CONSULTING AND FINDERS AGREEMENT
This CONSULTING AND FINDERS AGREEMENT (this "AGREEMENT") dated February 13,
2002, is entered into by and between Xxx Xxxxx, an individual, whose address is
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 ( "CONSULTANT"),
and Sensar Corporation, a Nevada corporation (the "COMPANY"), whose address at
the effective time of this Agreement shall be Xxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000.
RECITALS:
WHEREAS, the Company has entered into an Agreement and Plan of Merger dated
February 13, 2002 (the "MERGER AGREEMENT"), pursuant to which VitalStream
Operating Corporation, a Delaware corporation and wholly-owned subsidiary of the
Company ("MERGER SUB") has agreed to merge (the "MERGER") with and into
VitalStream, Inc., a Delaware corporation ("VITALSTREAM"); and
WHEREAS, Consultant provided certain finders services to the Company in
connection with the Merger, and the Company and Consultant desire to memorialize
their agreement with respect to Consultant's finders' fee; and
WHEREAS, Consultant has experience in investor relations, and the Company
and Consultant desire for Consultant to provide ongoing investor relations
services to the Company.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Consultant hereby agree as follows:
1. FINDERS AGREEMENT. Consultant has provided certain finders services to
the Company in connection with his identification of VitalStream as a potential
merger candidate and in structuring such transactions. As consideration for such
services, the Company shall issue to Consultant, when and if the Merger (or a
similar merger, asset sale, or other consolidation transaction involving the
consolidation of VitalStream and the Company) is consummated, a finders fee
equal to 306,250 shares (the "Shares") of common stock, $.001 par value, of the
Company.
2. CONSULTING.
(a) CONSULTANT SERVICES. Effective as of the time the Merger becomes
effective (the "EFFECTIVE TIME"), Consultant is hereby engaged as an outside
consultant to the Company, and, as requested by the Company, subject to the
terms and conditions of this Agreement, Consultant shall provide advice and
information to the Company regarding investor relations (the "SERVICES")
throughout the Term (as defined below). Consultant shall provide the Services
when and as reasonably requested by the Company, up to a maximum of 20 hours per
month. Consultant shall receive reasonable prior notice of each time Consultant
is being asked to perform Services.
(b) TERM. This Agreement shall be valid and binding on the parties
hereto as of the date first set forth above; provided, however, none of the
affirmative covenants hereunder shall be effective unless and until the Merger
is consummated. If (a) the Merger Agreement is terminated pursuant to Article
VII thereof, or (b) the Merger is not consummated by June 30, 2002, the
affirmative covenants in this Agreement shall not become effective, and this
Agreement shall be void ab initio. If the Merger Agreement is consummated, the
affirmative covenants of this Agreement shall be effective during the period
commencing at the Effective Time and continuing until December 31, 2002 (the
"TERM").
(c) COMPENSATION. In consideration of Consultant's service, the
Company shall execute and deliver to Consultant on or as soon as is practicable
after the Effective Time (i) a Stock Purchase Warrant in the form attached
hereto as EXHIBIT A, and (b) a Registration Rights Agreement in the form
attached hereto as EXHIBIT B.
3. MANNER OF SERVICES. Consultant shall provide the Services to the
Company in the highest quality manner and shall adhere to professional standards
customary for other professionals performing similar functions. Consultant
agrees to devote such time and attention, up to a maximum of 20 hours per month,
as is necessary and appropriate to perform the Services on a timely basis and in
a professional manner.
4. INDEPENDENT CONTRACTOR.
(a) Consultant will not be an employee of the Company for any purpose
whatsoever, but will be an independent contractor for all purposes, including
with respect to workers' compensation laws, unemployment insurance laws, Social
Security laws, and the United States Internal Revenue Code. For that reason, no
payroll deductions or payments will be made by the Company for unemployment
insurance, workers' compensation, Social Security, or taxes. Consultant
understands and agrees that Consultant shall be responsible for his federal,
state and local income taxes, self-employment taxes, Social Security taxes, and
any other taxes and that the Company may be required to report his payments to
Consultant to taxing authorities.
(b) Consultant shall act as and be an independent contractor and shall
not be subject to the supervision or control of the Company and shall generally
have control and responsibility for when, where and how the Services are to be
performed, so long as the Services are performed within the reasonable time
constraints set by the Company consistent with the needs of the Company for the
Services as contemplated under this Agreement. The Company shall not have any
obligation to provide office space, equipment, support staff, supplies, or
facilities to enable Consultant to perform the Services under this Agreement
(except that the Company shall reimburse Consultant for all pre-approved travel
expenses incurred in connection with the Services).
(c) Consultant shall not be an agent of the Company and shall have no
right or authority to act on behalf, bind or incur any obligations whatsoever on
behalf or in the name of the Company.
5. INVESTMENT REPRESENTATIONS. Consultant represents and warrants to the
Company as follows:
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(a) AUTHORIZATION. This Agreement constitutes Consultant's valid and
legally binding obligation, enforceable in accordance with its terms subject to
applicable bankruptcy, insolvency, and other similar laws affecting creditors'
rights, and rules of law governing specific performance, and Consultant has full
power and authority to enter into this Agreement.
(b) REPRESENTATIONS NOT MADE BY COMPANY. Consultant represents and
affirms that none of the following information has ever been represented,
guaranteed or warranted to Consultant, expressly or by implication, by any
person: (i) the approximate or exact length of time that Consultant will be
required to remain a security holder of the Company; (ii) the percentage of
profit and/or amount of or type of consideration, profit or loss to be realized,
if any, as a result of an investment in the Company and VitalStream
(collectively, the "MERGING COMPANIES"); or (iii) the possibility that the past
performance or experience on the part of the Merging Companies or any affiliate,
or any officer, director, employee or agent of the foregoing, might in any way
indicate or predict the results of ownership of any Security or the potential
success of the Merging Companies' operations.
(c) FOR OWN ACCOUNT. Consultant is the sole and true party in
interest, is acquiring the Shares, the Warrants and the shares of common stock,
$.001 par value, of the Company that may be obtained upon exercise of the
Warrants (the "SECURITIES") for his own account for investment, is not
purchasing the Securities for the benefit of any other person, and has no
present intention of holding or managing the Securities with others or of
selling, distributing or otherwise disposing of any portion of the Securities.
Xxx Xxxxx is a resident of the State set forth in the first paragraph of this
Agreement.
(d) DISCLOSURE AND REVIEW OF INFORMATION. Consultant acknowledges and
represents that he has received and reviewed a copy of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2001, has been given
a reasonable opportunity to review all documents, books and records of the
Merging Companies pertaining to this investment, has been supplied with all
additional information concerning the Merging Companies and the Securities that
has been requested by Consultant, has had a reasonable opportunity to ask
questions of and receive answers from the Merging Companies or its
representatives concerning this investment, and has had all such questions
answered to the full satisfaction of Consultant. Consultant has received, and
acknowledges that he is receiving, no representations, written or oral, from the
Merging Companies or its officers, directors, employees, attorneys or agents
other than those contained in this Agreement and the written materials provided
by the Merging Companies. In making his decision to purchase the Securities,
Consultant has relied solely upon his review of this Agreement, the written
material provided by the Merging Companies and independent investigations made
by he or his representatives without assistance of the Merging Companies.
(e) SPECULATIVE INVESTMENT. Consultant understands that (i) he must
bear the economic risk of the investment in the Securities for an indefinite
period of time, and (ii) his investment in the Company represented by the
Securities is highly speculative in nature and is subject to a high degree of
risk of loss in whole or in part. Consultant has adequate means of providing for
his current needs and possible contingencies, and is able to bear the high
degree of economic risk of this investment, including, but not limited to, the
possibility of the complete loss of Consultant's entire investment.
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ACCREDITED INVESTOR STATUS. Consultant is familiar with the definition
of "accredited investor" within the meaning of Rule 501(a) promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), and Consultant is an
accredited investor in that Consultant is either (i) a natural person whose
individual net worth, or joint net worth with his spouse, at the time of his
purchase exceeds $1,000,000, or (ii) a natural person who had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with his spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year.
(f) RESTRICTED SECURITIES. Consultant understands that the Securities
will be "restricted securities," as defined in Rule 144 under the Securities
Act, and that the Securities may not be sold unless such resale is registered
under the Securities Act or an exemption from the registration requirements is
available. A legend evidencing such restrictions will be placed on all
agreements or certificates representing the Securities.
(g) INVESTMENT EXPERIENCE. Consultant has experience as an investor in
securities and acknowledges that Consultant can bear the economic risk of his
investment in the Securities. By reason of Consultant's business or financial
experience or the business or financial experience of his professional advisors
who are unaffiliated with and who are not compensated by the Merging Companies
or any affiliate or selling agent of the Merging Companies, directly or
indirectly, Consultant has the capacity to protect his own interests in
connection with his purchase of the Securities.
6. MODIFICATION; WAVIER; DISCHARGE. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by each of the parties hereto. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
7. CONFIDENTIALITY.
(a) Consultant recognizes that during the course of providing the
Services, Consultant may review, receive and otherwise obtain confidential or
proprietary information and materials from the Company and VitalStream,
including information relating to inventions, patent, trademark and copyright
applications, improvements, know-how, source code, specifications, drawings,
cost and pricing data, process flow diagrams, bills, customer and vendor lists,
ideas, business plans and/or any written material or electronic storage mediums
referring to or containing same (the "CONFIDENTIAL INFORMATION").
Notwithstanding the foregoing, the Confidential Information shall not include
any information that (i) is made public by an act or omission of the Company or
its authorized representative, (ii) is received from an unrelated third party
that (after due and reasonable inquiry) Consultant determines is not bound by an
obligation of confidentiality, or (iii) is required to be disclosed pursuant to
a court order (provided that Consultant shall give the Company five days prior
written notice prior to making a disclosure under this subsection (iii)).
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(b) Consultant covenants and agrees that during the term of this
Agreement and forever after his termination or expiration, Consultant (1) shall
not disclose the Confidential Information to any person or entity other than
employees of the Company in the course of providing the Services, (2) shall not
use such Confidential Information for the benefit of Consultant's own business
or for the benefit of any person or entity other than the Company, and (3) upon
request, shall promptly return to the Company any materials, including all
memoranda, computer disks or other storage media, drawings, patent, trademark
and copyright applications, specifications and process or flow diagrams,
including any copies, notes, or memoranda made by Consultant, that in any way
relate to the Confidential Information.
8. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of Consultant and
the Company. No party may assign this Agreement or the rights granted hereunder
without the prior written consent of the all parties.
9. COMPLETE AGREEMENT. The Company and Consultant acknowledge that this
Agreement, including EXHIBITS A and B attached hereto, contains the full and
complete agreement between the parties with respect to the subject matter
contained herein and that there are no oral or implied agreements or other
modifications not specifically set forth herein or therein. This Agreement shall
supersede and replace all prior agreements between the Company and Consultant.
Consultant acknowledges and agrees that, except as may arise under this
Agreement, the Company does not and shall not have any liability or obligation
whatsoever to Consultant, including, without limitation, any liabilities to pay
any finders fee with respect to the Merger, and Consultant hereby releases the
Company from any obligations or liabilities whatsoever other than obligations or
liabilities arising under this Agreement.
10. COUNTERPARTS. This Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without regard to its conflicts-of-law principles, and each party
hereby expressly submits themselves to the exclusive, personal jurisdiction of
the courts situate in the State of California, with respect to any and all
claims demands and/or causes of action asserted or filed by any party in any way
relating to, or arising out of, this Agreement or the subject matter hereof.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, Consultant and the Company have executed this
Consulting and Finders Agreement as of the date first above written.
COMPANY:
SENSAR CORPORATION
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Chief Operating Officer
CONSULTANT:
/s/ Xxx Xxxxx
-----------------------------------
Xxx Xxxxx
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EXHIBIT A
(Stock Purchase Warrant)
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EXHIBIT B
(Registration Rights Agreement)
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