Exhibit 4.1 (b)
CONSULTING AGREEMENT
This Consulting Agreement (the "Consulting Agreement" or "Agreement") is made as
of this April 16th, 2002 by and between Mark L. Baum (hereinafter referred to as
"Consultant"), an individual, having his principle address at 3202 Fondren Road,
Houston, Texas 77063 and iBIZ Technology Corporation (hereinafter referred to as
the "Company") with offices at 2238 West Lone Cactus Drive, Phoenix, Arizona
85021.
WITNESSETH
WHEREAS, the Company desires to retain the services of Consultant relating
specifically to strategic planning and business development, management and
operational efficiency and other advisement related to merger and acquisition
advisement, legal matters advisement and other and investment banking services,
all in connection with the going forward operation of its business; and
WHEREAS, Consultant is qualified and willing to provide the Company with the
aforementioned services; and
WHEREAS, the Company wishes to induce Consultant to provide these consulting
services to the Company; and
NOW, THEREFORE, in consideration of the mutual covenants hereinafter stated, it
is agreed as follows:
1. APPOINTMENT.
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The Company hereby engages Consultant and Consultant agrees to render
services to the Company as a consultant upon the terms and conditions
hereinafter set forth.
2. TERM.
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The term of this Consulting Agreement began as of the date of this
Agreement, and shall terminate 180 days hence, unless terminated or extended in
accordance with a valid provision contained herein, or unless extended by a
subsequent agreement between the parties.
3. SERVICES.
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a. The Company is desirous of the Consultant to specifically
engage in advisement with respect to the identification, evaluation,
structuring, negotiating and closing of mergers and acquisitions and advice with
regard to the ongoing managing and operating of such acquisitions upon
consummation thereof. Although the Consultant has offered to work on such
efforts for compensation to be based upon his success with respect to said
efforts, the Company believed it was in its best interest to retain the services
of the Consultant for a specific term, and to compensate Consultant with stock
options.
b. Additionally, during the term of this Agreement, Consultant
shall provide advice to undertake for and consult with the Company concerning
management of sales and marketing resources, consulting, strategic planning,
corporate organization and structure, financial matters in connection with the
operation of the businesses of the Company, expansion of services, mergers and
acquisitions and other business opportunities. Consultant agrees to provide, on
a timely basis, as agreed with the Company, the following enumerated services
plus any additional services contemplated thereby:
(i) The implementation of short-range and long-term strategic
planning to fully develop and enhance the Company's assets, resources, products
and services;
(ii) The implementation of a marketing program to enable the
Company to broaden the markets for its services and promote the image of the
Company and its products and services;
(iii) The identification, evaluation, structuring, negotiating
and closing of joint ventures, and strategic alliances and advice with regard to
the ongoing management of such efforts; and
(iv) Advice and recommendations regarding existing corporate
financing including the structure, terms and content of existing bank loans,
institutional loans, private debt funding, mezzanine financing, blind pool
financing and other preferred and common stock equity private or public
financing.
DUTIES OF THE COMPANY.
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The Company shall provide Consultant, on a regular and timely basis, with
all approved data and information about it, its subsidiaries, its management,
its products and services and its operations as shall be reasonably requested by
Consultant, and shall advise Consultant of any facts which would affect the
accuracy of any data and information previously supplied pursuant to this
paragraph. The Company shall promptly supply Consultant with full and complete
copies of all financial reports, all filings with all federal and state
securities agencies; with all data and information supplied by any financial
analyst, and with all brochures or other sales materials relating to its
products or services.
5. COMPENSATION.
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Upon the execution of this Agreement, Company agrees to pay Consultant the
following as consideration for the services rendered under this Agreement:
a. Option Shares. For no less than 15 business day subsequent to
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each respective date below (Options 1-2), Consultant shall have the option to
purchase up to 30,000,000 shares of iBIZ Technology Corporation (IBIZ) common
shares at the average of the three lowest inter-day trading prices for the
twelve (12) trading days prior to the exercise date discounted by fifty percent
(50%). Consultant's rights regarding these shares, and all of them, shall vest
immediately and shall be exercised as set forth below:
(i) 15,000,000 common shares on April 18, 2002 (Option 1);
(ii) 15,000,000 common shares on April 25, 2002 (Option 2).
b. The Compensation outlined in Section 5(a) above shall be
conveyed through an effective S-8 registration of common shares to be filed or
made effective within 5 days of the execution of this Agreement. Company agrees
to exercise it's Best Efforts to provide Consultant, it's agent or any other
party charged to file the subject S-8 Registration Statement with any and all
information, documentation and related assistance required to make the S-8
Registration Statement effective.
c. At the option of Consultant, the Compensation outlined in
Section 5(a)-(c) above may be exercised in whole or in part. Should Consultant
exercise "in-part", Company shall deliver said "part" of Compensation to
Consultant in a timeframe consistent with the manner in which this Agreement
calls for the "whole" of the Compensation to be delivered.
5.5 COSTS AND EXPENSES
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a. Miscellaneous Costs.
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Subject to the prior approval of the Company, Consultant in providing the
foregoing services, shall not be responsible for any out-of-pocket costs,
including, without limitation, travel, lodging, telephone, postage and Federal
Express charges. Consultant shall provide the Company with a detailed
accounting of monthly expenses related to the Agreement. Payment for these
expenses shall be made to Consultant within 15 days after submission to the
Company.
6. REPRESENTATION AND INDEMNIFICATION.
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(a) Company. Company agrees to indemnify, defend, and shall hold
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harmless Consultant and/or his agents, and shall defend any action brought
against said parties with respect to any claim, demand cause of action, debt or
liability, including reasonable attorneys' fees to the extent that such action
is based upon a claim that: (i) is in connection with efforts made by Consultant
on behalf of the Company that relate to this Agreement, (ii) would constitute a
breach of any of Company representation, warranty, or agreement hereunder, or
(iii) arises out of the negligence or willful misconduct of Company.
(b) Consultant. Consultant agrees to indemnify, defend, and shall
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hold harmless Company,its directors, employees and agents, and defend any action
brought against same with respect to any claim, demand, cause of action, or
liability, including reasonable attorneys' fees, to the extent that such an
action arises out of the gross negligence or willful misconduct of Consultant.
(c) Notice. In claiming indemnification hereunder, the indemnified
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party shall promptly provide the indemnifying party with written notice of any
claim, which the indemnified party believes falls within the scope of the
foregoing paragraphs. The indemnified party may, at its expense, assist in the
defense if it so chooses, provided that the indemnifying party shall control
such defense, and all negotiations relative to the settlement of any such claim.
Any settlement intended to bind the indemnified party shall not be final without
the indemnified party's written consent, which shall not be unreasonably
withheld.
6.5 COMPLIANCE WITH SECURITIES LAWS.
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The Company understands that any and all compensation outlined in Section 5
shall be paid solely and exclusively as consideration for the aforementioned
consulting efforts made by Consultant on behalf of the Company as an independent
contractor. Any monies transferred to Company by Consultant to exercise a stock
option is not made with the intent to assist in raising capital or to provide
the Company with capital. Consultant has been engaged to provide the Company
with traditional business, management and financial consulting, and related
business and legal services. Consultant's engagement does not involve the
promotion or marketing of the Company's securities, nor does it involve raising
"new" money for the Company.
7. MISCELLANEOUS.
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a. Termination: This Agreement may be terminated by either Party
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upon written notice to the other Party for any reason and shall be effective
five (5) business days from the date of such notice. Termination of this
Agreement shall cause Consultant to cease providing services under this
Agreement; however, termination for any reason whatever, shall not, unless a
Unilateral termination occurs (see above), decrease or eliminate the
compensatory obligations of the Company as outlined in Section 5 of this
Agreement.
b. Modification: This Consulting Agreement sets forth the entire
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understanding of the Parties with respect to the subject matter hereof. This
Consulting Agreement may be amended only in writing signed by both Parties.
c. Notices: Any notice required or permitted to be given hereunder
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shall be in writing and shall be mailed or otherwise delivered in person or by
facsimile transmission at the address of such Party set forth above or to such
other address or facsimile telephone number as the Party shall have furnished in
writing to the other Party.
d. Waiver: Any waiver by either Party of a breach of any provision
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of this Consulting Agreement shall not operate as or be construed to be a waiver
of any other breach of that provision or of any breach of any other provision of
this Consulting Agreement. The failure of a Party to insist upon strict
adherence to any term of this Consulting Agreement on one or more occasions will
not be considered a waiver or deprive that Party of the right thereafter to
insist upon adherence to that term of any other term of this Consulting
Agreement.
e. Assignment: The Options under this Agreement are assignable at
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the discretion of the Consultant.
f. Severability: If any provision of this Consulting Agreement is
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invalid, illegal, or unenforceable, the balance of this Consulting Agreement
shall remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
g. Counterparts; Facsimile Signatures. This Agreement may be
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executed in any number of counterparts, each of which may be executed by less
than all of the parties to this Agreement, each of which shall enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one and the same agreement. The parties shall be
entitled to rely upon and enforce a facsimile of any authorized signature as
if it were the original.
h. Disagreements: Any dispute or other disagreement arising from or
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out of this Consulting Agreement shall be submitted to arbitration under the
rules of the American Arbitration Association and the decision of the arbiter(s)
shall be enforceable in any court having jurisdiction thereof. Arbitration
shall occur only in San Diego, CA. The interpretation and the enforcement of
this Agreement shall be governed by California Law as applied to residents of
the State of California relating to contracts executed in and to be performed
solely within the State of California. In the event any dispute is arbitrated,
the prevailing Party (as determined by the arbiter(s)) shall be entitled to
recover that Party's reasonable attorney's fees incurred (as determined by the
arbiter(s)).
i. Execution of Agreement. Company has the requisite corporate
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power and authority to enter into and carry out the terms and conditions of this
Agreement, as well as all transactions contemplated hereunder. All corporate
proceedings have been taken and all corporate authorizations and approvals have
been secured which are necessary to authorize the execution, delivery and
performance by Company of this Agreement. This Agreement has been duly and
validly executed and delivered by Company and constitutes the valid and binding
obligations of Company, enforceable in accordance with the respective terms.
j. Effect of Agreement. The consummation by Company of the
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transactions herein contemplated, including the execution, delivery and
consummation of this Agreement, will comply with all applicable law and will not
conflict with or result in a breach of any of the unwaived terms of any
agreement or instrument to which Company is bound, or constitute a default
thereunder.
k. Consummation. Upon the execution and delivery of this
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Agreement, Company will have all requisite power to enter into this Agreement
and to consummate the transactions contemplated hereunder. Thereafter, this
Agreement, and the other agreements referred to herein, will constitute the
valid and binding obligations of Company, and will be enforceable in accordance
with their respective terms.
SIGNATURE PAGE
IN WITNESS WHEREOF, this Consulting Agreement has been executed by the
Parties as of the date first above written.
iBIZ Technology Corporation CONSULTANT
/s/ Kenneth Shilling /s/ Mark L. Baum
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Kenneth W. Shilling Mark L. Baum
President