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EXHIBIT 10.23
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is entered into as of the 6th
day of December, 1999 ("Effective Date"), between eSat, Inc., a Nevada
corporation (the "Company"), and Herbeck Consulting Group, Inc. specifically
Terry Herbeck (the "Consultant").
WITNESSETH:
WHEREAS, it is the desire of the Company to use the services of the
Consultant upon the terms and subject to the conditions set forth herein; and
WHEREAS, it is the desire of the Consultant to accept the Company's offer
for services upon the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants,
conditions and agreements contained herein and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, each intending to be legally bound hereby, agree as follows:
1. Consulting Terms. The Company hereby agrees to retain the Consultant
and the Consultant hereby agrees to be retained by the Company upon the terms
and subject to the conditions set forth herein for the period of service as set
forth in Section 2 hereof (the "Period of service").
2. Period of Service. Subject to extension or termination as hereinafter
provided, the Period of Service hereunder shall be from the date hereof (the
"Effective Date") through the third anniversary of the Effective Date.
Thereafter, the Period of Service may be extended for successive one (1) year
periods (each, a "Renewal Period") at the option of the Company upon delivery of
written notice by the Company to the Consultant, subject to acceptance by the
Consultant, not less than three (3) months prior to the expiration of the Period
of Service, as previously extended. The phrase "Period of Service" as used
herein shall, unless otherwise indicated: (a) specifically include any
extensions permitted hereunder or provided herein, except as otherwise noted;
and (b) be deemed to have terminated as of the date of any notice provided to
the Consultant pursuant to Section 9 hereof, notwithstanding the Company's
obligation to pay the Consultant pursuant to Subsections 9(b) and 9(c) hereof.
3. Office and Duties. During the Period of Service:
(a) The Consultant shall be retained to act as the Chief Operating
Officer of the Company, having the authority and duties attendant to such
position as set forth in the bylaws of the Company (the "Bylaws") and having
such responsibilities as may reasonably be prescribed for such position by the
board of directors of the Company (the "Board of Directors") in accordance with
the Bylaws:
(b) the Consultant shall devote substantially all of his time to the
business and affairs of the Company except for vacations, illness or
incapacity, as herein after set forth.
Notwithstanding the preceding sentence, nothing in this Agreement shall
preclude the Consultant from devoting reasonable amounts of time:
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(i) to serving as a director, officer or member of a committee
of any organization or entity involving no conflict of interest with the
Company; or
(ii) engaging in charitable and community activities;
provided, however, that such activities do not interfere with the performance
by the Consultant of his duties hereunder. In consideration of such service,
the Consultant agrees that he shall not, directly or indirectly, individually
or as a member of any partnership or joint venture, or as an officer, director,
stockholder, Consultant or agent of any other person, firm, corporation,
business organization or other entity, engage in any trade or business activity
or pursuit for his own account or for or on behalf of any other person, firm,
corporation, business organization or other entity, irrespective of whether the
same competes, conflicts or interferes with that of the Company or the
performance of the Consultant's obligations hereunder. Notwithstanding the
foregoing, nothing contained herein shall be construed to prevent the
Consultant from: (x) investing in the stock of any corporation which does not
compete with the Company, which is listed on a national securities exchange
or traded in the over-the-counter market if the Consultant does not and will
not, as a result of such investment, own more than five percent (5%) of the
stock of such corporation ("Permitted Investments"); or (y) engaging in
personal business ventures to which the Consultant devotes time outside of the
time required to be devoted to the business of the Company hereunder.
(c) the Consultant shall be entitled to three (3) weeks of vacation
per year, subject to adjustment at the discretion of the Board of Directors.
4. Compensation and Benefits. In exchange for the services rendered by the
Consultant pursuant hereto in any capacity during the Period of Service, the
Consultant shall be compensated as follows:
(a) Compensation. Commencing on the Effective Date of this Agreement,
the Company shall pay the Consultant a salary equal to One Hundred Seventy Five
Thousand Dollars ($175,000) per annum at a rate of Fourteen Thousand Five
Hundred Eighty Three Dollars and Thirty Three Cents ($14,583.33) per month.
(b) Discretionary Bonuses. In addition to any bonus set forth above,
the Consultant shall be entitled to receive a bonus from time to time if, in
the sole judgment of the Board of Directors, the financial performance of the
Company or the services rendered by the Consultant merit such a bonus.
(c) Options. In consideration of the Consultant's agreement to render
the services provided herein, the Company shall grant to the Consultant an
option exercisable to purchase an aggregate of 300,000 shares of the Company's
(Section 144) common stock at an exercise price of Three Dollars and Fifty
Cents ($3.50) per share. Such options shall vest and become exercisable in
accordance with the terms and conditions set forth in the Stock Option
Agreement, which is attached hereto as Addendum A of this Agreement.
5. Business Expenses. The Company shall reimburse the Consultant for all
reasonable travel or other expenses incurred by the Consultant in connection
with the performance of his duties under this Agreement, provided that the same
are previously authorized by the Company in accordance with such procedures as
the Company may from time to time establish for Consultants and as required to
preserve any deductions for federal income taxation purposes to which the
Company may be entitled.
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6. Automobile Allowance. The Consultant shall not be entitled to a
monthly automobile allowance.
7. Group Medical and Dental Insurance for the Consultant and his Family.
Group medical and dental insurance will be provided by the Company for the
Consultant and his immediate family members, pursuant to the terms and
conditions of the Company's group medical and dental policies.
8. Other Benefits. The Consultants shall be entitled to participate in
fringe benefit, deferred compensation and stock option plans or programs of the
Company, if any, to the extent that his position, tenure, salary, age, health
and other qualifications make him eligible to participate, subject to the rules
and regulations applicable thereto. Such additional benefits shall include, but
not be limited to, paid sick leave and disability and term life insurance (all
in accordance with the group policies of the Company) and professional dues
and association memberships,
9. Termination of Service. Notwithstanding any other provision of this
Agreement, service hereunder may be terminated:
(a) By the Company, in the event of the Consultant's death or
Disability (as hereinafter defined) or for Just Cause (as hereinafter defined).
"Just Cause" shall mean: (i) the Consultant's indictment for, conviction of or
the entering into of a plea of guilty to a crime involving a felonious act or
acts, including dishonesty, fraud or moral turpitude by the Consultant; (ii)
prolonged or repeated absence from duty without the consent of the Company (for
reasons other than the Consultant's health or incapacity); (iii) habitual
engaging in any activity which is competitive with the business of the Company;
and (iv) willful misconduct, gross negligence or dishonesty on the part of the
Consultant relating to the performance of his duties hereunder. The Consultant
shall be deemed to have a "Disability" for purposes of this Agreement if he is
unable to perform with reasonable accommodation, by reason of physical or mental
incapacity, a material portion of his duties or obligations under this Agreement
for a period of one hundred twenty (120) consecutive days in any 365-day period.
The Board of Directors shall determine whether and when the Disability of the
Consultant has occurred and such determination shall not be arbitrary or
unreasonable. The Company shall provide written notice to the Consultant within
thirty (30) days after discovery of the occurrence of an event or circumstance
which constitutes "Just Cause," specify the event or circumstance giving rise to
the Company's exercise of its right hereunder and, with respect to Just Cause
arising under either Subsection 9(a)(i), (iii) or (iv), the Consultant's service
hereunder shall be deemed terminated as of the date of such notice. With respect
to Just Cause arising under Subsection 9(a)(ii), the Company shall provide the
Consultant with thirty (30) days written notice of such violation and the
Consultant shall be given reasonable opportunity during such thirty (30) day
period to cure the subject violation;
(b) By the Company, in its sole and absolute discretion, provided that in
such event the Company shall, as liquidated damages or severance pay, or both,
pay the Consultant an amount equal to the Consultant's then Monthly
Compensation (as defined in Section 4(a) hereof) for six (6) months; and
(c) By the Consultant (i) upon any material violation of any material
provision of this Agreement by the Company, which violation remains unremedied
for a period of thirty (30) days after written notice of the same is delivered
to the Company by the Consultant, and (ii) upon any material change in
the responsibilities of the Consultant, without the Consultant's prior consent;
provided that, in such event the Company shall, as liquidated damages or
severance pay, or both, pay to the Consultant an amount equal to the
Consultant's Monthly Compensation for six (6) months.
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Nothing set forth in this section shall: (i) require the Consultant in the
event of termination pursuant to Subsections 9(b) or 9(c) above to mitigate
damages during the period in which the Consultant is receiving payment
thereunder (the "Severance Period"); or (ii) entitle the Company to offset the
amounts owed by the Company to the Consultant pursuant to Subsections 9(b) or
9(c) by any income or amounts owed by the Company to the Consultant pursuant to
Subsections 9(b) or 9(c) by any income or compensation received by the
Consultant from sources other than the Company during such Severance Period. In
addition, the Company shall not be entitled to withhold or otherwise offset any
amounts payable to the Consultant under Subsections 9(b) or 9(c) above in
response to any alleged violation by the Consultant of any of the obligations
which are imposed under this Agreement and survive termination hereof until
such time as court of competent jurisdiction or other appropriate governing
body has rendered judgment or otherwise made a determination with respect to
whether such violation has occurred.
10. Non-Solicitation. Notwithstanding any earlier termination, during the
Period of Service (including any Renewal Period) and for one (1) year
thereafter, the Consultant shall not: (i) solicit or induce any Consultant of
the Company to terminate his or her service or otherwise leave the Company's
employ or hire any such Consultant (unless the board of Directors shall have
authorized such service and the Company shall have consented thereto in
writing); or (ii) contact or solicit any clients or customers of the Company,
either as an individual or as a member of any partnership or joint venture, or
as an officer, director, stockholder, investor, Consultant or agent of any
other person, person, corporation, business organization or other entity.
11. Confidential Information. The parties hereto recognize that it is
fundamental to the business and operation of the Company, its affiliates,
subsidiaries and divisions to preserve the specialized knowledge, trade secrets,
and confidential information of the foregoing concerning the fields of
advertising, marketing and interactive solutions. The strength and good will of
the Company is derived from the specialized knowledge, trade secrets, and
confidential information generated from experience through the activities
undertaken by the Company, its affiliates, subsidiaries and divisions thereof.
The disclosure of any of such information and the knowledge thereof on the part
of competitors would be beneficial to such competitors and detrimental to the
Company, its affiliates, subsidiaries and divisions thereof, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques, concepts,
ideas, process developments (whether or not patentable), customer and client
agreements, vendor and supplier agreements and similar items or technologies. By
reason of his being a Consultant of the Company, (in the course of his service,
the Consultant has or shall have access to, and has obtained or shall obtain,
specialized knowledge, trade secrets and confidential information such as that
described herein about the business and operation of the Company, its
affiliates, subsidiaries and divisions thereof. Therefore, the Consultant hereby
agrees as follows, recognizing and acknowledging that the Company is relying on
the following in entering into this Agreement:
(a) The Consultant hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, any and all
right, title and interest of the Consultant in and to all creations, designs,
inventions, ideas, disclosures and improvements, whether patented or
unpatented, and copyrightable material, made or conceived by the Consultant
solely or jointly, in whole or in part, during or before the term hereof
(commencing with the date of the Consultant's service with the Company) which:
(i) relate to methods, apparatus, designs, products, processes or devices
created, promoted, marketed, distributed, sold, leased used, developed, relied
upon or otherwise provided by the Company or any affiliate, subsidiary or
division thereof; or (ii) otherwise relate to or pertain to the business,
operations or affairs of the Company or any affiliate, subsidiary or division
thereof. Whether during the Period of Service or thereafter, the Consultant
shall execute and deliver to the Company such formal transfers and assignments
and such other papers and documents as may be required of the Consultant to
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permit the Company or any person or entity designated by the Company to file,
enforce and prosecute the patent applications to any of the foregoing and, as
to copyrightable material, to obtain copyright thereon; and
(b) Notwithstanding any earlier termination, during the Period of
Service (including any Renewal Period) and for a period of one (1) year
thereafter, the Consultant shall, except as otherwise required by or compelled
by law, keep secret and retain in strict confidence, and shall not use,
disclose to others, or publish any information, other than information which is
in the public domain or becomes publicly available through no wrongful act on
the part of the Consultant, which information shall be deemed not to be
confidential information, relating to the business, operation or other affairs
of the Company, its affiliates, subsidiaries and divisions thereof, including
but not limited to confidential information concerning the design and marketing
practices, pricing practices, costs, profit margins, products, methods,
guidelines, procedures, engineering designs and standards, design
specifications, analytical techniques, technical information, customer, client,
vendor or supplier information, Consultant information, and any and all other
confidential information acquired by him in the course of his past or future
services for the Company or any affiliate, subsidiary or division or division
thereof. The Consultant shall hold as the Company's property all notes,
memoranda, books, records, papers, letters, formulas and other data and all
copies thereof and therefrom in any way relating to the business, operation or
other affairs of the Company, its affiliates, subsidiaries and divisions
thereof, whether made by him or otherwise coming into his possession. Upon
termination of his service or upon the demand of the Company, at any time, the
Consultant shall deliver the same to the Company within twenty-four (24) hours
of such termination or demand.
12. Reasonableness of Restrictions. The Consultant hereby agrees that the
restrictions in this Agreement, including without limitation, those relating to
the duration of the provisions hereof and the territory to which such
restrictions apply, are necessary and fundamental to the protection of the
business and operation of the Company, its affiliates, subsidiaries and
divisions thereof, and are reasonable and valid.
13. Reformation of Certain Provisions. In the event that a court of
competent jurisdiction determines that the non-solicitation or the
confidentiality provisions hereof are unreasonably broad or otherwise
unenforceable because of the length of their respective terms or the breadth of
their territorial scope, of for any other reason, the parties hereto agree that
such court may reform the terms and/or scope of such covenants so that the same
are reasonable and, as reformed, shall be enforceable.
14. Arbitration. Subject to Section 15 below, any controversy, dispute
and/or claim in any manner arising out of or relating to this Agreement; any
claim, including but not limited to any claim of race, age, national origin,
religion, sex, pregnancy, family leave, harassment, sexual orientation,
disability discrimination, defamation, infliction of emotional distress, breach
of contract, violation of public policy or statute, or wrongful termination
arising out of the voluntary or involuntary termination of the service, shall
be settled solely by final and binding arbitration in accordance with the
Service Dispute Resolution Rules of the American Arbitration Association. Any
arbitration proceeding shall take place in Orange County, California. Judgment
on any decision rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
15. Certain Provisions; Specific Performance. In the event of a breach by
the Consultant of the non-solicitation or confidentiality provisions hereof,
such breach shall not be subject to the arbitration provision of Section 14
above and the Company shall be entitled to seek immediate injunctive relief and
a decree of specific performance against the Consultant. Such remedy is
non-exclusive and shall be in
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addition to any other remedy to which the Company or any affiliate,
subsidiary or division thereof may be entitled.
16. Consolidation; Merger; Sale of Assets. Nothing in this Agreement shall
preclude the Company from combining, consolidating or merging with or into,
transferring all or substantially all of its assets to, or entering into a
partnership or joint venture with, another corporation or other entity, or
effecting any other kind of corporate combination, provided that, the
corporation resulting from or surviving such combination, consolidation or
merger, or to which such assets are transferred, or such partnership or joint
venture assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger, transfer or assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such resulting or surviving
transferee corporation or such partnership or such joint venture, and the term
"Company," as used in this Agreement, shall mean such corporation, partnership
or joint venture, or other entity and this Agreement shall continue in full
force and effect and shall entitle the Consultant and his heirs, beneficiaries
and representatives to exactly the same compensation, benefits, perquisites,
payments and other rights as would have been their entitlement had such
combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
17. Survival. Sections 9 through 15 shall survive the termination for any
reason of this Agreement (whether such termination is by the Company, by the
Consultant, upon the expiration of this Agreement by its terms or otherwise).
18. Severability. The provisions of this Agreement shall be considered
severable in the event that any of such provisions are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable. Such
invalid, or otherwise enforceable provisions shall be automatically replaced by
other provisions which are valid and unenforceable and which are as similar as
possible in term and intent to those provisions deemed to be invalid, void or
otherwise unenforceable. Notwithstanding the foregoing, the remaining
provisions hereof shall remain enforceable to the fullest extent permitted by
law.
19. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the Company and the Consultant with respect to the subject
matter hereof. This Agreement may not be amended, changed, modified or
discharged, nor may any provision hereof be waived, except by an instrument in
writing, executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification or discharge is sought. No course of
conduct or dealing shall be construed to modify, amend or otherwise affect any
of the provisions hereof.
20. Notices. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
physically delivered, delivered by express mail or other expedited service or
upon receipt if mailed, postage prepaid, via first mail as follows:
a) To the Company: ESat, Inc.
16520 Harbor Boulevard, Bldg. G
Fountain Valley, California 92708
Attention: President
b) To the Consultant: Terry Herbeck
30902 Clubhouse Dr. #24D
Laguna Niguel, CA 92677
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(949) 388-9280
and/or to such other persons and addresses as any party hereto shall have
specified in writing to the other.
21. Assignability. This Agreement shall not be assignable by the
Consultant, but shall be binding upon and shall inure to the benefit of his
heirs, executors, administrators and legal representatives. This Agreement shall
be assignable by the Company to any affiliate, subsidiary or division thereof
and to any successor interest.
22. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California, without regard to the principles of
conflicts of laws thereof.
23. Waiver and Further Agreement. Any waiver or any breach of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition hereof, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
24. Headings of No Effect. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
eSAT, INC.
By /s/ MIKE PALMER
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Mike Palmer, CEO
THE CONSULTANT:
By: /s/ TERRY HERBECK
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Terry Herbeck
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