Exhibit 10.1 - Investment Advisory Agreement
Investment Advisory Agreement
THIS INVESTMENT ADVISORY AGREEMENT ("Agreement") is made and entered into
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.
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:
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.
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 furnish 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:
(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 in consideration of its execution of this Agreement.
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) Additionally, the Company shall issue to Advisor immediately
50,000 shares of Series A Preferred Stock of the Company.
(e) The Advisor shall purchase 1,500,000 Class A, Class B, Class C
and Class D Warrants, adjusted by future subdivisions, combinations
or mergers, for the cash price of $100.00.
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 Advisor's 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:
(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 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.
(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 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 (ii) 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: If 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
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.
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.
In Witness Whereof, the parties have executed this Agreement effective as of
the Effective Date
The Compaany: The Advisor:
AZTEC COMMUNICATIONS GROUP, INC. SBI USA, LLC
By ____________________________ By: ____________________
L. Xxxxxx Xxxxxxxxx Name:
Chairman & CEO Title:
