Exhibit 10.1
INVESTMENT BANKING AGREEMENT
AGREEMENT, made this 15th day of August, 2002 by and between GlobeTel
Communications Corp., having its principal place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxx, XX. 00000 hereinafter the "Company" and Xxxxxxx Xxxxxx
Securities Inc. having its principal place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxx 0X, Xxxxxxx, XX 00000, hereinafter the ("Consultant").
WHEREAS, the Company desires to retain the Consultant for consulting
services in connection with the Company's business affairs, and the Consultant
desires to undertake to provide such services as hereinafter fully set forth
below:
WITNESSETH
NOW, THEREFORE, the parties agree as follows;
1. Term: The term will be twelve (12) months from the date set forth
above, The Agreement will be automatically renewed for twelve (12)
month-terms("Renewal Term"), unless written notice is provided to the Consultant
by the Company not less than thirty (30) days prior to the expiration of the
Term of this Agreement and any subsequent renewal terms.
2. Termination: Either party may terminate this Agreement at any time upon
five (5) days written notice to the other party without cause, however, should
the Company terminate this Agreement with cause, including but not limited to
the Consultant's failure to meet certain expectations in a timely manner as set
forth in Section 3 below, the Consultant will only be entitled to the
Compensation as set forth in Section 4 below on a pro-rata basis up to the time
of termination. The company may terminate this Agreement due to the Consultant
being investigated for wrong doing in any way by the SEC, NASD or any other law
enforcement or regulatory agency, if the investigation finds the consultant
has-been found guilty of the acts that are charged, then all compensation set
forth in this Agreement will be forfeited and any funds advanced to the
Consultant will be immediately returned.
3. Services: The Company hereby engages Consultant to render the services
hereinafter described below during the Term of the Agreement on a non-exclusive
basis in a timely fashion. It is understood and agreed that both parties are
free to either seek or render the same or similar Services from or to any other
entity (ies).
(a) The Consultant will arrange for funding in accordance with the
Company's business plan in a timely fashion under terms and conditions mutually
agreed by the parties.
(b) The Consultant will provide the Company with a schedule of activities
for the Services set forth herein for each quarter of the Company's activities
thirty (30) days prior to each quarter fully setting for the activities of the
Consultant to fulfill the needs of the Company and provided the Services as set
forth herein. The Company at its sole discretion will approve, modify, or cancel
any of the activities in accordance with this Agreement.
(c) The Consultant will provide advice concerning on-going strategic
corporate planning and long-term investment policies, including any revision of
the Company's business plan.
(d) The Consultant will provide written advice with regards to potential
mergers and acquisitions, whether the Company will be the acquiring party or the
target of acquisition.
(e) The Consultant will provide advice regarding sales of securities in
private transactions.
(f) The Consultant will provide introduction to Exchanges' and registered
Associations' market participants.
(g) The Consultant will provide introductions to Financial Institutions
and Money Manager.
(h) The Consultant will provide placement of stock by insiders pursuant to
Rule 144 or otherwise.
(i) The Consultant will provide redistribution of shareholdings of the
company's common stock.
(j) The Consultant will provide written analytical coverage on the Company
in the form of a research report for each quarter under this Agreement and the
report will be submitted to the Company for review and approval for its accuracy
thirty (30) days after each quarter. In preparing each report, the Consultant
will conduct its own independent research and will not base any report solely
upon information furnished to the Consultant by the Company, provided that the
Company shall make available its key executives to Consultant to provide
information requested by Consultant and to verify the accuracy of facts
contained in the report. Should the Company reject such report due to inaccurate
information, the Consultant will use its best efforts to provide the report in a
corrected and acceptable format.
(k) The Consultant will conclude a Private Placement Offering for at least
$250,000 under terms and conditions acceptable to the company by August 21, 2002
or at Company's option this Agreement may be cancelled. For this placement, the
Consultant will receive 12.5 million shares of 144 stock upon delivery of funds
according to the terms listed above.
(1) The Consultant will conclude additional Private Placement Offerings
for at least $500,000 under terms and conditions acceptable to the Company by
November 30, 2002 or at the Company's option this Agreement may be cancelled,
For this placement, the Consultant will receive 12.5 million shares of 144 stock
upon the delivery of funds according to the terms listed above.
4. Responsibilities of the Company: The Company shall provide the
Consultant with all reasonable financial and business information about the
Company as requested by the Consultant in a timely manner. In addition,
executive officers and directors of the Company shall make themselves available
for personal consultations with the Consultant and/or third parties provided the
Consultant has
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given the Company reasonable prior notice and the Company has accepted such
request of the Consultant.
5. Compensation: For the services described above and any other corporate
financial advisory services, due diligence business development, strategic
planning and other consulting work to be accomplished not related to any public
financing, and other services including without limitation those provided for in
paragraph 2 above, will be provided to the Company from time to time over the
course of our engagement in a timely fashion, The parties mutually agree that
the Consultant will be entitled to compensation and other consideration during
the Term of Agreement as provided in subparagraphs (a), and (b) below provided
that the Agreement has not been terminated as set forth above and the
requirements set forth in Section 3 (b) above which will entitle the Consultant
to the Compensation set forth in subparagraph (b) below, have been met in a
timely fashion. It is understood and agreed that (i) in the event of any
termination of this agreement by either party, none of the compensation provided
below that is due for payment on any date following the date of termination
shall be payable, and (ii) no compensation shall be payable to Consultant beyond
the amounts provided below except as both parties expressly agree to payment of
additional compensation.
(a) The Company will pay a monthly fee of $5,000 and shall continue for
six months and be payable on the tenth day of every month thereafter. After the
first six months, the fee shall be $10,000 a month until the term of the
contract. The company will also pay an engagement fee of $30,000(thirty
thousand) upon the first initial funding on the 2lst of August 2002. The monthly
fee is payable in cash or common stock at the company's election. If paid with
common stock of the Company then it is agreed that the company will pay with
stock having a value of 125% of the cash payment alternative, based on the
closing bid price of the common stock of the company on the due date of the
payment.
(b) The Company will also pay a fee of 1,400,000 shares of the common
stock of the Company for services provided in paragraph 2 (a-l ) on or before
October 1, 2002, 1,300,000 shares on or before December 15, 2002 and a final
payment of 1,300,000 on or before February 15, 2003 for a total payment of
4,000,000 shares.
6. Expenses. Provided their incurrence has been approved by the Company in
advance in each instance. The Company shall reimburse the Consultant for actual
out-of pocket expenses including, but not limited to, facsimile, postage,
printing, photocopying, and entertainment, incurred by the Consultant without
the prior consent of the Company and in connection with the performance by the
Consultant of its duties hereunder, the Company shall also reimburse the
Consultant for the costs of all travel and related expenses incurred by the
Consultant in connection with the performance of its services hereunder,
provided that all such costs and expenses have been authorized, in advance, by
the Company. Expenses shall be due and payable when billed and after they have
been incurred.
7. Indemnification: The Parties agree to save, defend and indemnify and
hold eacb other harmless from any kind of liabilities, of every kind, nature and
description, fixed or contingent (including, without limitations, counsel fees
and expenses in connection with any action, claim or proceeding relating to such
liabilities) arising out of this transaction by any reason of any breach or
failure of observance or performance or untrue or incorrect statement of any
term, commitment, representation, warranty, covenant or agreement made by the
respective Parties hereunder; or by any reason of negligence by a party
regarding or in accordance with any duty, document, obligation, responsibility,
or other performance of service arising out of this transaction. A party
entitled to indemnification hereunder (an "Indemnified Party") agrees to notify
each party required to indemnify hereunder (an "Indemnifying Party") with
reasonable promptness of any claim asserted against it in
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respect to which any Indemnifying Party may be liable under this Agreement,
which notification shall be accompanied by a written statement setting forth the
basis of such claim and the manner of calculation thereof, An Indemnifying Party
shall have the right to defend any such claim at its or his won expense and with
the counsel of its or his choice; provided, however, that such counsel shall be
approved by the Indemnified Party prior to engagement, which approval shall not
be unreasonably withheld or delayed and provided further, that the Indemnified
party may participate in such defense, if it so chooses , with its own counsel
and at its own expense.
8. Complete Agreement: This Agreement contains the entire Agreement
between the parties with respect to the contents hereof and supersedes all prior
agreements and understandings between the parties with respect to such matters,
whether written or oral. Neither this agreement, nor any term or provision
hereof may be changed, waived, discharged or amended in any manner other than by
any instrument in writing, signed by the party against which the enforcement of
the change, waiver, discharge or amendment is sought.
9. Counterparts: This Agreement may be executed in two or more
counterparts, each of which shall be an original but all of which shall
constitute but one Agreement.
10. Arbitration: The parties hereby agree to submit any controversy or
claim arising out of or relating to this Agreement to final and binding
arbitration administered by the American Arbitration Association ("AAA") under
its Commercial Arbitration Rules, and further agree that immediately after the
filing of a claim as provided herein they shall in good faith attempt mediation
in accordance with the AAA Commercial Mediation Rules; provided, however that
the proposed mediation shall not interfere with or in any way impede the
progress of the arbitration. The parties also agree that (i) the AAA Optional
Rules for Emergency Measures of Protection shall apply to any proceedings
initiated hereunder, (ii) the arbitration shall be authorized and empowered to
grant any remedy or relief which the arbitrator deems just and equitable in
nature, including but not limited to, specific performance, injunctions
declaratory judgment and other forms of provisional relief in addition to a
monetary award: (iii) the arbitrator may make other decisions including interim,
interlocutory or partial findings, orders and awards to the full extent provided
in Rule 45 of the commercial Arbitration Rules; and (iv) the arbitrator shall be
empowered and authorized to award attorneys' fees to the prevailing party in
accordance with Rule 45
11. Survival: Any termination of this Agreement shall not, however, affect
the on-going provisions of this Agreement which shall survive such termination
in accordance with their terms.
12. Disclosure: Any financial advice rendered by the Consultant pursuant
to this Agreement may not be disclosed publicly in any manner without the prior
written approval of the Consultant unless required by any court, government, or
regulatory agency. All non-public information given to the Consultant by the
Company will be treated by the Consultant as confidential information, and the
Consultant agrees not to make use of such information other than in connection
with its performance of this Agreement, provided, however, that any such
information may be disclosed if required by any court or governmental or
regulatory authority, board or agency. "Non-public information" shall not
include any information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Consultant; (ii) was
available to the Consultant prior to its disclosure to the Consultant by the
Company, provided that such information is not known by the Consultant to be
subject to another confidentiality agreement with another party; or (iii)
becomes available to the Consultant on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a
confidentiality agreement with the Company
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13. 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 New
York without regard to the conflicts of laws principles thereof or the actual
domiciles of the parties. Any arbitration or mediation inherited by the parties
as provided herein shall be filed and maintained exclusively with the American
Arbitration Association's offices located in New York City and the parties
further agree that the provisions of paragraph 9, above, may be enforced by any
court of competent jurisdiction, and the party seeking enforcement shall be
entitled to an award of all costs, fees and expenses, including attorney's fees,
to be paid by the party against whom enforcement is ordered.
14. Compensation Notification: The Company agrees not to issue any class
of stock, option or warrant without prior written notification to the
Consultant.
15. Severability: Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
If any provision of this agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule, such invalidity,
illegality or unenforceability will not effect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
16. Choice of Venue: This Agreement shall be governed by, construed,
interpreted and the rights of the parties determined in accordance with the laws
of the state of New York, without reference to the principles of conflicts of
law, Any and all conflicts or legal proceedings are agreed to be filed in the
courts of the state of New York, sitting in New York County only, and in no
other governing jurisdiction.
17. Miscellaneous:
(a) Neither the Consultant nor its affiliates, or their respective
officers directors, employees, agents or controlling persons shall be liable,
responsible or accountable in damages or otherwise to the Company or its
affiliates, or their respective officers, directors, employees, agents or
controlling persons for any act or omission performed or omitted by the
Consultant with the respect to the services provided by it pursuant or otherwise
relating to or arising out of this Agreement.
(b) All final decisions with respect to consultation, advice and services
rendered by the Consultant to the Company shall rest exclusively with the
Company, and Consultant shall not have any right or authority to bind the
Company to any obligation or commitment.
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Agreed and Accepted on August 15, 2002 by and between:
GlobeTel Communications Corp.
By:_____________________
Xxxxxxxx X. Xxxxxx
COO
XXXXXXX XXXXXX SECURITIES Inc.
By:_____________________
Xxxx X. Xxxxxxx
Chairman/CEO
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GlobeTel $500,000 Convertible Note
1 Note convertible into the common stock of GlobeTel ("GTEL"), sixty days
after an effective registration, at a 25% discount to the closing bid price of
the market the day of conversion with a $.20 ceiling.
2 12 month note with a 12% coupon, interest payments are $15,000 on a
quarterly basis
3 Any thirty (30) day period, after the sixty day hold period, the holder
may convert up to a maximum $150,000 of the note, unless the note is in month
12, where the holder has the option to convert the balance of the note. There is
no minimum conversion for the note at any time. The Maker of the note reserves
the right to change the Maximum convertible allowance at any time.
4 CMS Inc. will arrange for the delivery of the first tranche of money
$125,000 no later than September 30, 2002. The second tranche of $125,000 will
be delivered no later than Thursday, October 10, 2002. The balance of $250,000
will be delivered into escrow one (1) day prior to the filing of the
registration statement and released to the company one (1) day after hung.
5 CMS Inc. will receive a fee equal to ten percent of the gross proceeds
delivered to the company,($50,000)Payable from time to time prorated on the
breaks of escrow.
6 Maker can pre-pay the note from time to time as long as the holders of
the notes are given the opportunity to convert the contemplated prepayment prior
to the payment.
7 Issuer will put 60,000,000 shares of restricted common stock in escrow
upon funding. These shares will be released from time to time as conversion
occurs.
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8 Issuer will file a SB-2 registration on or before November 15th, 2002
for the sixty million shares held in escrow. If the issuer fails to file a
registration statement by November 15, 2002 then the issuer will pay a penalty
of 2,000,000 shares of common stock to the holder(s) of the note. There will be
an additional penalty of 2,000,000 shares for every thirty day period that the
issuer fails to tile a reg. statement after November 15, 2002.
9 For all shares not exhausted by the note conversion, CMS Inc. will
receive 10% of the remaining shares. The remaining company shares may be used
for (a) collateral for an equity line of credit to the company or it's
designees, (b) sold or privately placed, or (c) returned to tile company. In
this event CMS Inc. will be entitled to normal and customary brokerage
commissions and service fees.
10 Accepted this 27th day of September by GlobeTel Communications Corp.,
Xxxxxxxx X. Xxxxxx, Chief Operating Officer
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