and interpreted in
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accordance with the laws Of the Commonwealth of Pennsylvania without regard to
its provisions concerning conflict of laws,
15. ARBITRATION. Any and all disputes between the parties arising out of
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the subject matter of this Agreement or the interpretation of the rights and
duties of the parties as provided hereunder or the damages arising out of any
breach of this Agreement by either party, shall be submitted to arbitration in
Philadelphia, Pennsylvania, under the Commercial Arbitration Rules; of the
American Arbitration Association. The decision of the arbitrator or arbitrators
shall be final and binding upon the parties, and judgment on the arbitration
award may be entered by any court of competent jurisdiction for purposes of
enforcement of the award. The prevailing parry in the arbitration shall be
entitled to an award of its reasonable attorneys' fees and expenses in
connection with the arbitration.
16. AMENDMENTS. No amendments or additions to this Agreement shall be
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binding unless in writing and signed by both parties.
17. ENTIRE AGREEMENT. This instrument constitutes the entire agreement
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between the parties and supersedes all prior understandings, previous
negotiations, and any memoranda or understanding with respect to the subject
matter hereof.
18. BINDING EFFECT. This Agreement shall be binding upon and shall inure
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to the benefit of the parties hereto and their respective successors and
assigns.
19. DISCLAIMER. EXCEPT FOR THOSE WARRANTIES, IF ANY, SET FORTH IN THIS
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AGREEMENT, NEITHER INSYNC, NOR KAIROS MAKES ANY WARRANTIES EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF OR MECHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
IN NO EVENT SHALL INSYNC OR KAIROS BE LIABLE FOR THE OTHER PARTY'S LOSS OF
PROFITS, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF PERFORMANCE
OR NON-PERFORMANCE OF ANY PROVISION OF THIS AGREEMENT.
IN WITNESS 0F, the parties have caused this Agreement to be executed as of
The date written below.
KAIROS, INC.
Attest: /s/ Signature unreadable By: /s/ Russell G. Redenbaugh
Secretary Signature
Title: President
Printed Name: Russell G. Redenbaugh
Date: 7/6/94
INSYNC SYSTEMS, INC.
Attest: /s/ Signature unreadable By: /s/ Stan Leopard
Secretary Signature
Title: Chairman
Printed Name: Stan Leopard
Date: 7/6/94