CONSULTING AGREEMENT
Exhibit
10.9
THIS
CONSULTING AGREEMENT
(this
“Agreement”)
is
entered into and is effective as of July 27, 2005 by and between Homeland
Integrated Security Systems, Inc.,
a
Florida Corporation, with a principal place of business at 0 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (“Company”)
and
Big Apple Consulting USA, Inc., a Delaware Corporation, with principal offices
at 000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000 (“Consultant”).
R E C I T A L S:
A. Consultant
represents various financial websites that individuals can access to learn
more
about companies they may not otherwise be exposed to.
B. In
addition, Consultant maintains an extensive database of brokers representing
investors interested in owning stock in companies such as the Company and
employs a stock profiler team which regularly communicates with such
brokers.
C. Company
wishes to promote itself through Consultant’s efforts in the brokerage community
in order to gain as much exposure as possible for Company.
T E R M S:
NOW
THEREFORE,
in
consideration of the mutual premises and covenants contained herein, and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
is hereby acknowledged, the parties agree as follows:
1.00
Services
to be Performed by Consultant
1.01 Consultant
shall access its database of brokers, containing over 25,000 active brokers
throughout the United States who may be interested in the Company, and shall
utilize a
profiler team (comparable in size and capability to that currently employed
by
Consultant) in order to contact brokers interested in recommending Company
to
their investor clients. Consultant’s profilers will continue to “cold call” on a
regular basis, which will continually add new broker’s to the
database.
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1.02
Consultant shall diligently market and promote Company to brokers
and
other investors, advisors, counselors, trustees, agents and other
individuals and entities whom Consultant is legally permitted to
contact
(including with the proper disclosures and disclaimers) and shall
introduce Company and its principals to Consultant’s current and future
network of brokerage firms and market makers. Consultant shall promote
Company on a daily basis through all of their profilers and will
train new
profilers to promote the Company. Company understands and agrees
that
Consultant’s database constitutes proprietary information owned by
Consultant, however on a bi-weekly basis Consultant will provide
Company
with a total of all calls made by Consultant’s
profilers.
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1.03 Consultant
shall provide investor lead management services normal and customary in the
industry. Consultant will handle investor and broker inquiries (including with
the proper disclosures and disclaimers) in a professional manner and will
maintain a high call volume to outside financial institutions on behalf of
the
Company.
1.04 Consultant
shall organize, initiate, manage and facilitate broker/investor conference
telephone calls and other presentations mutually agreeable to Company and
Consultant. Expenses for broker/investor conference calls and other
presentations are to be paid by the Consultant, and must be pre-approved by
the
Company.
1.05 Consultant
shall review and monitor Company’s stockholder base and all transfer agent and
DTC reports, and shall analyze, present to, and discuss with Company the results
and implications of such reports. Company agrees to provide Consultant with
all
DTC reports on a weekly basis and a NOBO list on a monthly basis.
1.06 Consultant
shall provide Company with copies of “Assume the Sale” Reports and DTC analysis
on no less than a monthly basis, and will use their best efforts to provide
said
reports and analysis on a more frequent basis.
1.07 Company
will be permitted to visit Consultant’s facility on a regular basis and will
have the ability to talk in person with Consultant’s employees regarding their
progress during the campaign. Consultant’s employees will be allowed to contact
Company’s management for weekly conference calls and Company will be permitted
to communicate with Consultant’s management with updated emails on a regular
basis. However, Company represents and warrants it will not discuss any
information that may be considered to be “insider information” with any employee
of Consultant other than upper management and said discussions and communication
will be solely on a need to know basis.
1.08 In
addition to the services identified in Section 1.01 to 1.06 above, at the
direction of and with the consent of the Company, Consultant has agreed to
retain Management Solutions International, Inc. to provide the services
described in Exhibit “A” and made a part of this Agreement under the terms and
conditions set forth herein.
2.00
Terms
& Fees
2.01 The
term
of this Agreement shall commence on October 1, 2005 (the
“Effective
Date”)
and
shall
expire one (1) year thereafter. The Company shall have the right to extend
this
contract an additional six (6) months after the first one (1) year
expires.
2.02 As
compensation for Consultant’s services required hereunder, Consultant shall be
entitled to receive:
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(a)
Cash
Value:
Cash value of contract is Nine Hundred Thousand ($900,000) Dollars,
to be
paid in accordance with the terms and conditions of Section
2.02(b).
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(b)
Compensation:
On a monthly basis Consultant shall be entitled to receive Seventy
Five
Thousand U.S. Dollars ($75,000.00) per month due on or before the
1st of
each month. If payment is made in stock Consultant shall be entitled
to
receive Seventy Five Thousand U.S. Dollars ($75,000.00) per month
worth of
Homeland Integrated Security Systems, Inc. (HISC) common stock based
upon
the previous ten (10) day average closing bid price due and payable
on or
before the 1st of each month. The first month’s payment shall be due and
payable on or before October 1, 2005. All payments will be delivered
from
the escrow account as described in Section 2.03 below.
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(c)
Options:
As
compensation, Consultant will have the right to purchase One Million
($1,000,000) Dollars worth of common stock at a price of $0.10 per share. Should
the Consultant elect to exercise the above-described options, the free trading
shares common stock purchased under this option shall be delivered to Consultant
from the escrow account as described in Section 2.03 below.
(d)
SB-2
Registration:
Company
agrees to register 28,000,000 shares, the common stock issued for compensation
and for the options, in the name of “Big Apple Consulting USA, Inc.” in an SB-2
registration with the SEC within thirty (30) days of the date of this Agreement
which shall become effective within ninety (90) days after the date of such
SB-2
filing date. However, Consultant acknowledges that the Company cannot guarantee
the exact date on which SEC shall declare the SB-2 effective. In the event
that
the SB-2 has not become effective within ninety (90) days of the date of this
Agreement, then Consultant shall have the option to terminate this Agreement
with five (5) days written notice.
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2.03
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Escrow
Account:
Company agrees to deposit 28,000,000 shares of Homeland Integrated
Security Systems, Inc. (HISC) common stock in an escrow account with
Xxxxxxx Xxxxxxxxxxx of GreenTree Financial, upon the signing of this
Agreement. Should the Consultant elect to exercise the Option described
in
Section 2.02(c) the common stock purchased under that option shall
be
delivered to Consultant from the escrow account upon receipt by the
escrow
agent of a certified or bank check from the Consultant. Commencing
on or
before October 1, 2005, and continuing throughout the Initial Term
of this
Agreement, the monthly payments shall be released to Consultant in
accordance with section 2.02(b) above. After expiration or termination
of
this Agreement any common stock remaining in escrow will be returned
to
the Company.
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3.00
Termination
In
the
event of a breach of this agreement by Company, Company shall be responsible
for
any outstanding fees and expenses. Consultant shall have the right to terminate
this Agreement on the grounds of the Company’s failure to remit the required
monthly payments or in the event of any breach of the Agreement by Company.
Company
has the right to terminate this agreement with ninety (90) days written notice.
In the event of a material breach of this Agreement by Consultant, which shall
be termed a “Default”, Company shall provide Consultant with written notice of
the Default and afford Consultant a twenty (20) day cure period. If Consultant
fails to cure the alleged Default within the proscribed time, then Company
shall
have the right to terminate this Agreement upon ten (10) days written notice
and
any unearned compensation shall be returned to Company. In the event that
Consultant disputes any alleged Default, Consultant shall provide Company with
written notice of said dispute within ten (10) days after receipt of the
Company’s notice of Default. The parties agree that written notice will be
deemed accepted and received by the parties via certified mail delivered to
the
address above or fax notification.
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4.00
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Representations
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Company
represents and warrants that it is in compliance with all required
filings
and regulations of NASD, the SEC and/or any other governmental agencies,
and that the Company’s stock is not suspended from trading for any reason
whatsoever. Company further represents and warrants that during the
term
of this agreement, it will continue to file all required reports
with the
SEC, NASD and/or any other governmental agencies and will continue
to
adhere to SEC, NASD, and/or any other governmental agency’s requirements,
and that it will take whatever steps are deemed necessary to keep
its
shares listed and “fully reporting.” The Company’s failure to comply with
the provisions of this paragraph shall constitute a material breach
of the
parties’ agreement. Since Consultant has agreed to accept payment for
services, in part, in the form of shares of the Company, the Company
agrees that the value of the shares at the time of this agreement
will be
adversely affected and impacted if the promotion of the Company to
the
financial community and others is suspended due to a breach of the
representations and warranties contained herein. Further, in the
event of
a breach of the representations and warranties contained herein the
Company agrees to continue to make any payments due and the Company
agrees
to pay Consultant one and a half (1.5) times the cash value for any
shares
Consultant holds or is due and payable (as
part of its compensation for this agreement)
at
the time of the Company’s breach of this paragraph. This “make whole
payment” shall be made within five (5) business days of the date of the
breach.
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5.00
Miscellaneous
Terms
5.01
Anti-dilution
Clause.
The
company must notify the Consultant in writing at least ten (10) days prior
to
any new shares being added to the Company’s outstanding share total; including
notifying the Consultant if any new shares are being added to the company’s
float. Officers of the company must notify the Consultant of any transactions
regarding the company’s security. If dilution occurs without the requisite
notice, the Consultant’s compensation must be adjusted proportionately. If
company violates the anti-dilution clause, then company must pay Consultant
1.5
times cash value for any shares the Consultant holds as part of its compensation
for this agreement.
5.02
Successors. The
provisions of this Agreement shall be deemed to obligate, extend to and inure
to
the benefit of the successors, assigns, transferees, grantees, and indemnities
of each of the parties to this Agreement.
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5.03
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Governing
Law.
This Agreement and the interpretation and enforcement of the terms
of this
Agreement shall be governed under and subject to the laws of the
State of
New York.
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5.04
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Jurisdiction.
Jurisdiction for court action, court and authorities in the State
of New
York or the Federal District Court having venue for the State of
New York
should have jurisdiction over all controversies that may arise with
respect to this agreement. Company hereby waives any other venue
to which
it might be entitled to by virtue of domicile or otherwise.
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5.05
Integration.
This
Agreement, after full execution, acknowledgment and delivery, memorializes
and
constitutes the entire agreement and understanding between the parties and
supersedes and replaces all prior negotiations and agreements of the parties,
whether written or unwritten. Each of the parties to this Agreement acknowledges
that no other party, nor any agent or attorney of any other party has made
any
promises, representations, or warranty whatsoever, express or implied, which
is
not expressly contained in this Agreement; and each party further acknowledges
that he or it has not executed this Agreement in reliance upon any belief as
to
any fact not expressly recited herein above.
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Attorneys
Fees. In
the event of a dispute between the parties concerning the enforcement
or
interpretation
of this Agreement, the prevailing party in such dispute, whether
by legal
proceedings
or otherwise, shall be reimbursed immediately for the reasonably
incurred
attorneys'
fees and other costs and expenses by the other parties to the
dispute.
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| 5.07 |
Context.
Wherever the context so requires, the singular number shall include
the
plural and the
plural shall include the singular.
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| 5.08 |
Captions.
The captions by which the sections and subsections of this Agreement
are
identified
are for convenience only, and shall have no effect whatsoever upon
its
interpretation.
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| 5.09 |
Severance.
If any provision of this Agreement is held to be illegal or invalid
by a
court of competent
jurisdiction, such provision shall be deemed to be severed and deleted
and
neither
such provision, nor its severance and deletion, shall affect the
validity
of the remaining
provisions.
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| 5.10 |
Counterparts.
This Agreement may be executed in any number of counterparts, each
of
which
shall be deemed an original and, when taken together shall constitute
one
and the same
instrument.
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| 5.11 |
Expenses
Associated With This Agreement.
Each of the parties hereto agrees to bear its own
costs, attorney's fees and related expenses associated with this
Agreement.
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5.12
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Arbitration. Any
dispute or claim arising from or in any way related to this agreement
shall be settled by arbitration in New York at the option of Consultant.
All arbitration shall be conducted in accordance with the rules and
regulations of the American Arbitration Association ("AAA").
AAA shall designate a panel of three arbitrators from an approved
list of
arbitrators following both parties' review and deletion of those
arbitrators on the approved list having a conflict of interest with
either
party. Each party shall pay its own expenses associated with such
arbitration. A demand for arbitration shall be made within a reasonable
time after the claim, dispute or other matter has arisen and in no
event
shall such demand be made after the date when institution of legal
or
equitable proceedings based on such claim, dispute or other matter
in
question would be barred by the applicable statutes of limitations.
The
decision of the arbitrators shall be rendered within sixty (60) days
of
submission of any claim or dispute, shall be in writing and mailed
to all
the parties included in the arbitration. The decision of the arbitrator
shall be binding upon the parties and judgment in accordance with
that
decision may be entered in any court having jurisdiction
thereof.
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| 5.13 |
Assignment.
Neither Company, nor Consultant, shall have the right to assign or
delegate this Agreement or any rights or obligations created hereby
unless
the non-assigning party expressly approves the assignment in
writing.
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| 5.14 |
Authority
to Bind.
A
responsible officer of each party has read and understands the contents
of
this Agreement and is empowered and duly authorized on behalf of
that
party to execute it.
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| 5.15 |
Continuing
Obligations:
Both Company and Consultant shall hereafter execute all documents
and do
all acts reasonably necessary to effect the provisions of this
Agreement.
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| 5.16 |
Reversion
of Payment:
If at any time, Company shall be in default of the payment provisions
of
this contract for a period greater than seven (7) days, then the
Consultant shall no longer be obligated to accept payment in the
form of
free trading shares of stock and the balance due, and any payments
due
thereafter, shall be paid only in cash, certified check, cashiers
check or
money order, unless Company is advised otherwise by Consultant in
writing.
Further, if at any time, Company shall be in default of the payment
provisions of this contract for a period greater than five (5) days,
all
services provided by Consultant under this Agreement shall be suspended
until such time as payment in full of any outstanding balance is
made and
services under the Agreement shall be reinstated on the day after
the day
on which payment is received. Consultant reserves the right, at
Consultant’s sole option, to submit and assign any outstanding balance to
an independent third party for the purpose of collecting any outstanding
balance owed Consultant.
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| 5.17 |
Claims,
Actions or Proceedings relating to the issuance of Stock
compensation:
In the event that Company compensates Consultant with stock, then
Company
agrees to indemnify and hold harmless the Consultant from any action,
claim or proceeding resulting from the issuance of the shares. Said
indemnification shall include all fees and costs including reasonable
attorney’s fees which the Consultant may incur. Consultant shall have the
right to designate its own counsel for representation arising out
of any
indemnification and the costs thereof shall be borne by the
Company.
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| 5.18 |
Notices:
All notices must be in writing and sent to the appropriate address
listed
above, or to such other address as either party may designate in
writing,
by first class mail and either certified mail return receipt requested
or
overnight courier service. In the case of certified mail notice shall
be
deemed given as of the date of deposit with the United States Postal
Service, and in case of overnight courier service notice shall be
deemed
given as of the date of deposit with such overnight courier
service.
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| 5.19 |
Confidentiality:
Both
Consultant and Company agree that it will not at any time, or in
any
fashion or manner divulge, disclose or otherwise communicate to any
person
or corporation, in any manner whatsoever, any information of any
kind,
nature, or description concerning any matters affecting or relating
to the
business of each others company. This includes its method of operation,
or
its plans, its processes, or other data of any kind or nature that
they
know, or should have known, is confidential and not already information
that resides in the public domain. Both the Consultant and Company
expressly agree that confidentiality of these matters is extremely
important and gravely affect the successful conduct of business of
each
company, and its goodwill, and that any breach of the terms of this
section is a material breach of this Agreement. The provisions of
this
section shall survive termination of the
Agreement.
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6.00
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Enforceability
of Agreement: This
Agreement shall neither be deemed to be nor be enforceable until
executed
by Consultant. Further, should the parties fail to execute this Agreement
within thirty (30) days from the date of delivery of this Agreement,
then
this Agreement and all the terms and conditions contained herein
shall
become and be deemed null and void and neither party named herein
shall be
bound hereby. Consultant, without the consent of Company, shall have
the
sole option to extend the time requirements set forth within this
section
6.00, and any request by Company to extend the time requirements
set forth
in section 6.00 must be approved by Consultant in
writing.
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IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date set forth
above.
COMPANY:
A
Florida
corporation
By: _____________________________
Xxxxx
X.
Xxxxx, CEO
CONSULTANT:
Big
Apple
Consulting USA, Inc.
A
Delaware Corporation
By: __________________________
Xxxx
Xxxxxx, President
8
E
X H I B
I T A
(MANAGEMENT
CONSULTING AND AGENT SERVICES)
At
the
direction of and with the consent of the Company, Consultant has agreed to
retain Management Solutions International, Inc. (“MSI”) to provide the services
described below under the terms and conditions set forth in this
Agreement
and the
Consultant will work closely with the Company to set priorities and objectives
to be accomplished during this engagement.
| A) |
Assist
in Defining Capital needs and Sources and Uses of
Funds.
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| B) |
Work
closely with Client to develop a Business
Plan
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| C) |
Draft
a Private Placement Memorandum and
Subscription.
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| D) |
Assist
in the preparation of all of the appropriate form filing to raise
private
capital.
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| E) |
Research
and evaluate current and future acquisition candidates based on the
Client’s outlined acquisition strategy.
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| F) |
Analyze,
Evaluate and do preliminary Due Diligence on any current and future
acquisition candidates. This includes meetings in Person, by Phone,
Fax,
Email, etc.
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| G) |
Evaluate
existing and Develop new Distribution Channels for the Client’s
products
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| H) |
Layout
Timeline and Action Plan based on the outlined acquisition
strategy.
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| I) |
General
Business Consulting (answering questions, giving advice, introductions)
as
required.
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