EXHIBIT 10.1
BUSINESS ADVISORY & FINANCIAL CONSULTING SERVICES AGREEMENT
This Business Advisory and Financial Consulting Services Agreement (the
"Agreement"), is entered into and effective as of the 30th day of July, 2002 by
and between Ascendiant Capital Group, LLC, a Nevada limited liability company
(hereinafter referred to as, "Consultant"), and Rushmore Financial Group,
Incorporated (RFGI) (hereinafter referred to as, "Client"), a Texas corporation
(collectively referred to herein as the "Parties").
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 long
range strategic planning, and to advise the Client in business and/or financial
and merger/acquisition 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, if Consultant associate
with Client and allocates its resources necessary to provide Client with its
business advisory and consulting services, Consultant will be paid the
consideration described herein and said consideration 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:
1. Engagement. Client hereby engages Consultant on a non-exclusive basis,
and Consultant hereby accepts the engagement to become a business and
financial Consultant to Client and to render such advice, consultation,
information, and services to the Directors and/or Officers of Client
regarding general financial and business matters including, but not
limited to the following:
1.1 Advice and Counsel. Consultant will provide advice and counsel
regarding Client's strategic business plans, strategy and negotiations
with potential business strategic partnering, corporate planning and or
other general business consulting needs as expressed by Client.
Consultant will review and assess various financing strategies
and solutions with Client. Consultant will help Client
determine desirable financing amounts, terms, and structure.
Consultant will assist Client in determining Client's proper
capital structure. The services which are contemplated under
this Agreement shall not relate in any way to the offer or
sale of securities in any capital-raising transaction and
shall not directly or indirectly promote or maintain a market
for the Client's securities. None of the services contemplated
under this Agreement shall relate in any way to the raising of
capital, promotion of the Client's securities or investor
relations.
Consultant will provide general advice and counsel to Client
regarding mergers and acquisitions. At Client's request,
Consultant is available to be materially involved in
negotiating acquisition terms and structure, and assisting
with due diligence and documentation (see Section 1.3 for
additional details and compensation structure).
Consultant will assist Client in the development and/or
refinement of the strategic growth plan for the next 12-24
months and related communications materials such as the
executive summary and one-page company "snapshot"
presentations.
Consultant will assist Client with corporate governance
structure involving Client's Board of Directors and
committees. Consultant will also assist with the development
and implementation of management and director compensation
programs.
Consultant will assist Client in determining the short-term
and long-term requirements for Client's financial reporting
function and Chief Financial Officer and, if requested, will
assist Client with identifying qualified candidates.
1.2 Client and/or Client's Affiliate Transaction Due Diligence. Consultant
will participate and assist Client in the due diligence process, where
possible, on all proposed financial transactions affecting Client of
which Consultant is notified in writing in advance, including
conducting investigation of and providing advice on the financial,
valuation and stock price implications of the proposed transaction(s).
1.3 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, from time to time, as Consultant deems appropriate in its sole
discretion, 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.
Consultant will introduce and/or 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.
Specifically, Consultant is available to assist Client with the review
of target company financials and due diligence, and with the proposed
valuation and structure of acquisitions. At Client's request,
Consultant will act as Client's agent and sponsor in negotiations with
acquisition targets, demonstrating to target companies that Client has
the support of Consultant as Client pursues growth and development
plans and strategies. Consultant is also available to assist Client
with the documentation of transactions, including letters of intent,
definitive agreements, and other closing documents.
If Consultant is materially involved in a completed transaction with a
company introduced by Client, Client agrees to pay Consultant five
percent (5%) of the total 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. If Consultant
is materially involved in a completed transaction with a company
introduced by Consultant, Client agrees to pay Consultant ten percent
(10%) of the total value of the transaction in the same ratio of cash
and / or stock as the transaction.
1.4 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.
2. Compensation to Consultant.
2.1 Engagement Fee. As express consideration for Consultant entering into
this Agreement, Client shall issue an aggregate 400,000 shares of its
common stock, par value $.01 per share (the "Engagement Fee"), to
certain affiliates of Consultant in the following amounts (i) 200,000
to Xxxx Xxxxxxxxxx and (ii) 200,000 to Xxxxxxx X. Xxxxxxx (Messrs.
Xxxxxxxxxx and Xxxxxxx are each an "Affiliate" and are collectively,
the "Affiliates"). When issued, said shares shall be free trading
shares, registered with the U.S. Securities and Exchange Commission
(the "SEC") on a Form S-8 or a similar registration statement. Such
shares shall be issued and delivered to the Affiliates as soon as
practicable following execution of this Agreement.
2.2 On December 31, 2002, provided that this Agreement has not been
terminated pursuant to Section 7 hereof, Client shall issue to each
Affiliate shares of Client's common stock in an amount equal to
$135,000, the number of such shares to be calculated by dividing (x)
$135,000 by (y) the average closing price of Client's common stock for
the preceding (10) ten trading days. Such shares shall be issued as
compensation for the remaining months of service covered by this
Agreement.
2.3 Warrants. On November 20, 2002, Client shall issue Consultant a warrant
for a number of shares equal to 15% of the shares issued to the
Affiliates. Said warrants shall have a strike price of $0.15, shall
carry a term of three years, shall carry standard piggyback
registration rights and have a cashless exercise provision.
Note: Client expressly agrees that the initial amount of the Engagement
is deemed earned upon execution of this Agreement and is thereafter
non-refundable and non-cancelable. Consultant shall have no obligation
to perform any duties provided for herein if full payment of the
Engagement Fee is not received within the time described herein this
Section 2.
2.4 Expenses. Client shall reimburse Consultant for reasonable expenses
incurred in performing its duties pursuant to this Agreement (including
printing, postage, express mail, photo reproduction, travel, lodging,
and long distance telephone and facsimile charges); provided, however,
that for any expenses over $500, Consultant must receive prior written
approval from Client. Such reimbursement shall be payable within seven
days of Consultant's invoice.
2.5 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.
3. Indemnification. The Client agrees to indemnify and hold harmless
Consultant 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 Client 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.
4. Confidentiality.
4.1 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.
4.2 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 its representatives.
5. Miscellaneous Provisions.
5.1 Amendment and Modification. This Agreement may be amended, modified and
supplemented only by written agreement of Consultant and Client.
5.2 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.
5.3 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 the City of Irvine, Orange County,
California.
5.4 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.
5.5 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.
5.6 Facsimile Signatures. The Parties hereto agree that this Agreement may
be executed by facsimile signatures and such signature shall be deemed
originals. The Parties further agree that within ten (10) days
following the execution of this Agreement, they shall exchange original
signature pages.
6. 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:
A. Arbitration is final and binding on the parties;
B. The parties waive their right to seek remedy in court,
including their right to jury trial;
C. Pre-arbitration discovery is generally more limited and
different from court proceeding;
D. 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;
E. This arbitration provision is specifically intended to include
any and all statutory claims which might be asserted by any
party;
F. 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;
G. 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;
H. Any hearing scheduled after an arbitration is initialed shall
take place in the City of Irvine, Orange County, California;
I. 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 the City of Irvine, 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;
J. The parties shall accept the decision of any award as being
final and conclusive and agree to abide thereby;
K. Any decision may be filed with any court as a basis for
judgment and execution for collection.
7. Term/Termination. This Agreement is an agreement for the term of twelve
(12) months ending July 31, 2003 and is effective as of the date first
written above. Client may terminate this Agreement at any time
resulting in a full cancellation of this Agreement and any future
obligation of payment by Client or performance by Consultant.
Notwithstanding the foregoing, it is expressly agreed by Client that
any compensation or shares previously tendered to the Affiliates or
Consultant shall not be refundable. Accordingly, if there is a pending
merger or acquisition in which Consultant has participated toward the
closing of the transaction pursuant to terms of Section 1.3, Consultant
shall continue to be compensated upon such closing pursuant to said
section.
8. Representations, Warrants and Covenants. The Client represents,
warrants and covenants to the Consultant as follows:
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.
9. 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,
it 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' 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.
10. 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, addressed as follows:
To the Client: To the Consultant:
Attn: X. X. (Xxxxx) Xxxxx, Jr., CEO Attn: Xxxxxxx X. Xxxxxxx,
Rushmore Financial Group, Inc. Managing Director
00000 Xxxx Xxxx, Xxxxx 000 Ascendiant Capital Group, Inc.
Xxxxxx, XX 00000 00000 Xxx Xxxxxx - Xxx 0000
Facsimile No.: (000) 000-0000 Xxxxxx, XX 00000
Facsimile: (000) 000-0000
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.
11. 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.
12. Preliminary Statement. The Preliminary Statement is incorporated herein
by this reference and made a material part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
CLIENT: CONSULTANT:
Rushmore Financial Group, Inc. (RFGI) Ascendiant Capital Group, LLC
/s/ Xxxxx X. "Xxxxx" Xxxxx, Jr. /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------- ------------------------------------
Xxxxx X. "Xxxxx" Xxxxx, Jr. Xxxxxxx X. Xxxxxxx,
Its President & CEO Its Managing Director
