EXHIBIT 10.35
XXXXXX, XXXXX & CO., INC.
INVESTMENT BANKERS * INVESTMENT BROKERS
ONE CAPITAL CENTER
00 Xxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
(000) 000-0000 FAX: (000) 000-0000
November 24, 1999
Xxxxx X. Xxxxxx
Chairman
IPVoice -Com, Inc.
Via Facsimile# 000-000-0000
Dear Xx. Xxxxxx:
This letter will confirm our understanding with you, with respect to our
services as broker and financial advisor in connection with your interest in
seeking non-bank financing for XXXxxxx.Xxx, Inc. (the "Company").
During the period from the date hereof through March 24,2000, XxXxxx, Xxxxx &
Co., Inc. shall have the right to offer for sale an interest in the Company,
including but not limited to, common stock, preferred stock, convertible
preferred stock, debentures, convertible debentures of the Company (the
"Securities") or any assets of the Company (the "Assets"). XxXxxx, Xxxxx& Co.
will use its best efforts to obtain acceptable purchasers of the securities
offered in an amount up to $5 million.
In connection therewith, XxXxxx Xxxxx & Co. will:
a) Assist XXXxxxx.Xxx, Inc in preparing financial documents and
offering documents (the "Offering Documents");
b) Advise and assist XXXxxxx.Xxx, Inc. in recapitalizing the company's
financial structure, and
c) Advise and assist in negotiating the transaction.
It is agreed that XxXxxx, Xxxxx & Co. shall have earned and be entitled to a fee
as set forth below if during the term of this Agreement:
a) We procure a party ready, willing and able to purchase any
Securities of the Company at a price and on the terms that are satisfactory
to you as evidenced by an executed Agreement; or
b) The Company sells Securities and/or Assets of the Company to a
party or through a party, either procured by us, or referred by us.
The fee earned hereunder shall be equal to ten percent (10%) of the first
S5,000.000.00, and eight percent (8%) of the balance of consideration in excess
of S5,000,000.00; It is further agreed that XxXxxx, Xxxxx and Co., Inc. shall
receive it's fee payable in cash prior to funds being released to the company.
XxXxxx, Xxxxx and Co., Inc. shall also receive three year term warrants
representing two percent (2%) of the proceeds raised, with a strike price 125%
of the bid price on the date of closing. Such warrants shall have piggy-back
registration rights.
It is further agreed that XxXxxx, Xxxxx & Co. shall be entitled to a
non-refundable Retainer/Investment Banking fee of 10,000 shares of restricted
common stock of XXXxxxx.Xxx, Inc. payable at the time that this agreement is
signed (with piggyback registration rights).
In addition to the above-mentioned fees, it is hereby agreed that XxXxxx, Xxxxx
& Co. will be reimbursed for expenses incurred, when pre-approved by the
Company.
During the time of this Agreement, November 24, 1999 through March 24,2000
XxXxxx, Xxxxx and Co., Inc. shall have the exclusive right to offer the
securities for XXXxxxx.Xxx, Inc. and you shall refer all inquiries regarding the
possible sale of any of the Company's Securities and/or Assets to us.
If within one year after March 24, 2000 the Company sells or transfers any or
all of its Assets, or Securities of the Company are sold or transferred to a
party with whom XxXxxx, Xxxxx & Co. introduced to xXXxxxx.Xxx, Inc. the Company
shall pay XxXxxx, Xxxxx & Co., the fee set forth herein above.
You shall indemnify and hold us harmless against any and all loss, claim,
damage, expense or liability, joint or several (including but not limited to any
and all expenses incurred in investigating, preparing or defending against all
litigation, commenced or threatened, or any claim whatsoever) to which we may
become subject under any statute or at common law or under the laws of foreign
countries, arising out of or based upon any untrue statement or alleged untrue
statement of material fact contained in any statement signed by you concerning
the Company.
You shall agree to hold the names of our investors strictly confidential for a
period of twenty-four months from the closing of the offering except as required
by law. Furthermore, you agree not to solicit future investments from our
investors without our express written permission, and at such time that any
investment by such investors is consummated, shall entitle us to a placement fee
of six (6) percent.
Representations and Warranties
The Company represents, warrants and agrees with you for the benefit that:
a) On the date hereof the Company is, and at all times to and including the time
the Securities and/or Assets are sold by the Company (the "Closing Time") will
be, duly incorporated, validly existing and in good standing as a corporation
under the laws of the State of Delaware with full power and authority to conduct
its business as now being conducted and to own its properties and to perform its
obligations under this Agreement.
b) All action required to be taken by the Company as a condition to the sale of
the Securities and/or Assets to qualified purchasers has been, or prior to
Closing Time will have been, taken and upon payment and delivery therefore the
Securities will be binding obligations of the Company enforceable in accordance
with their terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization and other laws or equitable principles now or
hereafter enacted relating to or affecting the enforcement of creditor's rights
generally.
c) From the commencement of the Offering Period through Closing Time, the
Offering Documents will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this paragraph
shall not apply to statements contained in or omitted from the Offering
Documents made in reliance upon or in conformity with information furnished to
the Company by you or on your behalf or omissions from the Offering Documents
relating to you or your activities With respect to the Company and/or the
Securities.
d) There is no litigation or governmental proceeding pending, or the knowledge
of the Company threatened, against, or involving the property or business of the
Company which would materially and adversely affect the financial condition of
the Company.
e) The balance sheet and income statement of the Company, present fairly the
financial position of the Company as of the dates thereof, and there has been no
material adverse change of the financial condition of the Company since the date
of the most recent of such financial statements.
f) The forecasts of operating expenses, estimated cash flow, taxable income,
depreciation and the assumptions on which they are based which are expected by
the Company to be included in the Offering Documents, are believed by management
of the Company to be reasonable.
It is further agreed that reference to all fees, and amounts raised shall be in
US dollars.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof whereupon this Letter
Agreement together with all counterparts hereof shall become an effective Letter
Agreement, binding between the Company and XxXxxx, Xxxxx & Co., Inc.
Agreed to as of the date first written above.
ACCEPTED AND AGREED TO:
XXXxxxx.xxx, Inc. XxXxxx, Xxxxx & Co., Inc.
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxx X. Xxxxxx
----------------------------- --------------------------
Xxxxx X. Xxxxxx Xxxx X. Xxxxxx
Chairman Senior Vice President
Corporate Finance
Date: 29th November 1999 Date: 11/30/99
XXXXXX, XXXXX & CO., INC.
INVESTMENT BANKERS * INVESTMENT BROKERS
ONE CAPITAL CENTER
00 Xxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
(000) 000-0000 FAX: (000) 000-0000
TERM SHEET
XXXXXXX.Xxx, Inc.
Stock Price $2.00
Market Capitalization $______million (approx.)
Average DailyVolume_______
- Offering amount: $2,500,000.00
- Use of proceeds: Recruitment of senior management, and purchase and
installation of additional gateways.
- Security: Series A Cumulative Convertible Preferred
- Issue Price: $100.00-
- Term: 3 years
- Accretion rate: 8% in cash or stock accreted, and paid at the time of
conversion
- Conversion terms: 25% discount to five-day average bid prior to conversion
- Ceiling: 130% of the bid at the time of closing
- Call Feature: Callable for cash on 30 days notice for accrued dividends,
plus 20% compounded annually if the average bid price for the 30 days
preceding such call date is below $1.50 per share. I - Automatic conversion
at maturity: Each share of Series A Preferred Stock-outstanding on the date
which is three years from the closing date, shall at the option of the
company either (1) be converted into common stock on such date equal in
value to 110% of the stated value of the outstanding Series A Preferred
Stock where the common stock is valued at 100% of the closing bid price, or
(2) redeemed by the company for cash in an amount equal to 110% of the
stated value of the Series A Preferred Stock being redeemed.
Series A shall rank:
1. Junior to any security specifically ranking by it's terms senior to
the Series A Preferred Stock.
2. Prior to the company's common stock
3. Prior to any class or series of capital stock hereafter created not
specifically ranking by its term's senior to or on parity with any
Series A Preferred Stock.
- Voting rights: The holders of the Series A Preferred Stock shall have no
voting rights
- Warrants: 10,000 per $100,000.00 at an exercise price 125% over the bid
price on the date of closing. The warrants shall have a three-year term,
and shall have piggyback registration rights, and if not registered within
180 days, a demand registration will be offered.
- Registration: Filed in thirty days, effective in 120 days.
