Beryl
Zyskind

150 East
56th Street,
Apt. 7A

New York,
NY 10022

 


	 	November 4, 2004



 

iBIZ
Technology Corp.

2238 W.
Lone Cactus Drive

Phoenix,
AZ 85027




Gentlemen:




This
letter (this “Letter Agreement”) shall confirm the understanding and agreement
by and between Beryl Zyskind directly or through Stonemill Capital, Inc. or his
designees (“Zyskind”) and iBIZ Technology Corp., a Florida corporation (“iBIZ”)
with respect to the initial investment of seventy-five thousand ($75,000)
dollars of the intended aggregate investment of one million five hundred
thousand ($1,500,000) dollars for the purchase of shares of common stock, par
value $.001 of iBIZ (the “Common Stock”). The investment of the balance of one
million four hundred twenty-five thousand ($1,425,000) dollars is subject to
iBIZ’s compliance with the terms of this Letter Agreement and the terms of the
Definitive Agreement (as defined in Article “1” of this Letter Agreement),
including, but not limited to, Articles “3”, “5”, “6” and “8” of this Letter
Agreement.




1.  The
parties understand that this Letter Agreement shall be superseded by a formal
definitive agreement (the “Definitive Agreement”) to be entered into by the
parties based upon substantially similar terms as those set forth in the Letter
Agreement which is attached hereto and made a part hereof as Exhibit “A”.
Zyskind shall have no obligation to advance any portion of the balance of one
million four hundred twenty-five thousand ($1,425,000) dollars unless and until
the Definitive Agreement is entered into by the parties. If the Definitive
Agreement is not entered into, Zyskind’s sole obligation shall be to invest
seventy-five thousand ($75,000) dollars as hereinabove set forth.




2.  The
purchase price per share shall be equal to $.001. 




3.  Zyskind
shall, upon the execution of this Letter Agreement, invest seventy-five thousand
($75,000) dollars in exchange for seventy-five million (75,000,000) shares of
Common Stock at a purchase price of $.001 per share. iBIZ agrees that Zyskind
shall receive the shares of Common Stock with respect to this initial investment
of seventy-five thousand ($75,000) dollars within ten (10) business days after
receipt of the investment by iBIZ. If Zyskind does not receive the shares of
Common Stock within said ten (10) business day period, iBIZ shall issue to
Zyskind for each day that shares are late such number of shares of Common Stock
as shall be equal to one (1%) percent of the number of shares of Common Stock
purchased by Zyskind. For example, if the 75,000,000 shares of Common Stock are
received by Zyskind two (2) days after the ten (10) business day period, iBIZ
shall issue to Zyskind an additional one million five hundred (1,500,000) shares
of Common Stock (determined by (i) multiplying 75,000,000 by 1% and (ii)
multiplying the product of (i) by 2). 

 




















4.  Of the
seventy-five thousand ($75,000) dollars invested upon the execution of this
Letter Agreement, twenty-five thousand ($25,000) dollars shall be paid directly
for IBIZ’s accounting fees.




5.  iBIZ
agrees that it shall file at its expense a registration statement (the
“Registration Statement”) with the Securities and Exchange Commission (“SEC”)
with respect to any shares of Common Stock to be issued to Zyskind as soon as
reasonably possible following the filing with and approval by the SEC of iBIZ’s
amended 10-K and 10-Qs but in no event later than March 31, 2005.




6.  iBIZ
shall use its best efforts to ensure that the Registration Statement is
effective within one hundred twenty (120) days after it has filed the
Registration Statement with the SEC. If the Registration Statement is not timely
filed pursuant to Article “5” of this Letter Agreement or effective within said
one hundred twenty (120) day period, iBIZ shall issue to Zyskind for every
thirty (30) days that the Registration Statement is not timely filed or
effective after the one hundred twenty (120) day period such number of shares of
Common Stock as shall be equal to five (5%) percent of the aggregate number of
shares of Common Stock owned by Zyskind at such time; provided, however, Zyskind
will no longer be entitled to such additional shares at such time as all of the
Common Stock held by Zyskind can be sold under Rule 144(K). For example, if
Zyskind owns an aggregate of seventy-five million (75,000,000) shares of Common
Stock and the Registration Statement becomes effective one hundred eighty (180)
days after it was filed with the SEC, then iBIZ shall issue to Zyskind an
additional seven million five hundred thousand (7,500,000) shares of Common
Stock (determined by (i) multiplying 75,000,000 by 5% and (ii) multiplying the
product of (i) by 2 (determined by (a) subtracting 120 from 180 and (b) by
dividing 60 (the difference) by 30)). As a further example, if the Registration
Statement becomes effective forty-five (45) days after it has been filed with
the SEC, then iBIZ shall not owe Zyskind any shares of Common Stock.





7.  iBIZ
agrees and acknowledges that Zyskind shall have the right to designate two (2)
members of iBIZ’s Board of Directors which shall consist of no more than five
(5) directors and that the two (2) directors designated by Zyskind, together
with Bryan Scott (“Scott”) and one (1) director appointed by Scott shall
designate the fifth (5th)
director.




8.  iBIZ
further agrees and acknowledges that for a period commencing as of the date
hereof and continuing until twenty-four (24) months after the investment of the
aggregate amount of one million five hundred thousand ($1,500,000) dollars, it
shall not:




A.  Conduct
its business in any manner other than in the ordinary course;




B.  Take any
action which would cause it to be removed, or fail to take any action which is
necessary to prevent it from being removed, from the Over the Counter Bulletin
Board, or be removed from the Over the Counter Bulletin Board for any
reason;




C.  Issue any
securities, options, warrants or other rights to acquire any of its securities
in connection with any financing without the prior written consent of the new
iBIZ Board of Directors;

 







2












D.  Increase
the compensation payable or to become payable to any of its officers or
directors or any immediate family of any officer or director, including, but not
limited to, the following: any spouse, parent, spouse of a parent,
mother-in-law, father-in-law, child, spouse of a child, sibling, spouse of a
sibling, grandparent, spouse of a grandparent or any issue of the foregoing
without the prior written consent of the new iBIZ Board of
Directors;




E.  Convert
any of the debt held by Laurus Master Fund, Ltd into shares of Common Stock
without the prior written consent of the new iBIZ Board of
Directors;




F.  Mortgage,
pledge or subject to lien, charge or any other encumbrance, any of its tangible
or intangible assets without the prior written consent of the new iBIZ Board of
Directors;




G.  Sell,
liquidate, or otherwise dispose of any of its assets, other than in the ordinary
course of business without the prior written consent of the new iBIZ Board of
Directors; 




H.  Borrow or
guarantee the borrowing of money without the prior written consent of the new
iBIZ Board of Directors; and




I.  Enter
into any agreement of merger, reorganization or consolidation with or into
another entity or entities, regardless of whether iBIZ is the surviving entity
without the prior written consent of the new iBIZ Board of
Directors.




9.  iBIZ
agrees that it shall pay all legal fees and costs incurred by Zyskind with
respect to this transaction and that said legal fees and cost shall be deducted
from all future payments made by Zyskind pursuant to the terms of this Letter
Agreement and as deemed reasonable by the parties.




10.  iBIZ
represents and warrants that it has the full right, power and legal capacity to
enter into this Agreement and to consummate the transactions contemplated hereby
and that the execution and delivery of this Agreement by it and the consummation
by it of the transactions contemplated hereby have been duly approved and
authorized by all necessary action of its Board of Directors, and no further
authorization shall be necessary on its part for the performance and
consummation by it of the transactions contemplated hereby. iBIZ shall provide
Zyskind with a certified copy of the resolution authorizing the transaction
contemplated hereby upon his request, in such form as is acceptable to
him.




This
Letter Agreement contains the entire agreement between the parties and
supersedes all prior agreements and understandings. This Letter Agreement may
not be altered, changed or modified, except by a written instrument signed by
each of the parties to this Letter Agreement. The validity, interpretation, and
performance of this Letter Agreement shall be controlled by and construed under
and in accordance with the laws of the State of New York without giving effect
to conflict of laws. The parties hereby consent to and submit to personal
jurisdiction over each of them by the courts of the State of New York in any
action or proceeding, waive personal service of any and all process and
specifically consent that in any such action or proceeding, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested. This Letter Agreement shall be binding upon each of the parties to
this Letter Agreement, and upon their respective successors and assigns.











3












If this
Letter Agreement accurately reflects our agreement, please sign where indicated
below. 





	 	 	Sincerely,
	 	 	 
	 	 	/s/
      Beryl Zyskind  
	 	 	Beryl Zyskind
	 	 	 
	Agreed and Accepted:	 	 
	 	 	 
	iBIZ Technology Corp.	 	 
	 	 	 
	By: /s/
      Kenneth Schilling__________________	 	 
	Name: Kenneth Schilling Title:
      President and CEO	 	 
	 	 	 
	/s/ Kenneth Schilling ____________________	 	 
	Ken Schilling	 	 
	 	 	 
	/s/ Mark Perkins_________________________	 	 
	
      Mark
      Perkins
	 	 












4