Xxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
Integral Technologies, Inc.
000 X. Xxxxxxx Xxxxx
Xxxxx 0
Xxxxxxxxxx XX 00000
February 16, 2007
Bill:
This letter sets forth the terms of the agreement for Visionary Innovations Inc.
("Visionary" or the "Advisor"), as the Advisor, to render strategic and
consulting services to Integral Technologies, Inc. ("Integral" or the "Company")
(the "Agreement").
1) BUSINESS ACTIVITIES
--------------------
Visionary agrees to provide the following services to the Company pursuant to
the terms of this agreement:
a) Research of Business Channels - Visionary will assist the Company
in its research of potential business channels for the Company's
products, evaluate such channels and provide recommendations to
the Company.
b) Strategic and Negotiation Consultation - Upon request by the
Company, Visionary will be available to provide strategic and
negotiation consulting advice to the Company. This may include,
but not be limited to, such things as:
i) Planning for and participating in major negotiation with
vendors, suppliers and clients
ii) Reviewing the business and operations plan, strategic growth
plan, and/or financial plan of the Company
iii) Supporting Board and Investor meetings, either by
teleconference or in person
iv) As needed, provide telephonic consultation relating to time
sensitive business decisions
c) Distributor/Client Support - Visionary will review with the
Company potential new distributors and clients, provide an
evaluation of such organizations, help develop agreements for
sales and assist where needed in negotiations for such
agreements.
d) Governmental Channels and Research - Visionary will assist the
Company in developing a program to introduce the Company's
products to various targeted governmental agencies for the
purpose of product sales as well as for potential research grants
to enhance or extend the Company's product line.
INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
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e) Manufacturing Expansion - Visionary will advise the Company in
discussions regarding expanding the production capabilities of
the Company and will assist in developing a manufacturing plan
once alternatives are chosen.
f) International Licensees and Distributors - Visionary will provide
initial research into potential international licensees and
distributors, evaluate such organizations and provide input as to
the development of any agreements.
g) Client Introductions - Visionary will assist the Company by
providing potential sales leads from its internal and affiliate
relationships.
h) Exit Planning - Visionary will work with the Company to define
various potential exit event scenarios, hold discussions
regarding the viability of such events and help the Company
prepare any developmental activities necessary to enhance the
possibilities of those events happening.
i) Other Services - Visionary will assist the Company with other
services as mutually agreed to by the parties during the term of
this Agreement.
2) EXECUTIVE MANAGEMENT
---------------------
Xxxxxxxxx will be responsible for reporting directly to the CEO of the
Company and all activities shown above will be provided in a direct working
relationship with the CEO and others as designated by the Company in its
discretion. Visionary will establish and provide an executive management
team to the Company to support the services outlined above, subject to the
approval of the Company. Xxxxxxxxx's executive management team shall, at
all times during the term of this Agreement, be headed by Xxxxx Xxxxxxx.
3) BUSINESS ACTIVITIES AND EXECUTIVE MANAGEMENT FEES
------------------------------------------------------
Prior to the termination of this Agreement pursuant to Section 4, the
Company will agree to pay to Visionary for its ongoing executive management
services:
a) a three year contract beginning on the signing of this contract
b) 50,000 shares upon signing of the contract on February 16, 2007
and another 50,000 shares on February 16, 2008 and another 50,000
shares on February 16, 2009
c) 125,000 options which vest on February 17, 2007 at a price of
$2.75.
d) 125,000 options which vest on February 17, 2008 at a of $2.75.
Business Development Fee - The Company will pay to Visionary a
fee equal to 2% of Net Revenue (as defined below) actually paid
to the Company by new clients or other persons directly
introduced by Visionary under this Agreement (each, a "Third
Party"); provided, however, that Visionary shall only be entitled
to receive the fee described in this Section 3(c) if it first
identifies the name of the Third Party in writing prior to
engaging in negotiations with such Third Party with respect to
consummation of a commercial transaction between the Third Party
and the Company, and the Company approves the Third Party in
writing; provided further, however, that Visionary shall not be
entitled to
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INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
-----------------------------------------------
receive the fee provided for under this Section 3(c) with respect
to any person with whom the Company had a pre-existing
relationship prior to the date of this Agreement, including,
without limitation, the entities and other persons set forth on
Exhibit A attached hereto unless the Company requests in writing
Visionary's participation with such relationship. For purposes of
this Agreement, the term "Net Revenue" shall mean revenue
actually received by the Company from Third Parties in respect of
sales of the Company's products and/or services, license fees, or
research grants, net of taxes payable by the Company with respect
to such amounts and all direct costs incurred by the Company in
generating such revenue (including, without limitation, expenses
paid to Visionary pursuant to Sections 6 of this Agreement)
e) In addition to the above, Integral Technologies will pay a 2
(two) percent fee on gross monies raised through private
financings in which Visionary Innovations is the introducing
party. This is subject to the above stipulations.
4) TERM
----
a) Unless earlier terminated pursuant to Section 4(b) or 4(c) below,
the initial term of the Agreement shall begin on the execution
hereof and continue for an initial period of one (1) year (the
"Initial Term"). Unless terminated by either party at least
thirty (30) days prior to the end of the initial one (1) year
term, this Agreement will automatically be renewed for successive
one-year periods (each a, "Successive Term" and, together with
the "Initial Term," the "Term").
b) This Agreement may be terminated without Cause (as defined in
Section 4(c) below) by either party prior to the end of the Term
at any time upon thirty (30) days prior written notice, given at
any time but not prior to ninety (90) days from the starting
date. Visionary agrees to continue to provide regular services
and support activities during the thirty (30) day notification
period.
c) This Agreement may be terminated by the Company prior to the end
of the Term for Cause immediately upon notice to Visionary. For
purposes of this Agreement, the term "Cause" shall mean shall a
good faith determination by the Company that there has been: (i)
a failure by Visionary to perform its duties hereunder after
notice of such failure from the Company, if such failure has not
been cured within ten (10) days after receipt of such notice,
(ii) any act by, or an event with respect to, Visionary involving
embezzlement, theft, material dishonesty, or material harm to the
Company's reputation, or a conviction of or plea of nolo
contendere to a crime involving moral turpitude or a felony of
any of the principals of Visionary, or (iii) any breach of this
Agreement by Visionary, if such breach has not been cured within
ten (10) days after receipt of such notice.
d) Upon any termination of this Agreement, all obligations of the
parties shall end; provided, however, that no such termination
shall affect the obligations of Visionary pursuant to Section 7
below, the indemnification obligations of the Company or
Visionary set forth in Section 8 below, or the right of Visionary
to receive any retainer and performance fees earned and payable
during the term of this Agreement or the right of Visionary to
receive reimbursement for its out-of-pocket expenses previously
incurred as described below in Section 6. The Company will
continue to pay Visionary
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INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
-----------------------------------------------
the fees earned in Section 3(c) for all agreements signed before
the termination of this Agreement for the duration of such
contract.
5) REPORTS AND MEETINGS
----------------------
a) Visionary shall, at its expense, provide the Company with the
following full and complete reports during the term of this
Agreement: (i) written periodic reports summarizing Visionary's
efforts with respect to the services described in Section 1
above; (ii) market information from reports which Visionary
receives from time to time; and (iii) such other reports as
mutually agreed upon by the parties.
b) Visionary's executive management team and the Company shall
maintain a close working relationship which shall include
periodic meetings during which the business activities undertaken
by Visionary pursuant to this Agreement shall be reviewed and
discussed.
6) EXPENSES
--------
The Company will reimburse Visionary, upon its request, for all
reasonable out of pocket expenses, including economy travel, incurred by it
in connection with performing services as outlined in this Agreement,
provided that any single expense in excess of $500, or any single event
expense in excess of $1,000 will require the prior written consent of the
Company, and aggregate expenses in excess of $15,000 during the Initial
Term or any Successive Term will also require the prior written consent of
the Company.
7) INFORMATION AND CONFIDENTIALITY
---------------------------------
a) Visionary agrees that all non-public information pertaining to
the prior, current or contemplated business of the Company are
valuable and confidential assets of the Company. Such information
shall include, without limitation, information relating to
customer lists, bidding procedures, intellectual property, trade
secrets, financing techniques and sources and such financial
statements of the Company as are not available to the public.
Visionary shall hold all such information provided to it in trust
and confidence for the Company and shall not use or disclose any
such information to any other person except with the prior
consent of the Company. The terms of this Agreement and the
relationship of the parties shall also be governed by the
Confidentiality Agreement between the Company and Visionary dated
January 31, 2006 (the "Confidentiality Agreement"). In the event
of any conflict between the terms of this Agreement and the terms
of the Confidentiality Agreement, the terms of the
Confidentiality Agreement shall govern.
b) Upon request from the Company during or upon the termination of
this Agreement, Visionary will provide the Company any and all of
its work product information related to the services provided
under this Agreement.
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INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
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c) Visionary acknowledges that any breach of this Section 7 may
cause immediate and irreparable injury to the Company and that
monetary damages may be inadequate to compensate the Company for
such breach. Having acknowledged the foregoing, Visionary agrees
that, in the event of such breach, the Company shall be entitled
to injunctive relief, in addition to all other remedies available
to it at law or in equity. This Section in no way limits the
liability or damages that may be assessed against Visionary in
the event of a breach of any of the provisions of this Section 7.
8) INDEMNIFICATION
---------------
The Company and Visionary mutually agree to defend, indemnify and hold
each other and their directors, officers, employees and agents, harmless
from and against any and all claims or liability arising out of their
performance under this Agreement except to the extent such claims or
liability result from the gross negligence or willful misconduct of the
party claiming indemnification rights.
9) INDEPENDENT CONTRACTOR
-----------------------
It is expressly understood and agreed that Visionary shall, at all
times, act as an independent contractor with respect to the Company and not
as an employee or agent of the Company, and nothing contained in any
agreement shall be construed to create a joint venture, partnership,
association or other affiliation, or like relationship, between the
parties.
10) AMENDMENT
---------
No modification, waiver, amendment, discharge or change of this
Agree-ment shall be valid unless the same is evidenced in writing and
signed by the parties.
11) NOTICES
-------
All notices given shall be in writing and shall be deemed to have been
provided when delivered by certified or overnight mail to the primary
business addresses of the other party.
12) ENTIRE AGREEMENT
-----------------
This Agreement contains all of the understandings and agreements of
the parties with respect to the subject matter discussed herein. All prior
agreements, whether written or oral, are merged herein and shall be of no
force or effect.
13) SEVERABILITY
------------
The invalidity, illegality or unenforceability of any provision or
provisions of this Agreement will not affect any other provision of this
Agreement, which will remain in full force and effect, nor will the
invalidity, illegality or unenforceability of a portion of any provision of
this Agreement affect the balance of such provision.
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INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
-----------------------------------------------
14) CONSTRUCTION AND ENFORCEMENT; VENUE
--------------------------------------
This Agreement shall be construed in accordance with the laws of the
State of Washington, without application of the principles of conflicts of
laws. The parties agree to exclusive jurisdiction of the state and federal
courts in Whatcom County, Washington, each party submits to the
jurisdiction of those courts, and each party agrees not to object to venue
before such courts.
15) BINDING NATURE
---------------
The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties, and their respective successors and
assigns. Visionary cannot assign the work requirements of this Agreement
without prior consent of the Company.
16) COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, including
facsimile signatures, which shall be deemed as original signatures. All
executed counter-parts shall constitute one Agreement, notwithstanding that
all signatories are not signato-xxxx to the original or the same
counterpart.
17) ASSIGNMENT
----------
Visionary shall not assign or delegate any of its obligations under
this Agreement without the prior written consent of the Company which shall
not be unreasonably withheld, including through a transfer of greater than
fifty percent (50%) of the ownership interest of Visionary, through a
merger, consolidation or otherwise, or otherwise by operation of law. Any
assignment or delegation in contravention of this provision shall be null
and void. Except as provided in the preceding sentences, all the terms and
provisions of this Agreement will be binding upon and inure to the benefit
of and be enforceable by the parties and their respective successors and
permitted assigns.
18) AUTHORIZATION
-------------
The Company represents and warrants that it has the requisite power
and authority to enter into and carry out the terms and conditions of this
Agreement.
19) NON-WAIVER
----------
The failure by either party hereto at any time to require performance
by the other party or to claim a breach of any provision of this Agreement
shall not be construed as affecting any subsequent breach or the right to
require the performance with respect thereto or to claim a breach with
respect thereto.
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INTEGRAL TECHNOLOGIES INC. - BUSINESS AGREEMENT
-----------------------------------------------
20) COMPLIANCE WITH LAWS
----------------------
Visionary hereby represents and warrants that the conduct of its
business is in compliance with all applicable laws, and Visionary has
obtained, and will maintain during the term of this Agreement, all licenses
necessary for the conduct of its business.
Please confirm that the foregoing correctly set forth our agreement by signing
and returning to us a copy of this Agreement.
Sincerely,
/s/ Xxxxx Xxxxxxx
Mr. Xxxxx Xxxxxxx
Chief Executive Officer and Owner
Visionary Innovations Inc.
0000 Xxxxx Xxxxx Xxxx.
Penthouse D
Boca Raton Florida 33432.
Accepted By:
/s/ Xxxxxxx X. Xxxxxxxx
___________________________
Xxxxxxx Xxxxxxxx
Chairman and Chief Executive Officer
Integral Technologies Inc.
Date: 2/16/07
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