CONSULTING AGREEMENT
EXHIBIT
10.2
This Consulting Agreement (the
“Agreement”) is made and entered into as of September 12, 2008, by and between
Information Systems Associates, Inc., a Florida corporation (the “Company”) and
all successor corporate entities, and Old Firm Energy Corporation, a Belize
International Business Company (the “Consultant”). The Company and
the Consultant are hereinafter each referred to as a “Party” and collectively as
the “Parties.”
Preamble
WHEREAS, the Consultant is willing to
provide the services referred to in paragraph 2 below to the Company for
compensation as set forth below in the Agreement; and
WHEREAS, the Company desires to
formalize its relationship with Consultant for its assistance.
NOW, THEREFORE, in consideration for
the mutual obligations set forth below, and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Parties, intending to be legally bound, hereby agree as follows:
1. Retention. The
Company hereby retains the Consultant as from August 1, 2008 (the “Effective
Date”) in order to provide the Company with the services referred to in
paragraph 2 below, and Consultant agrees, to provide such services for the term
of the Agreement.
2. Consultant’s
Services. Consultant’s services have included and shall
include general management assistance in connection with such things as
developing and writing business plans; determining future business strategies;
recruitment of directors and employees; determining how the Company can best
raise funds; advice in relation to the Company’s plans for international
expansion, including appropriate corporate structures related to said expansion;
and looking for potential mergers and acquisitions; all of the preceding with
particular reference to the company’s current or proposed activities outside the
United States of America. In addition, the parties may determine and
agree on additional services and responsibilities or change the existing
services and responsibilities, as they may determine during the terms of this
Agreement.
3. Term. The Agreement
shall remain in effect for one year from the Effective Date and shall be
automatically renew for successive one year period unless either party gives the
other written notice of intention not to renew not later than 60 days prior to
the end of the term then in effect. Written notice may contain
requested modifications to this Agreement, the written and signed acceptance of
which by the notified Party shall result in an amendment and extension of this
Agreement without requirement for further action. Notwithstanding the
foregoing, either Party may terminate the Agreement on six months notice;
provided that if the Company elects to terminate the Agreement prior to the end
of its then current term, the Consultant shall remain entitled to its annual
compensation on the terms provided in paragraph 4.
4. Compensation. The
Company shall pay Consultant, at the Company’s option, cash or shares of common
stock of the Company that are exempt from registration under the Securities Act
of 1933, as amended (the “Act”) and the transferability and resale of which are
restricted under the Act equivalent in value (as determined below) to (a) the
Annual Rate per annum for services provided from the Effective Date through the
first anniversary of the Effective Date, and (b) the Annual Rate per annum for
each successive annual term. As used in this Agreement, the “Annual
Rate” shall mean $250,000 per annum for the term commencing August 1, 2008 and
ending on July 31, 2009, which amount shall increase by $12,500 per annum for
each successive annual term such that, by way of example, for the term
commencing August 1, 2009 the Annual Rate shall be $262,500 per annum, and for
the term commencing August 1, 2010 the Annual Rate shall be $275,000 per
annum. For the payment due in August 2008 in respect of the first
annual term of this Agreement, the number of shares payable to the Consultant
shall be based on a price of $0.25 per share. For subsequent
payments, the number of shares payable shall be based on the greater of the
Floor Price and the Average Closing Price for the Company’s shares for the 20
trading days preceding the date such payment is due and, if the Company’s common
stock is not publicly trading the Average Closing Price and the number of shares
payable shall be based on the fair market value of the Company’s common stock as
determined by the Company’s Board of Directors. As used herein, the
“Floor Price” shall be equal to the greater of $0.25 per share and the highest
price per share obtained by the Company in connection with the issuance and sale
of shares of the Company common stock since August 1, 2008, including issuances
and sales of common stock upon the conversion or exercise of convertible
securities or warrants, options or other securities exercisable for, or
exchangeable into, shares of the Company’s common stock. The price at
which shares of the Company’s common stock are sold in transactions other than
for cash shall be determined by the Company’s Board of Directors. The
Floor Price shall not be adjusted upward in respect of issuances of common stock
that do not result in the Company receiving aggregate consideration in one
transaction or a series of related transactions in an amount equal to at least
$250,000. The “Average Closing Price” shall be determined by the
average closing bid and ask prices for such date as may be determined by the
Company’s Board of Directors. Except for the payment due for services
provided during the year commencing on August 1, 2008, which the Company shall
make promptly upon execution of this Agreement, the Company shall pay Consultant
annually on August 1 for services provided during the next succeeding
term. The good faith determination of the Company’s Board of
Directors of the Floor Price and/or the Average Closing Price shall be binding
upon the parties for purposes of this paragraph 4.
In addition to the foregoing payments,
the Company shall pay for all pre-approved, verifiable out-of-pocket expenses of
Consultant incurred by it in the course of performing services for the Company
under this Agreement, including without limitation legal fees and travel
costs. Consultant shall obtain pre-approval from the Company and
shall submit its receipts to the Company. Company shall make
reimbursement within 10 days of submission of receipts by
Consultant.
5. Options. The
Company shall, within 60 days of the date of this Agreement, issue to
Consultant:
a. 1,000,000
(one million) options or warrants to acquire shares of the Company’s common
stock with an exercise price of $1.00 per share;
b. 1,000,000
(one million) options or warrants to acquire shares of the Company’s common
stock with an exercise price of $2.00 per share;
c. 1,000,000
(one million) options or warrants to acquire shares of the Company’s common
stock with an exercise price of $3.00 per share;
d. 1,000,000
(one million) options or warrants to acquire shares of the Company’s common
stock with an exercise price of $4.00 per share;
e. 1,000,000
(one million) options or warrants to acquire shares of the Company’s common
stock with an exercise price of $5.00 per share.
Such
options or warrants (hereinafter referred to as the “Warrants”) shall be
exercisable for a period of three years from their exercise date and shall have
similar anti dilution adjustments and shall be exercisable on the same terms as
the Warrants issued pursuant to the other consulting agreements entered into by
the Company with Bespoke Advisory Services, LLC and Green Enterprises XXX in
August, 2008. Consultant understands that the Warrants and the shares
issued upon their exercise (the “Shares”) have not been registered pursuant to a
registration statement under the Securities Act.
For the avoidance of doubt, Consultant
and the Company agree that in the event of a termination of their Agreement
prior to the expiration of the three year exercise period for the Warrants
specified above, the Warrants shall remain outstanding until the expiration of
the exercise period of the Warrants.
6. Investment
Intent. Consultant represents and warrants that:
a. Consultant
has acquired the Warrants and Shares to be issued upon exercise of the Warrants
for investment purposes without a view to resell or distribute the
Shares.
b. Consultant
will not effect any sale or other disposition of the Warrants or the Shares
except pursuant to an effective registration statement registering the Shares
under the Act or pursuant to an available exemption from registration including
pursuant to Rule 144 promulgated under the Act.
c. Consultant
is an “accredited investor” as that term is defined under Regulation D
promulgated under the Act.
Consultant
agrees that the Warrants and Shares shall bear a restrictive legend to the
effect that transfer is prohibited except in transactions registered under the
Act, or pursuant to an available exemption from registration including pursuant
to Rule 144 promulgated under the Act.
7. Status. Consultant
is an independent contractor of the Company and this Agreement does not create
any employment relationship. Consultant is an independent business
entity and has absolute control over the actual performance and results of its
work. Consultant is not relying on the Company, except to the extent
the Companies obligated hereunder. Consultant acknowledges that
neither Consultant nor Consultant’s employees shall be considered under the
provisions of this Agreement, or otherwise, as having any employee status with
the Company for any reason, including but not limited to, withholding taxes,
social security and employment contributions, payroll taxes, xxxxxxx’x
compensation insurance, or as being entitled to participate in any plans,
arrangements or distributions by the Company pertaining to or in connection with
any pension, stock, profit sharing, life insurance or similar or other
arrangement.
8. Entire Agreement.
This Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes any and all prior or
contemporaneous representations, warranties, agreements and understandings in
connection therewith. This Agreement may be amended only by a writing executed
by all parties hereto.
9. Assignment. Neither Party
may assign this Agreement without the prior written consent of the
other.
10. Governing Law; Venue;
Jurisdiction. This Agreement has been negotiated and is being contracted
for in the State of Florida. It shall be governed by and interpreted
in accordance with the laws of the State of Florida, regardless of any
conflict-of-law provision to the contrary. In any dispute arising out
of or connected with this Agreement, each party consents to the exclusive
jurisdiction of the courts of the State of Florida or the federal district court
for Florida; each party consents to the personal jurisdiction of such courts;
and each party waives any objection to personal jurisdiction or
venue.
11. Attorney’s
Fees. If any legal action or other proceeding (including but
not limited to binding arbitration) is brought for the enforcement of
or to declare any right or obligation under this Agreement or as a result of a
breach, default or misrepresentation in connection with any of
the provisions of this Agreement, or otherwise because of a dispute
among the parties hereto, the prevailing party will be entitled to recover
actual attorney’s fees (including for appeals and collection and
including the actual cost of in-house counsel, if any) and other expenses
incurred in such action or proceeding, in addition to any other relief to which
such party may be entitled.
12. Authority. The
representatives of each Party executing this Agreement are duly authorized to do
so, and each party has taken all action required for valid
execution.
13. Notices. Any notice under
this Agreement shall be deemed to have been sufficiently given if sent by
registered or certified mail, postage prepaid, or by express mail service
substantially equivalent to Federal Express, addressed as follows:
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To
Consultant: Old Firm Energy
Corporation
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00
Xxxxxxx Xxxx, Xxxxx Xxxxx
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Xxxxxx
Xxxx
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Xxxxxx
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To
Company: Information Systems
Associates, Inc.
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0000
XX 00xx
Xxxxxx, Xxxxx X
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Xxxx
Xxxx, Xxxxxxx 00000
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Telephone:
000.000.0000 Ext. 11
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14. Severability. If
a court of competent jurisdiction determines that any clause or provision of
this Agreement is invalid, illegal or unenforceable, the other clauses and
provisions of the Agreement shall remain in full force and effect and the
clauses and provisions which are determined to be void, illegal or unenforceable
shall be limited so that they shall remain in effect to the extent permissible
by law.
15. Counterparts and
Facsimile. This Agreement may be executed in any number of
identical counterparts, each of which may be deemed an original for all
purposes. A fax, telecopy or other reproduction of this instrument
may be executed by one or more parties hereto and such executed copy may be
delivered by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes.
16. Benefit of
Agreement. The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the Parties, jointly and severally,
their successors, assigns, personal representatives, estate, heirs and
legatees.
17. Captions. The captions in
this Agreement are for convenience and reference only and in no way define,
describe, extend or limit the scope of this Agreement or the intent of any
provisions hereof.
18. Number and
Gender. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the Party or Parties,
or their personal representatives, successors and assigns may
require.
19. Further
Assurances. The
Parties hereby agree to act, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
he required herein to effect the intent and purpose of this
Agreement.
20. Construction. The language in
this Agreement is a product of negotiations and shall be construed as a whole
according to its fair meaning, without implying a presumption that its terms
shall be more strictly construed against either party as drafter of the
document.
21. Waiver of Jury
Trial. EACH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION
OR PROCEEDING INVOLVING THIS AGREEMENT TO THE FULLEST EXTENT SUCH PARTY MAY
LEGALLY AND EFFECTIVELY DO SO.
IN WITNESS WHEREOF, the parties have
executed this agreement below as of the date first set forth above.
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Old
Firm Energy Corporation
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/s/
Xxxx
Xxxxxxxxx By: /s/
Xxxxxx Xxxxxxxx
Xxxx
Xxxxxxxxx,
Director Xxxxxx
Xxxxxxxx, President
