Exhibit 10.1 Restated - Investment Advisory Agreement
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement") is effective as of July 8,
2004 (the "Effective Date") by and between Aztec Communications Group, Inc., a
Nevada corporation, (the "Company"), whose address is 000 Xxxxx Xxxx Xxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000 and SBI USA, LLC, a California limited
liability company, (the "Advisor"), whose address is 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000; and this Agreement supercedes,
rescinds and replaces in its entirety that said previous Investment Advisory
Agreement entered into between the Company and the Advisor dated July 8, 2004.
RECITALS
A. The Company wishes to engage the services of the Advisor to advise and
consult with the Company on certain business and financial matters as set forth
in this Agreement.
B. The Advisor has extensive experience in investment banking, business and
financial consulting, and entrepreneurial executive management. As a result,
the Advisor has the expertise to advise and assist the Company in developing a
successful business plan, and in evaluating businesses that may be likely
candidates to strategically partner with the Company, on the terms and subject
to the conditions set forth in this Agreement.
C. The Company wishes to engage the services of the Advisor as an independent
contractor to advise and consult with it with respect to (i) developing a
successful business plan, (ii) exploring strategic alliances, partnering
opportunities and other cooperative ventures, (iii) evaluating possible
acquisition and strategic partnering candidates, and marketing opportunities
for the Company, (iv) the Company's business development activities, including
major geographic and service expansion plans, (v) the Company's merger and
acquisition strategies, including the evaluation of targets and the structuring
of transactions; (vi) the Company's employee relations; and (vii) the Company's
marketing strategy; all on the terms and subject to the conditions set forth in
this Agreement.
D. The Advisor is willing to accept such engagement, on the terms set forth in
this Agreement.
Now therefore, in consideration of the foregoing recitals and the mutual
covenants and obligations contained in this Agreement, including the payment of
fees and other good and valuable consideration contained herein, the parties
agree as follows:
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1. Engagement.
1.1. Engagement. The Company hereby engages the Advisor to perform the
Services, as defined and set forth in paragraph 1.4, for the Term as defined
and set forth in paragraph 1.2, and the Advisor hereby accepts this engagement,
on the terms and subject to the conditions set forth in this Agreement.
1.2. Term. The term of the Advisor's engagement under this Agreement shall be
for the period beginning on the Effective Date and ending when terminated as
provided in paragraph 4 below (the "Term").
1.3. Relationship. The relationship between the Company and the Advisor created
by this Agreement is that of independent contractors, and the Advisor is not
and shall not be deemed to be an employee of the Company for any purpose.
1.4. Services. The following services (the "Services") shall be rendered, from
time to time by the Advisor during the Term, as the Company may request, but
not to exceed 20 hours per month except at Advisor's sole discretion, solely
for the Company's benefit and not for the benefit of any third party:
(a) Assist management with the development of a successful business plan for
the Company.
(b) Explore strategic alliances, partnering opportunities and other cooperative
ventures for the Company within and without the Company's present industry
focus.
(c) Evaluate possible acquisition and strategic partnering candidates, and
marketing opportunities for the Company.
(d) Evaluate the Company's business development activities, including major
geographic and service expansion plans.
(e) Evaluate the Company's merger and acquisition strategies, including the
evaluation of targets and the structuring of transactions.
(f) Evaluate the Company's employee relations.
(g) Evaluate the Company's marketing strategy.
(h) Advise and consult with the Company's board of directors (the "Board") and
executive officers with respect to any of the above described matters.
1.5. No Capital Raising Services. The Services do not include consulting with
or advising or assisting the Company, in any manner (i) in connection with the
offer or sale of securities in any capital-raising transaction, or (ii) to
directly or indirectly promote or maintain a market for any of the Company's
securities.
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1.6. No Investment Advisory or Brokerage Services; No Legal Services. The
Services do not include requiring the Advisor to engage in any activities for
which an investment advisor's registration or license is required under the
U.S. Investment Advisors Act of 1940, or under any other applicable federal or
state law; or for which a "broker's" or "dealer's" registration or license is
required under the U.S. Securities Exchange Act of 1934, or under any other
applicable federal or state law. Advisor's work on this engagement shall not
constitute the rendering of legal advice, or the providing of legal services,
to the Company. Accordingly, Advisor shall not express any legal opinions with
respect to any matters affecting the Company. Advisor's work on this engagement
shall not consist of effecting transactions in the Company's securities and
Advisor shall not provide any securities broker-dealer services to the Company.
1.7. Location. The Company and the Advisor intend that the Services shall be
rendered primarily from the Advisor's offices in Newport Beach, California and
may be rendered by telephone, facsimile and e-mail communication. The Advisor
understands and acknowledges it may be necessary to travel to perform the
Services, and that the Advisor shall be required to do so at its own expense
(the Advisor's Fee having been agreed to in consideration thereof). The Advisor
shall be reasonably available by telephone to consult with the Board at regular
and special meetings thereof.
1.8. Time; Non-exclusive. The Advisor shall devote as much time to the
performance of the Services as is reasonably necessary, but the Advisor shall
not required to devote any fixed number of hours or days to the performance of
the Services. The Company recognizes that the Advisor has and will continue to
have other clients and business, and agrees that this engagement is non-
exclusive.
1.9. Support Staff and Facilities. The Advisor shall fumish its own support
staff, office, telephone, and other facilities and equipment necessary to the
performance of the Services, and the Company shall not be required to provide
the Advisor with any such staff, facilities or equipment.
1.10. Confidentiality. The Advisor shall not disclose any non-public,
confidential or proprietary information, including but not limited to
confidential information concerning the Company's products, methods,
engineering designs and standards, analytical techniques, technical
information, customer information, or employee information, unless required to
do so by applicable law.
2. Advisor's Fees and Expenses.
2.1. The Advisor's Fee. As the Company has minimal cash and assets at this
time, the Advisor agrees to accept compensation for its services under this
Agreement in the form of shares of the Company's common stock, that the board
of directors of the Company has determined has a fair market value of $29,010
or $.01 per share, subject to future subdivisions, combinations or mergers,
rather than in cash, on the following terms:
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(a) The Company shall issue and deliver to the Advisor, as a fee for its
Services under this Agreement (the "Advisor's Fee") 2,900,950 shares of the
Company's common stock, adjusted by future subdivisions, combinations or
mergers and issued as the Advisor directs (the "Shares") which shall be fully
earned and non-refundable as of the following dates: (i) 700,000 Shares as of
the effective date of this Agreement, (ii) 925,000 Shares as of September 15,
2004, (iii) 775,000 Shares as of April 15, 2005, and (iv) 500,950 Shares as of
July 8, 2005. The Company shall issue the Shares in the name of Xxxxxx Xxxxxxx,
the Advisor's alter ego as that term is defined in the Amendments to Form S-8
promulgated by the Securities Exchange Commission ("SEC") Release No. 33-7646.
(b) In connection with the formation of a strategic plan for 2004, the Board
adopted a directors and officers stock option and stock award plan (the
"Plan"). The Company filed a registration statement on Form S-8 (the
"Registration Statement") with the SEC that registers the issuance of shares of
common stock and options under the terms of the Plan. The Company shall issue
the Advisor's Fee pursuant to and in accordance with the Plan. The certificates
representing the Shares shall be free and clear of any legends or restrictions.
(c) The Company shall issue instructions to its transfer agent to issue the
certificates representing the Shares free and clear of any legend, restriction
or stop order, and deliver the shares, so registered, to Advisor. The Company
warrants that the Shares shall be freely transferable on the books and records
of the Company. Nothing in this Section 2.1 (c) shall affect in any way the
Advisor's obligations and agreement to comply with all applicable securities
laws upon resale of the Shares.
(d) The Advisor shall have the right to make purchases of a total of 1,500,000
Class A, Class B, Class C and Class D Warrants, adjusted by future
subdivisions, combinations or mergers on the following dates: 1,500,000
warrants as of March 15 2005; 1,500,000 warrants as of July 8, 2005; 1,500,000
warrants as of September 15 2005; 1,500,000 warrants as of March 15, 2006.
Each purchase shall be for the cash price of $100.00. Notwithstanding the
foregoing, Advisor shall not acquire the right to purchase any portion of the
warrant if the acquisition of such right would give the Adviser beneficial
ownership in the Company of more than 9.9%.
2.2. Offset; Withholding; Taxes. The Company shall pay the Advisor's Fee to the
Advisor without offset, deduction or withholding of any kind or for any
purpose. The Advisor shall pay any federal, state and local taxes payable by it
with respect to the Advisor's Fee.
2.3. The Advisors Expenses. Except for expenses incurred in attending meetings
of the Board such other expenses as the Company shall first expressly agree in
writing to pay or reimburse to Advisor, the Advisor shall pay all expenses
incurred by it in connection with its performance of the Services under this
Agreement.
3. Representations, Warranties and Covenants:
3.1. Representations and Warranties of the Company. The Company represents and
warrants to and covenants with the Advisor that:
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(a) Incorporation, Good Standing, and Due Qualification. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Nevada; has the corporate power and authority to own its assets and to
transact the business in which it is now engaged and proposes to be engaged in;
and is duly qualified as a foreign corporation and in good standing under the
laws of each other jurisdiction in which such qualification is required.
(b) Corporate Power and Authority. The execution, delivery and performance by
the Company of this Agreement, including the issuance of the Warrants and the
Shares have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of the Company's shareholders;
(ii) contravene the Company's certificate of incorporation or bylaws; (iii)
violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Company; (iv) result in a breach of or constitute a
default under any agreement or other instrument to which the Company is a
party.
(c) Legally Enforceable Agreement. This Agreement is the legal, valid and
binding obligation of the Company, enforceable against it in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
3.2. Representations and Warranties of the Advisor. The Advisor represents and
warrants to and covenants with the Company that:
(a) Power and Authority. The execution, delivery and performance by the Advisor
of this Agreement, does not and will not (i) violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to the Advisor;
(ii) result in a breach of or constitute a default under any agreement or other
instrument to which the Advisor is a party.
(b) Power and Authority. The execution, delivery and performance by the Advisor
of this Agreement, have been duly authorized by all necessary action and do not
and will not (i) require any consent or approval of the Advisor's partners;
(ii) contravene the Advisor's organizational documents;
(iii) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Advisor; (iv) result in a breach of or constitute a
default under any agreement or other instrument to which the Advisor is a
party.
(c) Legally Enforceable Agreement. This Agreement is the legal, valid and
binding obligation of the Advisor, enforceable against it i accordance with its
terms, except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally.
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(d) Advisor:
(i) is not the subject of any court order, judgment or decree, not subsequently
reversed, suspended or vacated, permanently or temporarily enjoining it or her
from, or otherwise limiting their involvement in any of the following
activities:
(A) Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures Trading
Commission ("CFT") or any associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company, bank,
savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;
(B) Engaging in any type of business practice; or
(C) Engaging in any activity in connection with the purchase or sale of any
security or commodity, or in connection with any violation of federal or state
securities laws or federal commodities laws.
(ii) was not the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days its or her right to
engage in any activity described in subparagraph (i) above, or to be associated
with persons engaged in any such activity.
(iii) was not found by a court in a civil action or by the state securities
law, and the judgment in such civil action or finding by the SEC has not been
subsequently reversed, suspended or vacated.
(iv) was not found by a court in a civil action or by the CFTC to have violated
any federal commodities law, and the judgment in such civil action or finding
by the CFTC has not been subsequently reversed, suspended or vacated.
4. Termination. This Agreement shall be terminate at the expiration of one year
from the date hereof, unless terminated sooner by mutual written agreement of
the parties:
5. Confidential Information.
5.1. The parties hereto recognize that a major need of the Company is to
preserve its specialized knowledge, trade secrets, and confidential
information. The strength and good will of the Company is derived from the
specialized knowledge, trade secrets, and confidential information generated
from experience with the activities undertaken by the Company and its
subsidiaries. The disclosure of this information and knowledge to competitors
would be beneficial to them and detrimental to the Company, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques, and
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similar items of the Company and its subsidiaries. By reason of his being a
Advisor to the Company, Advisor has or will have access to, and will obtain,
specialized knowledge, trade secrets and confidential information about the
Company's operations and the operations of its subsidiaries, which operations
may extend through the United States. Therefore, Advisor recognizes that the
Company is relying on these agreements in entering into this Agreement:
5.2 During and after the Term, Advisor will not use. disclose to others, or
publish any inventions or any confidential business information about the
affairs of the Company, including but not limited to confidential information
concerning the Company's products, methods, engineering designs and standards,
analytical techniques, technical information, customer information, employee
information, and other confidential information acquired by him in the course
of his past or future services for the Company. Advisor agrees to hold as the
Company's property all memoranda, books, papers, letters, formulas and other
data, and all copies thereof and therefrom, in any way relating to the
Company's business and affairs, whether made by him or otherwise coming into
his possession, and on termination of his employment, or on demand of the
Company, at any time, to deliver the same to the Company within twenty four
hours of such termination or demand.
5.3 During the Term, Advisor will not induce any employee of the Company to
leave the Company's employ or hire any such employee (unless the Board of
Directors of the Company shall have authorized such employment and the Company
shall have consented thereto in writing).
6. General Provisions.
6.1. Entire Agreement; Modification; Waivers. This Agreement contains the
entire agreement of the parties, and supersedes any prior agreements with
respect to its subject matter. There are no agreements, understandings or
arrangements of the parties with respect to the subject matter of this
Agreement that are not contained herein. This Agreement shall not be modified
except by an instrument in writing signed by the parties. No waiver of any
provision of this Agreement shall be effective unless made in writing and
signed by the party making the waiver. The waiver of any provision of this
Agreement shall not be deemed to be a waiver of any other provision or any
future waiver of the same provision.
6.2. Notices. All notices given under this Agreement shall be in writing,
addressed to the parties as set forth below, and shall be effective on the
earliest of (i) the date received, or (it) on the second business day after
delivery to a major international air delivery or air courier service (such as
Federal Express or Network Couriers):
If to the Company: It to the Advisor:
Aztec Communications Group, Inc. SBI USA, LLC
0000 Xxxxx, Xxxxx 0000 000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 Suite 1205
Attention: L. Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxx, XX 00000
Chairman & CEO
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6.3. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California; provided, however, that
if any provision of this Agreement is unenforceable under such law but is
enforceable under the laws of the State of Nevada, then Nevada law shall govern
the construction and enforcement of that provision.
6.4. Jurisdiction and Venue. The courts of the State of California sitting in
Orange County (the "Orange County Court") shall have exclusive jurisdiction to
hear, adjudicate, decide, determine and enter final judgment in any action,
suit, proceeding, case, controversy or dispute, whether at law or in equity or
both, and whether in contract or tort or both, arising out of or related to
this Agreement, or the construction or enforcement hereof or thereof (any such
action, suit, proceeding, case, controversy or dispute, a "Related Action").
The Company and the Advisor hereby irrevocably consent and submit to the
exclusive personal jurisdiction of the Orange County Courts to hear,
adjudicate, decide, determine and enter final judgment in any Related Action.
The Company and the Advisor hereby irrevocably waive and agree not to assert
any right or claim that it is not personally subject to the jurisdiction of the
Orange County Courts in any Related Action, including any claim of forum non
conveniens or that the Orange County Courts are not the proper venue or form to
adjudicate any Related Action. If any Related Action is brought or maintained
in any court other than the Orange County Courts, then that court shall, at the
request of the Company or the Advisor, dismiss that action. The parties may
enter a judgment rendered by the Orange County Courts under this Agreement for
enforcement in the courts of Nevada and the party against whom such judgment is
taken will not contest the authority of such courts to enforce such a judgment.
6.5 Waiver of Jury Trial. The Company and the Advisor hereby waive trial by
jury in any Related Action.
6.6 Attorney's Fees. The prevailing party in any Related Action shall be
entitled to recover that party's costs of suit, including reasonable attorney's
fees.
6.7 Binding Effect. This Agreement shall be binding on, and shall inure to the
benefit of the parties and their respective successors in interest and assigns.
6.8 Construction, Counterparts. This Agreement shall be construed as a whole
and in favor of the validity and enforceability of each of its provisions, so
as to carry out the intent of the parties as expressed herein. Heading are for
the convenience of reference, and the meaning and interpretation of the text of
any provision shall take precedence over its heading. This Agreement may be
signed in one or more counterparts, each of which shall constitute an original,
but all of which, taken together shall constitute one agreement. A faxed copy
or photocopy of a party's signature shall be deemed an original for all
purposes.
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In Witness Whereof, the parties have executed this Agreement effective as of
the Effective Date.
The Company: The Advisor:
AZTEC COMMUNICATIONS GROUP, INC. SBI USA, LLC
By: /s/ L. Xxxxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxxx
--------------------------- ------------------------
L. Xxxxxx Xxxxxxxxx Name: Xxxxxx Xxxxxxx
Chairman & CEO Title:
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