EXHIBIT 4.9
RETAIL/INSTITUTIONAL ENGAGEMENT
AGREEMENT
February 24, 2004
David L. Morash
Chief Operating Officer
Axesstel, Inc.
15373 Innovation Drive
San Diego, CA 92128
Dear Mr. Morash:
This Engagement Agreement
(“Agreement”) shall serve to set forth the terms and
conditions by which Monico Capital Partners, LLC
(“Monico”) will provide financial advisory and other
professional services to Axesstel, Inc. (“Company”).
Monico will act as the Company’s Placement Agent and assist
it in a private offering of its securities (the
“Offering”) on a “best efforts” basis,
pursuant to the terms and conditions as set forth
herein.
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1)
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Structure
of Offering . Monico
will act as the Company’s Placement Agent respecting matters
relating to the financing of its business, mergers and acquisitions
and the offering of the Company’s stock.
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The Company proposes, through a
Private Placement Memorandum (“PPM”) or other approved
financing instrument, to raise a minimum of three million dollars
($3,000,000) of capital through the issuance of newly issued and
registered or unregistered common stock, preferred stock, debt, or
any combination thereof, on a “best efforts” basis (the
“Securities”).
The actual amount, structure and
pricing of the proposed transaction will be determined by the
Company after consultation with Monico and completion of an
analysis of the business and market conditions for such
transaction.
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2)
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Term . This Agreement shall terminate at the earlier
of (a) twelve (12) months from the date of execution hereof (the
“Effective Date”) or (b) the completion of a
Transaction (as defined below), unless earlier terminated in
accordance with the immediately following sentence. This entire
Agreement is cancelable by either party at any time upon 30 days
written notice.
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3)
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Fees . The Company will pay to Monico, as
consideration for the services described herein:
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A cash fee of five and point seven
five percent (5.75%) of all amounts up to Thirty (30) million
dollars received by the Company in a Transaction for which Monico
is entitled to compensation under this Section 3.
A “Transaction” shall
include any single transaction or series of combinations of
transactions, other than in the ordinary course of trade or
business whereby, directly or indirectly, control of an interest of
the Company or any of its businesses or assets is transferred for
Consideration (as
-1-
defined below) to any other party,
their nominees, assignees, or affiliates. A Transaction shall
include, without limitation, a sale or exchange of capital stock or
assets, loans, guarantees or assumption of indebtedness, leases of
assets with or without purchase options, a merger or consolidation,
a tender or exchange offer, leveraged buyout, the formation of a
joint venture, minority investment or partnership or any similar
transaction; Consideration shall mean the sum of (i) cash, (ii)
market value of securities or interests, and (iii) indebtedness for
money loaned or borrowed (including guarantees and pension
liabilities) assumed in connection with a Transaction.
Five (5) year warrants (the
“Warrants”) for the purchase of an equity interest of
the Company equal to (a) five percent (5%) of up to $4 million of
the Securities subject to a Transaction, and (b) two percent (2%)
of the Securities in excess of $4 million, including but not
limited to securities issued, to be issued through exercise of a
convertible instrument and/or exercisable warrants. The Warrants
shall be exercisable at the per share price of securities sold in
this transaction. The shares underlying the Warrants will have
standard piggyback registration rights and a cashless exercise
provision.
All forms of compensation set forth
in this Section 3 are payable to Monico only with respect to any
completed Transaction by and between the Company and any person or
entity (including their affiliates) as a result of an introduction
of such person or entity to the Company by Monico during the term
of this Agreement and for the period ending six months thereafter,
after giving effect to any and all extensions to this Agreement.
The persons and entities that have been introduced to the Company
by Monico as of the date of this Agreement are listed on Exhibit
A hereto and Monico shall update Exhibit A on a [weekly]
basis to reflect any new introductions. Monico shall have no right
to any compensation for any completed Transaction with the parties
listed on Exhibit A hereto, as periodically updated by the
Company.
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4)
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Expenses : The Company is responsible for all costs
related to this Offering, including without limitation the
preparation and production of a PPM, legal fees, printing and
reproduction costs, accounting and other professional services,
Blue Sky registration fees, road show and travel related expense
and miscellaneous out-of-pocket expenses incurred in connection
with this engagement. The Company will be required to pay for all
expenses in advance by either providing for direct billing to the
Company or Company’s credit card. All expenses must be
pre-approved by the Company and reimbursement of Monico’s
expenses are conditioned upon the provision of underlying
documentation as reasonably requested by the Company. Expenses due
Monico will be deducted from the proceeds of a Closing and are
subject to applicable charges pursuant to Section 6.
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The Company will pay the cost of a
background check of any or all of the Company’s officers and
key management that Monico reasonably determines necessary to
conduct. The Company will not be responsible for the due diligence
expenses from interested investors.
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5)
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Late Fees
and Finance Charges :
All fees earned and expenses incurred by Monico that are not
received by Monico by the respective due dates are subject to a
late fee and interest will be charged at
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