EXHIBIT 1.1
STONEGATE SECURITIES
0000 XXXXXX XXXX, 0XX XXXXX
XXXXXX, XX 00000
000-000-0000
February 7, 2002
To: The undersigned persons and entities:
Gentlemen:
By this letter agreement (the "Agreement"), each of the undersigned
persons and entities (each, a "Shareholder" and collectively, the
"Shareholders"), retains Stonegate Securities, Inc., a Texas corporation
("Stonegate"), as its exclusive financial advisor, on the terms and subject to
the conditions set forth herein, in connection with the potential sale, in one
or more transactions, of the number of shares of common stock, par value $0.01
per share, of Precis, Inc., an Oklahoma corporation, listed under such
Shareholder's name on the signature page hereof (collectively, the "Shares").
This Agreement confirms the understanding between the Shareholders and Stonegate
with respect to the services Stonegate will provide and confirms the parties'
understanding concerning fees and expenses, indemnification obligations and
other matters. The appointment of Stonegate is exclusive and is for a period of
three (3) months commencing on the date of this Agreement (the "Appointment
Period").
1. SERVICES PROVIDED. Pursuant to Stonegate's activities on the
Company's behalf, Stonegate will use all commercially reasonable efforts to sell
the Shares during the Appointment Period in one or more transactions. In
addition, the Shareholders hereby appoint Xxxxxx Xxxxxxx (or in her absence,
Xxxx Xxxxx), as their agent and representative for the purposes set forth herein
(collectively, the "Representative"). In the event Stonegate receives any offers
to purchase Shares, Stonegate shall contact Representative. Representative shall
have the complete and absolute authority on behalf of each and every Shareholder
to accept or reject any such offer (in whole or in part) and to allocate the
Shares to be sold in connection with such offer as the Representative shall, in
Representative's sole and absolute discretion, determine. Stonegate shall be
entitled to rely on Representative's actions as being the action of the
Shareholders without any independent investigation or validation.
2. COMMISSION. In consideration for the services provided under the
terms of this Agreement, each of the Shareholders, severally and not jointly,
agrees to pay Stonegate a commission equal to five percent (5%) of the selling
price of the Shares sold by such Shareholders, which commission shall be paid
upon each sale of such Shares in accordance with the rules of National
Association of Securities Dealers (the "NASD").
February 7, 2002
Page 2
3. CERTAIN AGREEMENTS OF THE SHAREHOLDERS. Each Shareholder agrees to
make available to Stonegate all information relating to such Shareholder and the
Shares as Stonegate reasonably requests in connection with providing its
services hereunder. Each Shareholder acknowledges that Stonegate may rely on the
completeness and accuracy of the information furnished to it by the
Shareholders. Each Shareholder agrees that during the Appointment Period, such
Shareholder will not sell, transfer, assign or in anyway encumber or hypothecate
the Shares owned by such Shareholder. Each Shareholder, severally and not
jointly, represents and warrants to Stonegate that such Shareholder owns the
Shares listed under such Shareholder's name on the signature page hereof, free
and clear of any liens, restrictions or encumbrances of any kind, and such
Shares at the time of sale will be registered under the Securities Act of 1933,
as amended.
4. NON-CIRCUMVENTION. Each Shareholder agrees that from and after the
date hereof and for a period of one (1) year following the expiration of the
Appointment Period, such Shareholder will not enter into any agreement,
transaction or arrangement with any of the potential purchasers of the Shares
(or any of their affiliates) which Stonegate has identified to such Shareholder
and which Stonegate has contacted regarding such purchase, unless such
Shareholder notifies Stonegate in writing and pays Stonegate a commission equal
to five percent (5%) of the sales price of the Shares sold by such Shareholder.
5. ARBITRATION. ANY CLAIM OR DISPUTE ARISING OUT OF THIS AGREEMENT
SHALL BE SUBMITTED BY THE PARTIES TO BINDING AND NON-APPEALABLE ARBITRATION BY
THE NASD.
6. GOVERNING LAW. This Agreement is governed by the laws of the State
of Texas, without regard to principles of conflicts of laws.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, except
as otherwise explicitly provided, supersedes all prior understandings, written
or oral, with respect to the subject matter hereof. This Agreement may be
amended by an agreement in writing signed by Stonegate and each of the
Shareholders.
8. MISCELLANEOUS. Any determination that any provision of this
Agreement may be or is unenforceable shall not affect the enforceability of the
remaining provisions of this Agreement. The section headings in this Agreement
are for convenience of reference and are not to be deemed to be a part of this
Agreement. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original but all of which shall constitute one
and the same instrument.
If the terms set forth in this Agreement are acceptable to you, please
sign and date the enclosed copy of this letter and return it to Stonegate.
STONEGATE SECURITIES, INC.
By:/s/ XXXXX X. XXXXXXXX
Title: President
AGREED TO AND ACCEPTED
as of the date first set forth above:
PRECIS, INC.
By:/s/ XXXXXX X. XXXXXXX
---------------------
Title: President
---------
SHAREHOLDERS:/s/XXXXXX X. XXXX
-----------------
[Name]
Number of Shares: 900,000
-------
/s/ XXXX X. XXXXXX
-----------------_
[Name]
Number of Shares: 1,000,000
---------
REPRESENTATIVES:
The undersigned persons agree to be the
Representatives as provided in this Agreement:
/s/ XXXXXX X. XXXXXXX
----------------------
Xxxxxx Xxxxxxx
/s/ XXXX XXXXX
--------------
Xxxx Xxxxx
EXHIBIT A
Recognizing that transactions of this type contemplated in the
engagement sometimes result in litigation and that Stonegate's role is advisory,
the Company agrees to indemnify and hold harmless Stonegate, its partners,
employees, agents, affiliates and persons deemed to be in control
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of Stonegate within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively, the "Indemnified Parties"), from and against any claims,
damages and liabilities, joint or several, related to or arising in any manner
out of any transaction, proposal or any other matter (the "Matters")
contemplated by the engagement of Stonegate hereunder. The Company also agrees
that neither Stonegate nor any other Indemnified Party shall have any liability
to the Company or its affiliates, partners, directors, agents, employees,
controlling persons or securityholders for any losses, claims or expenses
related to or arising out of any Matters. The Company will promptly reimburse
any Indemnified Party for all reasonable expenses as incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim related to or arising in any manner out of any Matter contemplated by the
engagement of Stonegate hereunder, or any action or proceeding arising
therefrom; provided, however, that each Indemnified Party so reimbursed shall
repay such expenses in the event that it is ultimately determined that such
Indemnified Party is not entitled to indemnification for such Matter pursuant to
the provisions of this engagement letter.
The Company may assume the defense of any litigation or proceeding in
respect of which indemnity may be sought hereunder, including the employment of
counsel and experts reasonably satisfactory to Stonegate and the payment of the
fees and expenses of such counsel and experts, in which event, except as
provided below, the Company shall not be liable for the fees and expenses of any
other counsel or expert retained by any Indemnified Party in connection with
such litigation or proceeding. In any such litigation or proceeding the defense
of which the Company shall have so assumed, any Indemnified Party shall have the
right to participate in such litigation or proceeding and to retain its own
counsel and experts, but the fees and expenses of such counsel and experts shall
be at the expense of such Indemnified Party unless (i) the Company and such
Indemnified Party shall have mutually agreed in writing to the retention of such
counsel or experts, (ii) the Company shall have failed in a timely manner to
assume the defense of, and employ counsel or experts reasonably satisfactory to
Stonegate in, such litigation or proceeding, or (iii) the named parties to any
such litigation or proceeding (including any impleaded parties) include the
Company and such Indemnified Party and representation of the Company and any
Indemnified party by the same counsel or experts would, in the reasonable
opinion of Stonegate, be inappropriate due to actual or potential differing
interests between the Company and any such Indemnified Party. Notwithstanding
the foregoing, in no event shall the Company be obligated to reimburse the fees
or expenses of more than one counsel for any Indemnified Party.
The Company shall not be liable, and the Indemnified Parties shall not
be exculpated, in respect of any claims, damages, liabilities or expenses that
are finally judicially determined to have resulted directly from the gross
negligence or willful misconduct of an Indemnified Party. The Company agrees
that the exculpation, indemnification and reimbursement commitments set forth in
this engagement letter shall apply whether or not such Indemnified Party is a
formal party to any such claim, action or proceeding. Neither the Company nor an
Indemnified Party shall be liable for any settlement of any litigation or
proceeding effected without its written consent, unless such settlement,
compromise or consent includes an unconditional release of the Company or each
Indemnified party, as the case may be, from all liability arising out of such
claim, action, suit or proceeding.
The Company agrees that if any exculpation, indemnification or
reimbursement sought pursuant to this letter were for any reason not to be
available to any Indemnified Party or insufficient to hold it harmless as and to
the extent contemplated by this letter, then the Company shall contribute to the
amount paid or payable by the Indemnified Party as a result of the claims,
damages and liabilities in such proportion as is appropriate to reflect the
relative benefits to the Company on the one hand, and Stonegate on the other
hand, in connection with the transaction to which such
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exculpation, indemnification or reimbursement relates and, to the extent
required by applicable law, the relative faults of such parties as well as any
other equitable considerations. The Company and Stonegate agree that it would
not be just and equitable if the contribution provided for herein were
determined by pro rata allocation or any other method which does not take into
account the equitable considerations referred to above. It is hereby agreed that
the relative benefits to the Company, on the one hand, and Stonegate, on the
other hand, with respect to this engagement shall be deemed to be in the same
proportion as (i) the Aggregate Transaction Value or the Matter (whether or not
consummated) for which Stonegate is engaged to render financial advisory
services bears to (ii) the fee paid to Stonegate in connection with such
engagement. In no other event shall Stonegate contribute in excess of the amount
actually received pursuant to the terms of this engagement letter.
The exculpation, indemnity, reimbursement and contribution obligations
of the Company shall be in addition to any liability which the Company may
otherwise have and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company or an
Indemnified Party.
The exculpation, indemnity, reimbursement and contribution provided
herein shall remain operative and in full force and effect regardless of (i) any
withdrawal, termination or consummation of or failure to initiate or consummate
any transaction referred to herein, (ii) any investigation made by or on behalf
of any party hereto or any person controlling (within the meaning of Section 15
of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended) any party hereto, (iii) any termination or the
completion or expiration of this agreement or Stonegate's engagement as the
Company's financial advisor, and (iv) whether or not Stonegate shall, or shall
not be called upon to, render any formal or informal advice in the course of
such engagement. All expenses, retainer and compensation obligations of the
Company contained in this letter agreement will survive the termination of this
agreement.
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