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EXHIBIT 10.I
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into as of
September 15, 1999, by and between eSat, Inc., a Nevada corporation and its
subsidiaries or affiliates (the "Company"), and Vantage Capital, Inc., a
California corporation ("Consultant").
WHEREAS, the Company desires to acquire or merge with other businesses,
enter into investment banking relationships and enhance shareholder value
through the sale or restructuring of its business, recapitalizations,
reorganizations and placement of common stock of the Company ("Common Stock"),
preferred stock, and/or debt instruments of the Company (the "Company
Objectives");
WHEREAS, the Company recognizes that the Consultant can contribute to
finding, analyzing, structuring, negotiating and financing business sales and/or
acquisitions, joint ventures, alliances and other desirable projects, which
contribution is of great value to the Company and its shareholders;
WHEREAS, the Company believes it to be important both to the future
prosperity of the Company Objectives and to the Company's general interest to
retain Consultant as an exclusive consultant to the Company and have Consultant
available to the Company for consulting services in the manner and subject to
the terms, covenants, and conditions set forth herein;
WHEREAS, in order to accomplish the foregoing, the Company and
Consultant desire to enter into this Agreement, effective as of September 15,
1999, to provide certain assurances as set forth herein.
WHEREAS, in order to accomplish the foregoing, the Consultant will enter
into a joint venture with Corporate Financial Enterprises, a Delaware
corporation.
NOW THEREFORE, in view of the foregoing and in consideration of the
premises and mutual representations, warranties, covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Retention. The Company hereby retains the Consultant during the
Consulting Period (as defined in Section 2 below), and Consultant hereby
agrees to be so retained by the Company, all subject to the terms and
provisions of this Agreement.
2. Consulting Period. The Consulting Period shall commence on September 15,
1999 and terminate no earlier than September 15, 2002. After September
15, 2002, either party may terminate this agreement upon at least 30
days written notice.
3. Duties of Consultant. During the Consulting Period, the Consultant shall
use its reasonable and best efforts to perform those actions and
responsibilities necessary to (i)
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identify, analyze, structure and/or negotiate business sales and/or
acquisitions, including without limitation, merger agreements, stock
purchase agreements, and any agreements relating to financing and/or the
placement of debt or equity securities of the Company, (ii) assist the
Company in its corporate strategies, (iii) assist the Company in the
implementation of its business plan, in each case as requested by the
Company (the "Services"). The Company shall provide all necessary
financing required in order to purchase businesses approved by the
Company, including cash or freely tradable or restricted securities.
Such securities may include freely tradable Common Stock, restricted
Common Stock, preferred stock, debt, convertible debt or any other
security. Consultant shall render such Services diligently and to the
best of its ability.
4. Other Activities of Consultant. The Company recognizes that Consultant
shall perform only those services that are reasonably required to
accomplish the goals and objectives set forth herein, and that
Consultant shall provide services to other businesses and entities other
than the Company. Consultant shall be free to directly or indirectly
own, manage, operate, join, purchase, organize or take preparatory steps
for the organization of, build, control, finance, acquire, lease or
invest or participate in the ownership, management, operation, control
or financing of, or be connected as an officer, director, employee,
partner, principal, manager, agent, representative, associate,
consultant, investor, advisor or otherwise with (collectively, be
"Affiliated" with), any business or enterprise, or permit its name or
any part thereof to be used in connection with any business or
enterprise, engaged in any business, except for any business that is the
same as, substantially similar to or otherwise competitive with, adverse
to, affiliated with, or otherwise related to the Company. Consultant may
be Affiliated with any entity which may provide services to the Company.
The Company hereby waives any conflict of interest that may arise from a
relationship between Consultant and any entity which Consultant is
Affiliated with. This Agreement may be assigned by Consultant to an
entity designated by Consultant, whether Affiliated or not Affiliated
with Consultant, and wherever located.
5. Compensation. In consideration for Consultant entering into this
Agreement, the Company shall compensate Consultant as follows:
a. Monthly Fees and Benefits:
i. Retainer. The Company shall pay to Consultant a
non-refundable monthly retainer of $5,000, payable in
cash or, Restricted Common Stock (as defined below) at
the rate of one share of Restricted Common Stock for
each $2.00 payable to Consultant.
ii. Expenses. The Company shall pay all such expenses
reasonably incurred during the Consulting Period by the
Consultant for business purposes related to or in
furtherance of the goals and objectives of the Company
and/or the provision of the Services (collectively,
"Company Purposes"), including, without limitation,
expenses incurred with respect to the Consultant's
travel (including travel for flights of less than two
hours and business class travel for flights of three
hours or more outside the U.S.),
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meals and entertainment and other customary and
reasonable expenses for Company Purposes. The Company
shall pay such expenses directly, or, upon submission of
bills, receipts and/or vouchers by the Consultant, by
direct reimbursement to the Consultant.
b. Warrants. The Company shall issue to Consultant or its designees
warrants to purchase 1,200,000 shares of Common Stock (the
"Warrants"), with exercise prices equal to (a) as to 300,000
warrants, $4.25, (b) as to 300,000 warrants, $5.25, (c) as to
200,000 warrants, $6.25, and (d) as to 400,000 warrants, $8.50,
and which may be exercised by Consultant at any time through the
payment of (i) cash, (ii) a promissory note bearing interest at
six percent (6%) per annum, or (iii) by tendering shares of
Common Stock equal to the aggregate exercise price divided by
the last closing price of the Common Stock as reported on such
exchange or market as such Common Stock is then traded on the
date of exercise, in each case at Consultant's option. Such
Warrants as are exercised shall vest immediately if paid in cash
or Common Stock, and on a pro rata basis in accordance with
receipt of cash or Common Stock in the event Warrant is
exercised with a promissory note. The Company shall, at its sole
expense, cause the Common Stock underlying the Warrants to be
registered with the Securities and Exchange Commission upon
demand, or upon the first registration of any of the Common
Stock of the Company after the date of this Agreement if no such
demand has yet been made. In the event the Company issues or
sells Common Stock or any other equity securities of the Company
after the date of this Agreement to any party other than
Consultant for cash consideration or non-cash consideration
which has a fair value below the closing bid price as of the
date prior to such issuance or sale, or issues options, warrants
or other securities convertible into Common Stock with an
exercise or conversion price less than the closing bid price as
of the date prior to such issuance, the terms of the Warrants
herein shall be adjusted so as to protect Consultant against any
dilution of its interest in the Common Stock underlying the
Warrants. If at any time there shall be a capital reorganization
of the Common Stock or merger of the Company into another
corporation, or the sale of all or substantially all of the
Company's properties or assets, then, as a part of such
reorganization, merger or sale, lawful provision shall be made
so that Consultant shall thereafter be entitled to receive upon
exercise of the Warrants, the number of shares of Common Stock,
or securities of the successor corporation resulting from such
reorganization, merger or sale, to which the Consultant would
have been entitled had the Warrants been exercised immediately
prior to such reorganization, merger or sale.
d. Fees for Acquisition Opportunities. The Company shall pay to the
Consultant a fee equal to ten percent (10%) of the total
aggregate consideration paid for any acquisition or sale by the
Company of any business, corporation or division (a "Target"),
including, but not limited to, acquisitions by stock purchase
agreement, merger agreement, plan of reorganization or asset
purchase agreement, or any
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other transaction involving the sale of assets out of the
ordinary course (measured by either magnitude or classification)
or the sale, transfer or license of technology (collectively, a
"Transaction"), which fee shall be due upon closing of the
Transaction. For purposes hereof, the total aggregate
consideration paid shall include all cash and stock paid to the
seller or sellers of a Target upon closing of the Transaction in
addition to any contingent payments to the seller or sellers,
including without limitation, earnouts, as if all performance
targets are met, as well as any debts or liabilities assumed by
the Company, including without limitation any debts for which
the Company issues a guarantee. In addition, Consultant shall
also be entitled to a financing fee equal to ten percent (10%)
of any private or public placement of debt or equity securities
of the Company, including without limitation, promissory notes,
debentures, convertible debt, common stock or preferred stock,
or any other securities owned by the Company, including without
limitation securities of other corporations.
e. Third Party Commissions. Consultant and/or its Affiliates shall
be entitled to share in any fees or commissions payable by third
parties on any Transaction contemplated herein, including, but
not limited to, any fees payable to Consultant by a third party
lender, financing partner, or other party, or a seller of a
corporation or business, including, without limitation,
investment banking fees or commissions, business brokerage fees
or commissions, finders fees, or any other fee payable by a
third party to Consultant for any reason including the
identification of the Company as a potential purchaser or seller
of such corporation or business (a "Transaction Commission").
The Company hereby waives any conflict of interest that may
arise due to any Transaction wherein Consultant receives such a
Transaction Commission, including, but not limited to, any
conflict of interest which may arise as a result of the dual
representation by Consultant of the seller or purchaser of a
corporation or business on the one hand, and the Company on the
other.
f. Fees Paid in Common Stock. The Company, at its option, may pay
fees due under paragraph (d) of this Section 5 in cash, or by
issuance of Restricted Common Stock or freely tradable,
registered Common Stock. Restricted Common Stock shall be issued
at a rate equal to the lesser of (i) fifty percent (50%) of the
average Bid Price for the five trading days prior to the closing
date of a Transaction which entitles the Consultant to receive
such fees, or $5.00. Freely tradable, registered Common Stock,
pursuant to an effective and current registration statement,
shall be issued at the rate equal to the lesser of (i) seventy
percent (70%) of the average Bid Price for the five trading days
prior to the closing date of a Transaction which entitles the
Consultant to receive such fees, or $7.50. All Transaction
related fees payable hereunder shall be paid within seven
business days following the closing of each Transaction.
6. Notification. The Company shall promptly notify the Consultant of any
inquiry, or the
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commencement of negotiations, with respect to any potential Transaction
between the Company and any third party.
7. Termination. This Agreement may be terminated by Company with thirty
(30) days written notice, as follows: i. If Consultant is unable to
provide the consulting services by reason of dissolution, files for
protection under federal bankruptcy laws, or any bankruptcy petition or
petition for received is commenced by a third part against Consultant,
any of the foregoing of which remains undismissed for a period of sixty
(60) days. ii. Change in control of Consultant resulting from a merger,
acquisition or such other change wherein more than fifty percent (50%)
of the Consultant's equity is exchanged, sold, or transferred to another
party. iii. Breach or default of any material obligation of Consultant,
which breach or default is not cured within five (5) days of written
notice from Company.
8. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or
sent by certified mail, return receipt requested, postage and fees
prepaid, or by national overnight delivery prepaid service to the
parties at their addresses set forth below. Any party hereto may at any
time and from time to time hereafter change the address to which notice
shall be sent hereunder by notice to the other party given under this
paragraph. The date of the giving of any notice sent by mail shall be
the day two days after the posting of the mail, except that notice of an
address change shall be deemed given when received. The addresses of the
parties are as follows:
TO CONSULTANT:
CORPORATE FINANCIAL ENTERPRISES VANTAGE CAPITAL, INC.
0000 Xxxx Xxxxxx 0000 X. Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
TO THE COMPANY:
ESAT, INC.
00000 Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9. Waiver. No course of dealing nor any delay on the part of either party
in exercising any rights hereunder will operate as a waiver of any
rights of such party. No waiver of any default or breach of this
Agreement or application of any term, covenant or provision hereof shall
be deemed a continuing waiver or a waiver of any other breach or default
or
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the waiver of any other application of any term, covenant or provision.
10. Definition of "Reasonable and Best Efforts." Consultant shall not
guarantee, make any representation concerning (which representation
would survive the closing of any escrow or other transaction) or warrant
(i) the condition, performance, value, or profitability of any business
purchased, sold by, or otherwise considered for purchase by the Company;
(ii) the validity or authorization of any capital stock purchased, sold
by, or otherwise considered for purchase by the Company; (iii) the
market value of any capital stock, business or assets purchased, sold
by, or otherwise considered for purchase by the Company; (iv) the
ability to finance, refinance or otherwise mortgage or encumber any
business or corporation purchased, sold by, or otherwise considered for
purchase by the Company; or (vi) that Consultant will find or present
any business or corporation which the Company will consider, approve or
ultimately purchase or be able to purchase; or (7) the covenants,
representations or warranties of any party to any stock purchase, asset
purchase, merger or other agreement entered into by the Company with any
third party.
11. Successors; Binding Agreements. Prior to the effectiveness of any
succession (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, the Company will require the successor to
expressly assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such succession had occurred. As used in this Agreement, "Company"
shall mean the Company as defined above and any successor to its
business and/or assets which executes and delivers the Agreement
provided for in this Section 11 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law or
otherwise.
12. Notice of No Conflict. The Consultant has made the Company, its
affiliates, and related parties aware that Xx. Xxxxxxx X. Xxxxxx is the
President and owner of the Consultant and also serves in the capacity of
Chief Executive Officer of eSAT, Inc. and is a member of the Board of
Directors of eSat Inc. Having been made aware of this recognizes no
conflict by and between the Consultant and eSAT, Inc. from actions
arising from or contemplated by this Agreement.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument. Any
signature by facsimile shall be valid and binding as if an original
signature were delivered.
14. Captions. The caption headings in this Agreement are for convenience of
reference only and are not intended and shall not be construed as having
any substantive effect.
15. Governing Law. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the state of California
applicable to agreements entered into and to be performed entirely
therein. Any suit, action or proceeding with respect to this
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Agreement shall be brought exclusively in the state courts of the state
of California or in the federal courts of the United States which are
located in Los Angeles, California. The parties hereto hereby agree to
submit to the jurisdiction and venue of such courts for the purposes
hereof. Each party agrees that, to the extent permitted by law, the
losing party in a suit, action or proceeding in connection herewith
shall pay the prevailing party its reasonable attorneys' fees incurred
in connection therewith.
16. Entire Agreement/Modifications. This Agreement constitutes the entire
agreement between the parties and supersedes all prior understandings
and agreements, whether oral or written, regarding Consultant's
retention by the Company, including, but not limited to, the Prior
Agreement and any agreements related thereto; provided, however, that
all fees previously earned and/or paid to Consultant under the Prior
Agreement shall be deemed earned, and shall be in addition to any fees
payable hereunder. This Agreement shall not be altered or modified
except in writing, duly executed by the parties hereto.
17. Warranty. The Company and Consultant each hereby warrant and agree that
each is free to enter into this Agreement, that the parties signing
below are duly authorized and directed to execute this agreement, and
that this Agreement is a valid, binding and enforceable against the
parties hereto.
18. Severability. If any term, covenant or provision, or any part thereof,
is found by any court of competent jurisdiction to be invalid, illegal
or unenforceable in any respect, the same shall not affect the remainder
of such term, covenant or provision, any other terms, covenants or
provisions or any subsequent application of such term, covenant or
provision which shall be given the maximum effect possible without
regard to the invalid, illegal or unenforceable term, covenant or
provision, or portion thereof. In lieu of any such invalid, illegal or
unenforceable provision, the parties hereto intend that there shall be
added as part of this Agreement a term, covenant or provision as similar
in terms to such invalid, illegal or unenforceable term, covenant of
provision, or part thereof, as may be possible and be valid, legal and
enforceable.
IN WITNESS HEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
CORPORATE FINANCIAL VANTAGE CAPITAL, INC.
ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
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Xxxxx Xxxxxxx Xxxxxxx Xxxxxx
President President
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ESAT, INC.
By: /s/ Xxxxxxxx Early
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Xxxxxxxx Early
Chief Financial Officer
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