Exhibit 2.6
INDEPENDENT CONSULTING AGREEMENT
This Independent Consulting Agreement ("Agreement"), effective as of
this 24th day of May, 2005 ("Effective Date") is entered into by and between
RELATIONSERVE, INC., a Delaware corporation (herein referred to as the
"Company") and SUMMIT FINANCIAL PARTNERS, LLC., an Indiana Limited Liability
Company (herein referred to as the "Consultant").
RECITALS
WHEREAS, the Company is a privately-held corporation, which is
contemplating a reverse merger with a to-be-identified public company (the
"Merger"); and
WHEREAS, the Company desires to engage the services of Consultant to
represent the Company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities, and to consult with management
concerning such Company activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows:
1. TERM OF CONSULTANCY. The Company hereby agrees to retain the Consultant to
act in a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing immediately and terminating on 23rd
May, 2006.
2. DUTIES OF CONSULTANT. The Consultant agrees that it will generally provide
the following specified consulting services through its officers and employees
during the term specified in Section 1, above.
(a) Consult with and assist the Company in developing and
implementing appropriate plans and means for presenting the Company
and its business plans, strategy and personnel to the financial
community, establishing an image for the Company in the financial
community, and creating the foundation for subsequent financial
public relations efforts;
(b) Introduce the Company to the financial community, including, but
not limited to, retail brokers, buy side and sell side institutional
managers, portfolio managers, analysts, and financial public
relations professionals;
(c) With the cooperation of the Company, maintain an awareness
during the term of this Agreement of the Company's plans, strategy
and personnel, as they may evolve during such period, and consult
and assist the Company in communicating appropriate information
regarding such plans, strategy and personnel to the financial
community;
(d) Assist and consult the Company with respect to its (i) relations
with stockholders, (ii) relations with brokers, dealers, analysts
and other investment professionals, and (iii) financial public
relations generally;
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(e) Perform the functions generally assigned to stockholder
relations and public relations departments in major corporations,
including responding to telephone and written inquiries (which may
be referred to the Consultant by the Company); preparing press
releases for the Company with the Company's involvement and approval
of press releases, reports and other communications with or to
shareholders, the investment community and the general public;
consulting with respect to the timing, form, distribution and other
matters related to such releases, reports and communications; and,
at the Company's request and subject to the Company's securing its
own rights to the use of its names, marks, and logos, consulting
with respect to corporate symbols, logos, names, the presentation of
such symbols, logos and names, and other matters relating to
corporate image;
(f) Upon and with the Company's direction and written approval,
disseminate information regarding the Company to shareholders,
brokers, dealers, other investment community professionals and the
general investing public;
(g) Upon and with the Company's direction, conduct meetings, in
person or by telephone, with brokers, dealers, analysts and other
investment professionals to communicate with them regarding the
Company's plans, goals and activities, and assist the Company in
preparing for press conferences and other forums involving the
media, investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategies,
mission statements budgets, proposed transactions and other plans
for the purpose of advising the Company of the public relations
implications thereof; and
(i) Otherwise perform as the Company's consultant for public
relations and relations with financial professionals.
3. ALLOCATION OF TIME AND ENERGIES. The Consultant hereby promises to perform
and discharge faithfully the responsibilities which may be assigned to the
Consultant from time to time by the officers and duly authorized representatives
of the Company in connection with the conduct of its financial and public
relations and communications activities, so long as such activities are in
compliance with applicable securities laws and regulations. Consultant and staff
shall diligently and thoroughly provide the consulting services required
hereunder. Although no specific hours-per-day requirement will be required,
Consultant and the Company agree that Consultant will perform the duties set
forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur within or shortly after the first
two months of the effectiveness of this Agreement. It is explicitly understood
that neither the price of the Company's common stock, nor the trading volume of
the Company's common stock hereunder measure Consultant's performance of its
duties. It is also understood that the Company is entering into this Agreement
with Consultant, a corporation and not any individual member or employee
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thereof, and, as such, Consultant will not be deemed to have breached this
Agreement if any member, officer or director of the Consultant leaves the firm
or dies or becomes physically unable to perform any meaningful activities during
the term of the Agreement, provided the Consultant otherwise performs its
obligations under this Agreement.
4. REMUNERATION.
4.1 (a) For undertaking this engagement, for previous services
rendered, and for other good and valuable consideration, the Company
agrees to issue, or have issued, to the Consultant One Million Fifty
Thousand (1,050,000) shares of the Company's Common Stock ("Common
Stock" and such shares, collectively, the "Shares"). The shares are
to be issued to Consultant's principals in the following manner:
Xxxxxxx X. Xxxxxxxxx 787,500 shares, Xxxx X. Xxxxx 262,500 shares.
The aforementioned principals shall be included in the
aforementioned definition of Consultant. These shares shall be fully
paid and non-assessable and stock certificates representing these
shares shall be issued and delivered to Consultant within 10 days of
the Closing of the Merger.
(b) Consultant agrees that the Company may, in its sole
discretion, cause one or more shareholders of the Company to
deliver any of or all of the Shares to be issued and delivered to
Consultant hereunder.
4.2 The shares referenced in Section 4.1 constitute payment for Consultant's
agreement to consult to the Company for the twelve month period set forth in
Section 1 and for services to be rendered hereunder and no further amounts are
due by the Company for services to be rendered by Consultant hereunder.
Consultant agrees and understands that if during the term of this Agreement,
Consultant performs substantial services for any direct competitor of the
Company, the Shares issued to Consultant hereunder will be forfeited.
4.3 Company and Consultant acknowledge and agree that for purposes of the
Company's internal accounting practices, the Company may desire to allocate all
or a portion of the shares referenced in Section 4.1 to any number of the
services provided by the Consultant to the Company under this Agreement
consistent with the United States generally accepted accounting practices.
Accordingly, Consultant agrees to cooperate with the Company, and will provide
to the Company reasonable support and documentation in connection with any such
allocation process.
4.4 Company warrants that the Shares issued to Consultant under this Agreement
by the Company shall be or have been validly issued, fully paid and
non-assessable and that the Company's board of directors has or shall have duly
authorized the issuance and any transfer of them to Consultant.
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4.5 Consultant acknowledges that the Shares to be issued pursuant to this
Agreement may not be registered under the Securities Act of 1933, as amended
(the "Securities Act") and if not are "restricted securities" within the meaning
of Rule 144 of the Act. As such, the Shares may not be resold or transferred
unless the Company has received an opinion of counsel and in form reasonably
satisfactory to the Company that such resale or transfer is exempt from the
registration requirements of that Securities Act.
4.6 In connection with the acquisition of the Shares, each Consultant
represents and warrants to the Company, to the best of its/his knowledge, as
follows:
(a) Each of them has been afforded the opportunity to ask questions
of and receive answers from duly authorized officers or other
representatives of the Company concerning an investment in the
Shares, and any additional information that each of them has
requested.
(b) Each of their investment in restricted securities is reasonable
in relation to its/his net worth, which is in excess of ten (10)
times the Consultant's cost basis in the Shares. Each of them has
had experience in investments in restricted and publicly traded
securities, and each of them has had experience in investments in
speculative securities and other investments that involve the risk
of loss of investment. Each of them acknowledges that an investment
in the Shares is speculative and involves the risk of loss. Each of
them has the requisite knowledge to assess the relative merits and
risks of this investment without the necessity of relying upon other
advisors, and each of them can afford the risk of loss of his entire
investment in the Shares. Each of them is an accredited investor, as
that term is defined in Regulation D promulgated under the
Securities Act.
(c) Each of them is acquiring the Shares for the its/his own account
for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
5. FINDERS FEE.
WHEREAS, Consultant has agreed to Introduce the Company to third
parties described herein, for the purpose of evaluating a potential transaction
involving either an equity or debt financing (a "Financing") or a direct or
indirect acquisition, merger, consolidation, restructuring, or any similar or
related transaction of all or substantially all of the assets by the Company of
a third party entity or the acquisition of a majority of such entity's
outstanding common stock ("Acquisition") (a Financing or an Acquisition shall be
known as a "Transaction"); and
WHEREAS, in order to induce Consultant to Introduce third parties
described herein to the Company, the Company has agreed, for itself, and on
behalf of its directors, officers, employees, agents, advisors, affiliates or
their respective representatives, to compensate Consultant in the event that the
Company consummates a Transaction with a third party described herein, upon the
terms and conditions set forth herein;
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NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound, the parties hereto agree as follows:
1. TERMS OF COMPENSATION.
a. FEE.
i. It is understood that in the event Consultant
directly Introduces Company to a person or entity,
not already having a preexisting relationship with
the Company, with whom Company, or its nominees,
ultimately finances or causes the completion of a
Financing with a person or entity, Company agrees to
compensate Consultant for such services with a
"finder's fee" in the amount of 7% of total gross
funding provided by such lender or equity purchaser,
such fee to be payable in cash.
ii. It is understood that in the event Consultant
Introduces Company to an intermediary or broker
dealer, not already having a preexisting relationship
with Company, with whom Company, or its nominees,
ultimately finances or causes the completion of a
Financing with a person or entity, Company agrees to
compensate Consultant for such services with a
"finder's fee" in the amount of 3% of total gross
funding provided by such intermediary or broker
dealer, such fee to be payable in cash. This will be
in addition to any fees payable by Company to said
intermediary or broker dealer, if any, which shall be
per separate agreements negotiated between Company
and such other intermediary or broker dealer.
iii. It is also understood that in the event Consultant
directly Introduces Company, or its nominees, to a
merger and/or acquisition candidate, not already
having a preexisting relationship with Company, with
whom Company, or its nominees, ultimately is
acquired, or with whom Company, or its nominees
acquires or causes the completion of such
acquisition, Company agrees to compensate Consultant
for such services with a "finder's fee" in the amount
of 5% of total gross consideration provided by such
merger and/or acquisition, such fee to be payable in
the same form of consideration received by the
seller/merged company.
iv. It is also understood that in the event Consultant
Introduces Company, or its nominees, to a merger
and/or acquisition candidate, indirectly through
another intermediary, not already having a
preexisting relationship with Company, with whom
Company, or its nominees, ultimately is acquired
further to an Acquisition, or with whom Company, or
its nominees acquires or causes the completion of
such Acquisition, Company agrees to compensate
Consultant for such services with a "finder's fee" in
the amount of 3% of total gross consideration
provided by such merger and/or acquisition, such fee
to be payable in the same form of consideration
received by the seller/merged company. This will be
in addition to any fees payable by Company to any
other intermediary, if any, which shall be per
separate agreements negotiated between Company and
such other intermediary.
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v. It is also understood that in the event Consultant
Introduces Company to a strategic or business
partner, not already having a preexisting
relationship with Company, with whom Company, or its
nominees, ultimately enters into a business alliance,
Company agrees to compensate Consultant, for such
services with a "finder's fee" in the amount of 5% of
total gross revenue provided by such business
alliance, for the life of the business alliance, such
fee to be payable in cash within 10 days of Company'
receipt of said revenue.
vi. Company agrees that said compensation to Consultant
shall be paid in full at the time said financing or
acquisition/merger is closed, such compensation to be
transferred by Company to Consultant within five (5)
business days of the closing of a financing, merger
or acquisition transaction.
b. INTRODUCTION. For the purposes of this Agreement, a person
described in subparagraphs 1(a)(i)-(v) herein shall be
considered to have been "Introduced" to the Company
through Consultant if the person was Introduced to the
Company or its officer or directors directly by Consultant
or his agents and Consultant registered the prospect in
writing with __________ on behalf of the Company,
Consultant will notify Company, in writing, of
Introductions it makes for potential sources of financing
or acquisitions/mergers or strategic partners in a timely
manner (within approximately 3 days of introduction) via
confirmed delivery of a facsimile memo or email. If
Company has a preexisting relationship with such nominee
and believes such party should be excluded from this
Agreement, then Company will notify Consultant immediately
within five (5) business days of Consultant's facsimile to
Company of such circumstance via facsimile memo or email.
c. STATUS. IT IS SPECIFICALLY UNDERSTOOD THAT CONSULTANT IS
NOT AND DOES NOT HOLD ITSELF OUT BE A BROKER/DEALER, BUT
IS MERELY A "FINDER" IN REFERENCE TO THE COMPANY PROCURING
FINANCING SOURCES AND ACQUISITION/MERGER CANDIDATES. THE
CONSULTANT WILL ONLY BE INTRODUCING THE COMPANY TO SUCH
POTENTIAL ENTITIES AND WILL NOT BE RESPONSIBLE FOR THE
STRUCTURING OF ANY TRANSACTION. Any obligation to pay a
"Finder's Fee" hereunder shall survive the merging,
acquisition, or other change in the form of entity of the
Company and to the extent it remains unfulfilled shall be
assigned and transferred to any successor to the Company.
The Company agrees that no reference to the Consultant
will be made in any press release or advertisement of any
transaction without the express approval, in writing, of
such release by Consultant.
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2. NON-EXCLUSIVE AGREEMENT. Notwithstanding the foregoing or
anything to the contrary stated herein, the Company and
Consultant agree that this Agreement shall be exclusive only to
the Investors and otherwise shall not prohibit the Company from
entering into any other stock purchase or any other agreement
with parties other than the Investors, nor shall this Agreement
prohibit the Company from entering into any investment banking
relationship, merger agreement, or underwriting agreement with
any other party. If the Company completes a Transaction with a
person described in subparagraphs 1(a);(i)-(v) herein
Introduced to the Company through Consultant during the term of
this Agreement and with whom the Company did not have a
pre-existing relationship at the time of the Introduction, the
Company shall pay Consultant concurrently with the closing of
such Transaction the cash due pursuant to Section 1.
3. INDEMNIFICATION. The Company shall indemnify and hold harmless
Consultant and its officers, directors, agents and employees
from any loss, damage or liability resulting from Company's
violation of the terms of this Agreement or any agreement
between the Company and any of the Investors regarding the
Investment.
4. INDEPENDENT CONTRACTOR. In providing services to the Company
under this Agreement, Consultant shall be an independent
contractor, and no party to this Agreement shall make any
representations or statements indicating or suggesting that the
joint venture, partnership, or other such relationship exist
between Consultant and the Company. Consultant shall not be
entitled to make any comments or create any obligations on
behalf of the Company without the Company's prior written
consent.
5. AMENDMENT. This Agreement may be amended or modified at any
time and in any manner only by an instrument in writing
executed by the parties hereto.
6. HEADINGS. This section and subsection headings in this
Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this
Agreement.
7. ASSIGNMENT. This Agreement nor any right created by it may be
assigned by Consultant without the prior written consent of the
Company.
8. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute on and the
same instrument.
9. SEVERABILITY. If any part of this Agreement is deemed to be
unenforceable the balance of this Agreement shall remain in
full force and effect.
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6. ASSIGNABILITY. Company shall assure that in the event of any merger,
acquisition, or similar change of form of entity, that its successor entity
shall agree to complete all obligations, if any, to Consultant. Consultant shall
not assign its rights or delegate its duties hereunder without the prior written
consent of Company.
7. EXPENSES. Consultant agrees to pay for all its expenses (phone, travel,
mailing, faxing, labor, etc.), not including extraordinary items (luncheons or
dinners to large groups of investment professionals, investor conference calls,
print advertisements in publications, etc.) approved by the Company in writing
prior to its incurring an obligation for reimbursement. The Company agrees and
understands that Consultant will not be responsible for preparing or mailing due
diligence and/or investor packages on the Company, and that the Company will
have some means to prepare and mail out investor packages at the Company's
expense.
8. INDEMNIFICATION. The Company warrants and represents that all oral
communications, written documents or materials furnished to Consultant or the
public by the Company with respect to financial affairs, operations,
profitability and strategic planning of the Company are accurate in all material
respects and Consultant may rely upon the accuracy thereof without independent
investigation. The Company will protect, indemnify and hold harmless Consultant
against any claims or litigation including any damages, liability, cost and
reasonable attorney's fees as incurred with respect thereto resulting from
Consultant's communication or dissemination of any said information, documents
or materials excluding any such claims or litigation resulting from Consultant's
communication or dissemination of information not provided or authorized by the
Company.
9. REPRESENTATIONS. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory agency having
jurisdiction over Consultant. Consultant acknowledges that, to the best of its
knowledge, Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor. Company acknowledges that, to
the best of its knowledge, that it has not violated any rule or provision of any
regulatory agency having jurisdiction over the Company. Company acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws.
10. LEGAL REPRESENTATION. Each of Company and Consultant represents that they
have consulted with independent legal counsel and/or tax, financial and business
advisors, to the extent that they deemed necessary.
11. STATUS AS INDEPENDENT CONTRACTOR. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company.
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Neither party to this Agreement shall represent or hold itself out to be the
employer or employee of the other. Consultant further acknowledges the
consideration provided hereinabove is a gross amount of consideration and that
the Company will not withhold from such consideration any amounts as to income
taxes, social security payments or any other payroll taxes. All such income
taxes and other such payment shall be made or provided for by Consultant and the
Company shall have no responsibility or duties regarding such matters. Neither
the Company nor the Consultant possesses the authority to bind each other in any
agreements without the express written consent of the entity to be bound.
12. ATTORNEY'S FEE. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.
13. WAIVER. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
14. NOTICES. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:
TO THE COMPANY:
Xxxxx Xxxxxx, COO
0000 X. Xxxxxxx Xxx., 0xx Xxxxx
Xx. Lauderdale, FL.33309
TO THE CONSULTANT:
Summit Financial Partners, LLC.
Xxxxxxx X. Xxxxxxxxx, President
00000 Xxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX. 46032
It is understood that either party may change the address to which notices for
it shall be addressed by providing notice of such change to the other party in
the manner set forth in this paragraph.
15. CHOICE OF LAW. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Indiana.
16. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
Indianapolis, IN in accordance with the applicable rules of the American
Arbitration Association, Commercial Dispute Resolution Procedures, and judgment
on the award rendered by the arbitrator(s) shall be binding on the parties and
may be entered in any court having jurisdiction.
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17. COMPLETE AGREEMENT. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
SIGNATURES APPEAR ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
AGREED TO:
COMPANY:
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: COO and its Duly Authorized Agent
CONSULTANT:
Summit Financial Partners, LLC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: President and its Duly Authorized Agent
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