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AGREEMENT
This
Agreement (“Agreement”) is made and entered into
as of this 26th day of December, 2007, between
PaceTel,
Inc .
(“Contractor”), located at 520 Jackson Avenue,
Glencoe, Illinois 60022, and Capital
Growth Systems, Inc .
d/b/a Global
Capacity Group, Inc .
(“CGSI”), located at 500 W. Madison Suite 2060,
Chicago, Illinois 60661.
RECITALS
On
or about April 12, 2006, 20/20 Technologies, Inc.
(“20/20”) and Contractor entered into a Consulting
Agreement, by which 20/20 agreed to pay Contractor a success
fee if 20/20 successfully concluded a business arrangement
with, among others, CGSI. Subsequently, 20/20 successfully
concluded a business arrangement with CGSI, resulting in
Contractor earning the success fee in the amount of
$250,000.00 (“Success Fee”).
CGSI
desires to resolve amicably a dispute with Contractor
concerning the payment of the Success Fee and to engage
Contractor as a contractor to receive certain services from
the Contractor, as defined herein. The Contractor is
interested in providing these services.
CGSI
and the Contractor both desire to enter into this Agreement to
set forth the terms and conditions on which those services
will be provided and to resolve amicably the dispute
concerning the payment of the Success Fee.
NOW,
THEREFORE, for valuable consideration, including the foregoing
Recitals which are made a part hereof, the receipt and
sufficiency of which are acknowledged, CGSI and the Contractor
agree as follows:
1.
Success Fee .
(a)
In full satisfaction of the Success Fee, and all claims that
Contractor has against CGSI or 20/20 for the failure to pay to
Contractor the Success Fee prior to the execution of this
Agreement, CGSI shall pay to Contractor the following: (i) the sum
of $250,000.00 (“Settlement Sum“) payable in 17,
consecutive monthly installments, with the first installment of
$15,000.00 commencing on the date of the execution of this
Agreement and continuing thereafter in 15 consecutive monthly
installments of $15,000.00 each due on the first day of each
successive 16 calendar months thereafter, with a final installment
in the amount of $10,000.00 due on the first day of the 17th
calendar month from the date of execution
(“Installments”); and, (ii) upon the execution of this
Agreement, a warrant for 300,000 shares of common capital stock of
CGSI in the form of
Exhibit 1 ,
attached hereto and made a part hereof, which the parties shall
execute and issue to Contractor upon the execution of this
Agreement and which represents a discount to the closing price of
the Company’s common stock as of the date of this Agreement
(“Warrant”). In connection with receipt of the Warrant,
Contractor represents and warrants that it is an “accredited
investor“ as that term is defined in Regulation D by virtue
of each of its beneficial owners having a net worth in excess of
$1,000,000.00.
(b)
In the event any Installment is not timely paid, upon written
notice from Contractor to CGSI and CGSI‘s failure to pay the
outstanding Installment(s) within 60 days of the service of this
written notice, CGSI shall be in default and all Installments shall
be accelerated automatically without further notice and all
remaining balance of the Settlement Sum shall be immediately due in
full.
(c)
The remaining balance of the Settlement Sum shall become
immediately due and payable in full, with all outstanding
Installments accelerated upon delivery of written notice from the
Contractor, if any of the following events shall occur
(“Corporate Event“): CGSI shall sell substantially all
of its assets or business through a merger, sale of assets, sale of
stock or similar corporate reorganization. In such case(s), the
remaining balance of the Settlement Sum shall be due at the
consummation of the Corporate Event.
(d)
Upon default, interest shall accrue on the unpaid portion of the
Settlement Sum at the rate of prime (as announced in the Wall
Street Journal) plus one percent per annum, simple
interest.
2.
Services .
The Contractor and CGSI agree that upon the execution of this
Agreement, they will execute and deliver the Finders Fee Agreement,
attached hereto and made a part hereof as
Exhibit 2 (“Finders
Fee Agreement”), by which Contractor shall provide, on the
terms and conditions of this Finders Fee Agreement, consulting,
research and business advice regarding strategic alliances and
other transactions with certain reseller companies as more
specifically described in the Finders Fee Agreement. In addition to
the Success Fee and the payments in satisfaction of the Success Fee
set forth in
Section 1 above,
Contractor will be paid an additional success fee to the extent
that he earns the same pursuant to the Finders Fee
Agreement.
3.
Term of Agreement .
Neither party may terminate this Agreement, but the Finders Fee
Agreement may be terminated pursuant to its terms.
4.
Binding .
All of the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of, and be enforceable by the
heirs, successors and assigns of the parties to this Agreement,
including, without limitation, any successor to CGSI, whether by
merger, consolidation, sale of stock, sale of assets or
otherwise.
5.
No Waiver of Rights .
No delay or failure on the part of Contractor to exercise any
right, power or privilege under this Agreement shall operate as a
waiver thereof, and no single or partial exercise of any right,
power or privilege shall preclude any other or further exercise
thereof or the exercise of any other power or right, or be deemed
to establish a custom or course of dealing or performance between
the parties hereto. Upon default the parties shall have such
cumulative remedies as are provided by law or equity. The party
prevailing in litigation shall be entitled to its reasonable
attorney’s fees.
6.
Governing Law .
This Agreement shall be construed and enforced under Illinois law,
with venue proper in Cook County, Illinois.
7.
Counterpart Signatures/Fax Signatures .
This Agreement may be executed in counterparts and by fax exchange
with the same effect as if executed by both parties with original
signatures.
8.
Entire Agreement .
This Agreement contains the entire agreement between the parties
and supersede all earlier or contemporaneous agreements between or
representation made by the parties. This agreement may be changed
only in writing executed on behalf of both parties. Both Contractor
and CGSI (their agents and/or legal counsel) have reviewed and
understood the provisions of this Agreement. The obligations of the
parties will survive any termination of this
Agreement.
9.
Severability .
If any portion of this Agreement is held to be unenforceable or
invalid, the p
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