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EXHIBIT 10.20
LOAN OUT AGREEMENT
THIS AGREEMENT is made as of the 1st day of November, 1999 (the
"Effective Date"), by and between eSAT, Inc., a Nevada corporation ("eSAT") and
Vantage Capital Corp., a California corporation (the "Corporation"), with
respect to the following facts:
A. eSAT is a publicly owned company providing satellite Internet and
Digital Delivery Services and products.
B. Xxxxxxx X. Xxxxxx, who is employed by the Corporation, has
considerable management and business experience with respect to
the operations of publicly owned companies.
C. eSAT and the Corporation desire to enter into an agreement whereby
the Corporation will loan out the services of Xxxxxxx X. Xxxxxx
("The CEO") as Chief Executive Officer of eSAT Inc.
The parties agree as follows:
1. CEO'S RELATIONSHIP AND RESPONSIBILITIES.
(a) CEO shall use his best efforts to provide such services as may be
assigned to him from time to time by, and at the sole and
exclusive discretion of the Board of Directors of eSAT. It is
contemplated that such services will include a policy making
function concerning the organization and management of eSAT that
generally would be attributable to a company's chief executive
officer.
(b) CEO shall remain an employee of the Corporation and is not and
shall not be construed to be an employee, partner, joint venture,
agent, representative or participant of or with eSAT pursuant to
this Agreement.
(c) During the term of this Agreement, CEO shall devote such time to
the performance of services contemplated by this Agreement as is
reasonably necessary for a satisfactory performance. Without
limiting the foregoing, CEO shall not, except upon the prior
written consent of eSAT in each instance, perform any services
similar to those contemplated to be performed by CEO under this
Agreement for any individual or entity engaged in any business
which is the same as or similar to the business engaged in any
time during the term of this Agreement by eSAT. In no event shall
CEO engage in activities adverse to eSAT's interests.
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(d) The Corporation hereby warrants it is a corporation duly organized
and existing under the laws of California, that CEO is its
employees and that it has the power and authority to contract for
CEO services as provided herein. The Corporation further
represents that there is no agreement preventing the fulfillment
of this Agreement or which shall impair of diminish the value of
the rights granted under this Agreement.
(e) The obligations of eSAT under this Agreement are subject to CEO
entering into a Confidentiality and Indemnification Agreement in
the form attached hereto as Addendum B of this Agreement.
2. COMPENSATION.
(a) Base Fee. In consideration of all services performed by CEO under
this Agreement, the Corporation shall be entitled to receive a
consulting fee of $25,000 per month payable on the last day of
each month during the term of this Agreement.
(b) Incentive Payment. Within thirty (30) days following the close of
each year of the services under this Agreement, eSAT shall pay the
Corporation an incentive payment in an amount equal to three (3%)
percent of the increase in eSAT's shareholder value, if any,
experienced during such year of services. For this purpose, eSAT's
shareholder value shall be determined as of each of the first and
last day of the applicable year of services as follows.
Total number of eSAT's common stock shares outstanding on
such date, as determined for purposes of computing eSAT's
basic earnings per share in accordance with generally
accepted accounting principles
Multiplied by
The bid price per share for eSAT's common stock on such
date.
If the CEO serves for less than twelve (12) months during the
final year of this Agreement, then the Corporation will be paid a
pro rata share of the full-year incentive payment based upon time
actually served by the CEO during such final year.
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(c) Expenses. CEO shall be entitled to incur necessary and reasonable
travel expenses to perform his duties under the Agreement as
authorized by the Board of Directors. CEO shall furnish
appropriate proof of such expenses as are requested by eSAT and
will be reimbursed for such expenses on a monthly basis.
(d) Grant of Stock Options. In further consideration of the foregoing,
eSAT hereby grants to the Corporation an option to purchase an
aggregate of 1,000,000 shares of eSAT's Common Stock at an
exercise price of Three Dollars ($3.00) per share. Such option
shall vest and become exercisable in accordance with the terms and
conditions set forth in the Stock Option Agreement, which is
attached hereto as Addendum A of this Agreement.
(e) Throughout the term of this Agreement, eSAT shall provide CEO with
the use of an automobile and driver.
(f) As a non-employee of the Corporation, CEO shall not be eligible to
participate in fringe benefit, welfare benefit, retirement benefit
or deferred compensation plans or programs of eSAT other than as
provided herein or as authorized by the Board of Directors.
3. CONFIDENTIAL DATA.
(a) The Corporation acknowledges that CEO and/or it may from time to
time receive certain non-public information ("Proprietary
Information") including, without limitation, trade secrets,
proprietary know-how, names of customers, and other matters
relating to eSAT's business or eSAT's suppliers or customers. The
Corporation expressly agrees that neither it nor any of its
employees or agents shall communicate, disclose or make available
all or any party of the Proprietary Information to any third
party, except, when necessary, in furtherance of eSAT;s business.
The Corporation agrees that it shall use its best efforts to
prevent, inadvertent disclosure of the Proprietary Information to
any third party. The Corporation further agrees that it shall not
copy or use, nor permit others to copy or use, directly or
indirectly, the Proprietary Information other than for the purpose
of the transactions contemplated by this Agreement. Should CEO
conceive any invention as a result of reviewing the Proprietary
Information or rendering services to eSAT hereunder, the
Corporation agrees to assign or to cause to be assigned such
invention to eSAT.
(b) The Corporation agrees and acknowledges that the Proprietary
Information and all copies of and written materials summarizing,
describing or relating to such information, whether supplied by
eSAT or others or compiled by CEO shall be the property of eSAT
and shall be returned promptly to eSAT upon termination or
expiration.
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(c) The parties agree that the public disclosure by eSAT of any part
of the Proprietary Information will release the Corporation from
the foregoing obligations only with respect to that portion of the
Proprietary Information actually disclosed by eSAT.
(d) Each of the parties agrees that it shall not disclose any of the
terms or provisions of this Agreement to any third party except
with the prior written consent of the other party hereto or as may
be required by applicable law.
(e) Injunctive Relief. The Corporation hereby acknowledges that the
loss to eSAT which would arise from a material breach of the
confidentiality obligations provision contained in this Agreement
cannot be reasonably or adequately compensated in damages in an
action at law. The Corporation therefore expressly agrees eSAT in
addition to any other rights or remedies which it may possess,
shall be entitled to injunctive relief to prevent a breach of the
confidentiality obligations provision contained in this Agreement.
(f) The provisions of this Section 3 shall survive the termination or
expiration of this Agreement.
4. USE OF ESAT'S OR CEO'S NAME.
Neither the Corporation nor CEO shall not use the name or trademarks of
eSAT on any written document, stationery, business cards, advertisement,
building directory, telephone directory, office door, or in any other
manner without the prior written consent of eSAT.
eSAT shall not use the name or trademarks of either the Corporation or
CEO on any written document, stationery, business cards, advertisement,
building directory, telephone directory, office door, or in any other
manner without the prior written consent of the Corporation except where
the use may be required by applicable law.
5. TERM OF AGREEMENT, TERMINATION.
(a) The term of this Agreement (the "Loan Out Term") shall be for a
period of thirty six (36) months, commencing on the Effective Date
and continuing through and including October 31, 2002, unless
otherwise terminated as provided in this Section.
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(b) Either party may terminate this Agreement with or without cause at
any time upon 30 days' advance written notice and the Agreement
shall then terminate at the end of the 30-day period. In the event
the Agreement is terminated by eSAT prior to October 31, 2002, the
Corporation shall receive compensation, pursuant to Section 2 (a)
for one year with no further obligation to perform services
hereunder.
(c) As a material inducement to eSAT to enter into this Agreement, the
Corporation expressly agrees that eSAT shall have no obligation to
extend the term of this Agreement beyond the initial Term stated
herein and that, notwithstanding any particular circumstances of
the Corporation's or CEO's investment or expenditure of time, or
effort in connection with the performance of the Corporation's
duties under this Agreement, any termination or expiration of this
Agreement in accordance with this Section 5 shall be without
liability of eSAT to the Corporation by reason of any such
termination or expiration. The Corporation expressly acknowledges
that eSAT has not made any representations as to the possible or
expected duration of this Agreement, except as provided herein.
(d) Upon the expiration or termination of this Agreement, the
Corporation and CEO shall immediately (i) discontinue all use of
eSAT's name and any and all trademarks, trade names or
designations of origin owned or used by eSAT or eSAT's suppliers;
(ii) return to eSAT all literature, advertising and promotional
material, displays, business cards and similar items which may
have been furnished by eSAT to CEO; (iii) cease representing to
the public or to any person or entity that either the Corporation
or CEO has any relationship with eSAT; and (iv) deliver to eSAT
all files, permits, licenses and the like obtained or maintained
by the Corporation or CEO on behalf of eSAT or in connection with
the business of eSAT.
6. GOVERNING LAW; ARBITRATION; EQUITABLE REMEDIES.
(a) Governing Law. This Agreement and all other contracts between the
parties relating to eSAT's business, whether now existing or
hereafter arising, shall exclusively be governed by and
interpreted in accordance with the laws of the State of
California, without reference to principles of conflicts of law.
(b) Arbitration. Subject to paragraph (c) of this Section, any
dispute, controversy or claim arising out of or related to this
Agreement, or the interpretation, breach, termination or validity
hereof shall be settled finally by arbitration conducted in Los
Angeles, California in accordance with the Rules of the American
Arbitration Association as then in force by
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one arbitrator appointed in accordance with such rules. The
arbitrator shall decide all matters in accordance with applicable
law and this Agreement. All costs in connection with any
proceedings hereunder, other than the attorneys'; fees and
disbursements of each party, shall be borne equally by the
parties, unless otherwise determined by the arbitrator. The
arbitrator's award shall be final conclusive and binding on the
parties, and shall be the exclusive remedy regarding any claims,
counterclaims, issues or accounting presented or pled to the
arbitrator. Judgment on the award may be entered in any applicable
jurisdiction and fees incidental to the enforcement of any award
shall be charged, to the maximum permitted extent, against the
party resisting enforcement.
(c) Provisional Remedies. Paragraph (b) of this Section shall not
limit the right of any party to seek to obtain in any court or
other tribunal any interim relief or provisional remedy,
including, without limitation, injunctive relief or attachment.
Seeking or obtaining such interim relief or provisional remedy
shall not constitute waiver of the right to arbitration hereunder.
7. GENERAL PROVISIONS.
(a) Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been
given upon delivery if delivered personally, one full business day
after proper telex or facsimile transmittal if transmitted by
telex or facsimile, or five full business days after mailing if
mailed by certified or registered airmail, return receipt
requested, postage prepaid, addressed as follows:
To eSAT: eSAT Inc.
00000 Xxxxxx Xxxxxxxxx, Xxxx X.
Xxxxxxxx Xxxxxx, XX 00000
Attention: President
To the Corporation: Xxxxxxx X. Xxxxxx
C/O eSAT, Inc.
00000 Xxxxxx Xxxxxxxxx, Xxxx X
Xxxxxxxx Xxxxxx, XX 00000
(b) Severability. If any provision of this Agreement, or any portion
of any such provision, is held to be unenforceable or invalid, the
remaining provisions and portions shall nevertheless be carried
into effect to the maximum extent permitted by applicable law.
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(c) Waivers. All rights of the parties are separate and cumulative,
and no one of them, whether exercised or not, shall be deemed to
be to the exclusion of any other rights and shall not limit or
prejudice any other legal or equitable rights or remedies which
the parties may have. The parties shall not be deemed to waive any
of their rights or remedies under this Agreement, unless such
waiver is in writing and signed by the party to be bound. No delay
or omission on the part of either party in exercising any right
shall operate as a waiver of such right or any other right or
remedy. A waiver on any one occasion shall not be construed as a
bar to or waiver of any right or remedy on any future occasion.
(d) Language of Contract; Headings. The headings contained in this
Agreement are for convenience only and are a part of this
Agreement, and do not in any way interpret, limit or amplify the
scope, extent or intent of this Agreement, or any of the
provisions of this Agreement.
(e) Assignment. It is expressly acknowledged and agreed that the
personal services of CEO are of the essence of this Agreement.
Accordingly, the Corporation shall have no right to assign, or
delegate to any other person the responsibilities to be performed
by CEO or to substitute any other person in CEO's place.
(f) Binding Effect. Subject to the provisions of Section 8(e) hereof,
this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, successors,
assigns and legal and personal representatives.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which taken together shall constitute one and the same instrument.
(h) Payroll and Withholding Taxes. The Corporation is an independent
contractor and CEO is not an employee of eSAT. All payments to be
made or benefits to be provided hereunder by eSAT shall not be
subject to reduction for any applicable payroll-related or
withholding taxes, and the Corporation agrees to hold eSAT
harmless from any payroll-related or withholding tax liability.
(i) Restricted Shares. The Corporation understands that the shares of
common stock of eSAT that it may receive upon its exercise of a
stock option granted pursuant to Section 2 will not be registered
under the Securities Act of 1933, as amended, or registered or
qualified under any state securities laws and may not be sold,
transferred, assigned,
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pledged or otherwise disposed of unless there is an effective
registration statement under such act covering such shares of
common stock and such shares of common stock have been registered
or qualified under applicable state securities laws, or eSAT
receives an opinion of counsel, acceptable to eSAT, that such
sale, transfer, assignment, pledge or disposition is exempt from
the registration and prospectus delivery requirements of such act
and such state laws. The Corporation acknowledges that the shares
of common stock that it may receive upon its exercise of such
stock option will be stamped with a legend substantially similar
to the preceding sentence and that eSAT's transfer agent will be
issued stop transfer orders with respect to the shares of common
stock the Corporation receives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth hereinabove.
ESAT INC. VANTAGE CAPITAL GROUP
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxx Xxxxxxx Xxxxxxx X. Xxxxxx
Chairman President
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