ADVISORY SERVICES AGREEMENT
Exhibit
10.2
This
Advisory Services Agreement (the “Agreement”) is entered into this 18th day of
July, 2005 by and between Ascendiant Capital Group LLC (hereinafter referred
to
as “Consultant”) and SmartVideo Technologies, Inc. (hereinafter referred to as
“Client” or “Company”), collectively referred to as the “Parties,” with
reference to the following terms:
Preliminary
Statement: The
Client desires to be assured of the association and services of the Consultant
in order to avail itself of the Consultant's experience, skills, abilities,
knowledge, and background to facilitate strategic and financial development,
and
to advise the Client in business and financial matters, and is therefore
willing
to engage Consultant upon the terms and conditions set forth herein. Consultant
desires to be assured, and Client desires to assure Consultant, that Consultant
will be paid the consideration described herein and said consideration once
paid
will be nonrefundable, regardless of the circumstances.
Consultant
agrees to be engaged and retained by Client upon the terms and conditions
set
forth herein.
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
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1.
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Engagement.
Client hereby engages Consultant and Consultant hereby accept the
engagement to become Consultant to Client and, as requested and
applicable, to render such assistance, advice, consultation, information,
and services to the Officers and/or Directors of Client regarding
general
business matters including, but not limited to the following: Business
Strategy, Strategic Alliances, Mergers and Acquisitions, Stock
Option
Plans, Corporate Governance, and analysis regarding Qualification
for
National Stock Exchanges.
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1.1.
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Additional
Duties.
Client and Consultant shall mutually agree, in writing, for any
additional
duties that Consultant may provide to Client for compensation paid
or
payable by Client under this Agreement. Although there is no requirement
to do so, such additional agreement(s) may be attached hereto and
made a
part hereof by written amendments to be listed as "Exhibits" beginning
with "Exhibit A" and initialed by both
parties.
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1.2.
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Standard
of Performance.
Consultant shall devote such time and efforts to the affairs of
the Client
as is reasonably necessary to render the services contemplated
by this
Agreement. Any work or task of Consultant provided for herein which
requires Client to provide certain information to assist Consultant
in
completion of the work shall be excused (without effect upon any
obligation of Client) until such time as Client has fully provided
all
information and cooperation necessary for Consultant to complete
the work.
The services of Consultant shall not include the rendering of any
legal
opinions or the performance of any work that is in the ordinary
purview of
a certified public accountant, or other licensed professional.
Consultant
shall not make
a market in Client’s securities, engage in stock promotion, or be part of
a capital raising transaction. Consultant
cannot guarantee results on behalf of Client, but shall use commercially
reasonable efforts in providing the services listed
above.
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2.
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Compensation
to Consultant. The
engagement compensation to Consultant shall be 750,000 shares of
Client’s
restricted common stock, par value $.001, with piggyback registration
rights. The engagement compensation shall be delivered to Consultant
within five (5) days of the signing of this Agreement. Note:
Consultant shall have no obligation to perform
any duties provided for herein if full payment is not received
within the
time described
herein this Section 2. Furthermore, once paid, said engagement
fee
is nonrefundable
regardless of the
circumstances.
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2.1.
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Expenses.
If
the Client requests that Consultant travel outside of Southern
California
to perform the services described herein, Client shall reimburse
Consultant for travel-related expenses and payment shall be made
within
seven (7) days of invoice. Notwithstanding the foregoing, all such
expenses over $500 shall be pre-approved by the Client prior to
being
incurred.
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2.2.
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Additional
Fees.
Client and Consultant shall mutually agree upon any additional
fees that
Client may pay in the future for services rendered by Consultant
under
this Agreement. Such additional agreement(s) may, although there
is no
requirement to do so, be attached hereto and made a part hereof
as
Exhibits beginning with Exhibit A.
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2.3.
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Term/Termination. This
Agreement shall be in effect for six (6) months from the date of
the
Agreement. Additional extensions may be negotiated as necessary
at the
mutual written consent of the Client and
Consultant.
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3.
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Mergers
and Acquisitions.
Consultant will provide assistance to Client, as mutually agreed,
in
introducing and/or assisting Client in identifying, acquiring,
merging,
and/or divesting on a non-exclusive basis, assisting in due-diligence,
recommending transaction terms and providing advice and assistance
during
negotiations, as needed. It is expressly understood that Consultant
shall
have no power to bind Client to any contract or transaction obligation.
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If
requested by Client in writing, Consultant will assist the Client with one
or
more parties who might be interested in (whether by way of merger,
consolidation, asset purchase, technology license, or substantially similar
transaction) either, (a) acquiring some or all of Client’s assets or, (b)
selling some or all of their own assets to Client and/or, (c) entering into
some
form of strategic alliance with Client. In consideration of Consultant’s
services, Client agrees to pay Consultant ten percent (10 %) of the value
of the
transaction in the same ratio of cash and / or stock as the transaction.
“Total
value” shall include, but is not limited to cash, cash equivalents, stock, and
the value of any consideration other than cash paid or received by Client.
Should the transaction be with a party identified and introduced by Client,
Client agrees to pay Consultant five percent (5%) of the total value of the
transaction. For consultant to receive such compensation, Consultant and
Client
shall agree in writing to each merger and/or acquisition assignment(s) and
related compensation due and payable to Consultant resulting from the successful
completion of such transaction(s). Additionally,
Client and Consultant agree that for any pre-existing initiatives relating
to
mergers and acquisitions, compensation arrangements will be negotiated
separately and will be agreed to in writing by the Parties.
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4.
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Mutual
Indemnification.
Either Party agrees to indemnify and hold harmless the other against
any
and all liability, loss and costs, expenses or damages, including
but not
limited to, any and all expenses whatsoever reasonably incurred
in
investigating, preparing or defending against any litigation, commenced
or
threatened, or any claim whatsoever or howsoever caused by reason
of any
injury (whether to body, property, personal or business character
or
reputation) sustained by any person or to any person or property,
arising
out of any act, failure to act, neglect, any untrue or alleged
untrue
statement of a material fact or failure to state a material fact
which
thereby makes a statement false or misleading, or any breach of
any
material representation, warranty or covenant by either Party or
any of
its agents, employees, or other representatives. Nothing herein
is
intended to nor shall it relieve either party from liability for
its own
willful act, omission or negligence. All remedies provided by law,
or in
equity shall be cumulative and not in the
alternative.
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5.
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Mutual
Confidentiality.
Consultant and Client each agree to keep confidential and provide
reasonable security measures to keep confidential information where
release may be detrimental to their respective business interests.
Consultant and Client shall each require their employees, agents,
affiliates, other licensees, and others who will have access to
the
information through Consultant and Client respectively, to first
enter
appropriate non-disclosure Agreements requiring the confidentiality
contemplated by this Agreement in perpetuity. Consultant will not,
either
during its engagement by the Client pursuant to this Agreement
or at any
time thereafter, disclose, use or make known for its or another's
benefit
any confidential information, knowledge, or data of the Client
or any of
its affiliates in any way acquired or used by Consultant during
its
engagement by the Client. Confidential information, knowledge or
data of
the Client and its affiliates shall not include any information
that is,
or becomes generally available to the public other than as a result
of a
disclosure by Consultant or their
representatives.
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6.
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Amendments
and Modification.
This Agreement may be amended, modified and supplemented only by
written
agreement of Consultant and Client.
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6.1
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Assignment.
This Agreement and all of the provisions hereof shall be binding
upon and
inure to the benefit of the parties hereto and their respective
successors
and permitted assigns. The obligations of either party hereunder
cannot be
assigned without the express written consent of the other
party.
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6.2
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Governing
Law; Venue.
This Agreement and the legal relations among the parties hereto
shall be
governed by and construed in accordance with the laws of the State
of
California, without regard to its conflict of law doctrine. Client
and
Consultant agree that if any action is instituted to enforce or
interpret
any provision of this Agreement, the jurisdiction and venue shall
be
Orange County, California.
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6.3
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Attorneys'
Fees and Costs.
If
any action is necessary to enforce and collect upon the terms of
this
Agreement, the prevailing party shall be entitled to reasonable
attorneys’
fees and costs, in addition to any other relief to which that party
may be
entitled. This provision shall be construed as applicable to the
entire
Agreement.
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6.4
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Survivability.
If
any part of this Agreement is found, or deemed by a court of competent
jurisdiction, to be invalid or unenforceable, that part shall be
severable
from the remainder of the
Agreement.
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6.5
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Facsimile
Signatures.
The Parties hereto agree that facsimile signatures may execute
this
Agreement and such signature shall be deemed originals.
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7
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Arbitration. All
disputes, controversies, or differences between client, consultant,
or any
of their officers, directors, legal representatives, attorneys,
accountants, agents or employees, or any customer or other person
or
entity, arising out of, in connection with or as a result of this
agreement, shall be resolved through arbitration rather than through
litigation. With respect to the arbitration of any dispute, the
undersigned hereby acknowledge and agree
that:
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A.
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Arbitration
is final and binding on the
parties;
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B.
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The
parties waive their right to seek remedy in court, including their
right
to jury trial;
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C.
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Pre-arbitration
discovery is generally more limited and different from court
proceeding;
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D.
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The
arbitrator’s award is not required to include factual findings or legal
reasoning and any party’s right of appeal or to seek modification of
ruling by the arbitrators is strictly
limited;
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E.
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This
arbitration provision is specifically intended to include any and
all
statutory claims which might be asserted by any
party;
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F.
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Each
party hereby agrees to submit the dispute for resolution to the
American
Arbitration Association in Orange County, California within five
(5) days
after receiving a written request to do so from the other
party;
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G.
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If
either party fails to submit the dispute to arbitration on request,
then
the requesting party may commence an arbitration proceeding, but
is under
no obligation to do so;
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H.
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Any
hearing scheduled after an arbitration is initialed shall take
place in
Orange County, California;
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I.
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If
either party shall institute a court proceeding in an effort to
resist
arbitration and be unsuccessful in resisting arbitration or shall
unsuccessfully contest the jurisdiction of any arbitration forum
located
in Orange County, California, over any matter which is the subject
of this
agreement, the prevailing party shall be entitled to recover from
the
losing party its legal fees and any out-of-pocket expenses incurred
in
connection with the defense of such legal proceeding or its efforts
to
enforce its rights to arbitration as provided for
herein;
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J.
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The
parties shall accept the decision of any award as being final and
conclusive and agree to abide
thereby;
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K.
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Any
decision may be filed with any court as a basis for judgment and
execution
for collection.
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Representations,
Warrants and Covenants.
The Client represents, warrants and covenants to the Consultant
as
follows:
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The
Client has the full authority, right, power and legal capacity to enter into
this Agreement and to consummate the transactions which are provided for
herein.
The execution of this Agreement by the Client and its delivery to the
Consultant, and the consummation by it of the transactions which are
contemplated herein have been duly approved and authorized by all necessary
action by the Client’s Board of Directors and no further authorization shall be
necessary on the part of the Client for the performance and consummation
by the
Client of the transactions which are contemplated by this
Agreement.
The
business and operations of the Client have been and are being conducted in
all
material respects in accordance with all applicable laws, rules and regulations
of all authorities which affect the Client or its properties, assets, businesses
or prospects. The performance of this Agreement shall not result in any breach
of, or constitute a default under, or result in the imposition of any lien
or
encumbrance upon any property of the Client or cause acceleration under any
arrangement, agreement or other instrument to which the Client is a party
or by
which any of its assets are bound. The Client has performed in all respects
all
of its obligations which are, as of the date of this Agreement, required
to be
performed by it pursuant to the terms of any such agreement, contract or
commitment.
Consultant,
on behalf of itself, and its affiliates, hereby covenants and agrees not
to
directly or indirectly, offer to "short sell", contract to "short sell",
or
otherwise "short sell" the Securities of the Client.
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Non-Circumvention.
In
and for valuable consideration, Client hereby agrees that Consultant
may
introduce (whether by written, oral, data, or other form of communication)
Client to one or more opportunities, including, without limitation,
natural persons, corporations, limited liability companies, partnerships,
unincorporated businesses, sole proprietorships and similar entities
(hereinafter an “Opportunity” or “Opportunities”). Client further
acknowledges and agrees that the identity of the subject Opportunities,
and all other information concerning an Opportunity (including
without
limitation, all mailing information, phone and fax numbers, email
addresses and other contact information) introduced hereunder are
the
property of Consultant, and shall be treated as confidential and
proprietary information by Client, its affiliates, officers, directors,
shareholders, employees, agents, representatives, successors and
assigns.
Client shall not use such information, except in the context of
any
arrangement with Consultant in which Consultant is directly and
actively
involved, and never without Consultant’s prior written approval. Client
further agrees that neither it nor its employees, affiliates or
assigns,
shall enter into, or otherwise arrange (either for it/him/herself,
or any
other person or entity) any business relationship, contact any
person
regarding such Opportunity, either directly or indirectly, or any
of its
affiliates, or accept any compensation or advantage in relation
to such
Opportunity except as directly though Consultant, without the prior
written approval of Consultant. Consultant is relying on Client’s assent
to these terms and their intent to be bound by the terms by evidence
of
their signature. Without Client’s signed assent to these terms, Consultant
would not introduce any Opportunity or disclose any confidential
information to Client as herein
described.
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10.
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Notices.
Any notice or other communication required or permitted hereunder
must be
in writing and sent by either (i) certified mail, postage prepaid,
return
receipt requested and First Class mail; or (ii) overnight delivery
with
confirmation of delivery; or (iii) facsimile transmission with
an original
mailed by first class mail, postage prepaid, or in each case to
such other
address and facsimile number as shall have last been furnished
by like
notice. If mailing is impossible due to an absence of postal service,
and
other methods of sending notice are not otherwise available, notice
shall
be hand-delivered to the aforesaid addresses. Each notice or communication
shall be deemed to have been given as of the date so mailed or
delivered,
as the case may be; provided, however, that any notice sent by
facsimile
shall be deemed to have been given as of the date sent by facsimile
if a
copy of such notice is also mailed by first class mail on the date
sent by
facsimile; if the date of mailing is not the same as the date of
sending
by facsimile, then the date of mailing by first class mail shall
be deemed
to be the date upon which notice
given.
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Counterparts.
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all of which together
shall
constitute one and the same
instrument.
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| 12. |
Preliminary
Statement.
The Preliminary Statement is incorporated herein by this reference
and
made a material part of this Agreement.
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| 13. |
Entire
Agreement. With
respect to the services specific to this Agreement, this Agreement
supersedes any and all other agreements, either oral or written,
between
the parties hereto. Each party to this Agreement acknowledges that
no
representation, inducements, promises or agreement, orally or otherwise,
have been made by any party, or anyone acting on behalf of any
party,
which are not embodied herein, and that no other agreement, statement,
or
promise not contained in this Agreement with respect to the services
identified shall be valid or binding. Any modification of this
Agreement
will be effective only if it is in writing and signed by all
parties.
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IN
WITNESS WHEREOF,
the
Parties hereto have caused this Agreement to be duly executed, all as of
the day
and year indicated above.
CONSULTANT:
/s/
Xxxxxxx X.
Xxxxxxx
Ascendiant
Capital Group, LLC
By:
Xxxxxxx
X. Xxxxxxx
Its:
Managing
Director
Date:
July
18,
2005
CLIENT:
SmartVideo
Technologies, Inc.
/s/
Xxxxxxx X. Xxxxxxx,
Xx.
By:
Xxxxxxx
X. Xxxxxxx, Xx.
Its:
President
& CEO
Date:
July
18,
2005
