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Exhibit 10.3
XXXXXXX CAPITAL ADVISORS
A division of Magna Securities Corp.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fox 000-000-0000
Email: xxxxxxxx@xxxxxxxxxxxxxx.xxx
September 27, 2000
Auspex Systems, Inc.
0000 Xxxxx Xxxx
Xxxxxxxx X
Xxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxx
Gentlemen,
This letter agreement (this "Agreement") will confirm the understanding
and agreement between Auspex Systems, Inc. (Auspex) and Xxxxxxx Capital Advisors
(HCA), a division of Magna Securities Corp., an SEC registered broker-dealer, as
follows:
1. Auspex hereby engages HCA to provide capital raising services in
connection with a private placement of equity securities (the "'private
placement"). HCA shall use its best efforts to raise capital from investors
pursuant to the terms and conditions of the private placement and in accordance
with all applicable laws governing private placement transactions. If requested
by Auspex, HCA will advise Auspex generally with respect to any financial
transactions or related matters that may arise in connection with the private
placement,
2. As compensation for the capital raising services rendered by HCA
pursuant to this Agreement, Auspex shall pay to HCA the following fees:
(a) a 5% cash payment fee payable on the aggregate dollar amount
of funds raised pursuant to the private placement;
(b) warrants to purchase an amount of common stock equal to 5% of
the total number of shares of common stock issued pursuant to the private
placement.
Under the compensation arrangement, Auspex shall pay to HCA a cash payment
equal to 5% of $90,143,088 or the precise amount of $4,507,154.40. HCA shall
further be entitled to warrants equal to 5% of 11,320,953 shares issued or
566,048 shares at an exercise price of $7.9625.
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The, cash payment due HCA pursuant to this Agreement may be satisfied in three
equal payments, The first cash payment shall be due immediately upon execution
of this Agreement. The second cash payment shall be due within 15 days of
execution of this Agreement. The third cash payment shall be due on January 1,
2001, Payments shall be made to the order of Magna Securities Corp.
The warrants shall be issued to the following individuals in the precise number
of shares specified as follows:
Xxxxxx Xxxxxxx and Xxxxxxxx Xxxxxxx 531,048 shares
Xxxx Xxxxxxx 35,000 shares
3. In addition to the compensation payable hereunder, Auspex shall
reimburse HCA, upon request by HCA from time to time, for all reasonable
out-of-pocket expenses (including, without limitation, professional fees and
disbursements, travel expenses, postage, copying and phone charges) incurred by
HCA in connection with the services rendered by FICA pursuant to this Agreement.
4. Auspex shall:
(a) indemnify and hold HCA harmless against any and all losses,
claims, damages or liabilities to which HCA may become subject arising out of or
in connection with any of the services rendered by HCA pursuant to this
Agreement, unless such losses, claims, damages or liabilities art finally
judicially determined to have resulted directly from the gross negligence or
willful misconduct of HCA; and
(b) reimburse HCA immediately for any legal or other expenses
reasonably incurred by HCA in connection with investigating, preparing to defend
or defending, or providing evidence in or preparing to serve or serving as a
witness with respect to, any lawsuits, investigations, claims or other
proceedings arising in any manner out of or in connection with the rendering of
services by HCA pursuant to this Agreement (including, without limitation, in
connection with the enforcement of this Agreement and the indemnification
obligations set forth herein).
Auspex agrees that the indemnification and reimbursement commitments set
forth in this paragraph 4 shall apply whether or not HCA is a formal party to
any lawsuits, claims or other proceedings and that such commitments shall extend
upon the terms set forth in this paragraph to any controlling person, affiliate,
director, officer, employee or agent of HCA (each, with HCA, an "Indemnified
Person"). Auspex further agrees that, without HCA's prior written consent, which
consent shall not be unreasonably withheld, it will not enter into any
settlement of a lawsuit, claim or other proceeding arising out of or in
connection with the private placement unless such settlement includes an express
and unconditional release from the party bringing the lawsuit, claim or other
proceeding of all Indemnified Persons.
Auspex further agrees that the Indemnified Persons are entitled to
retain separate counsel of their selection in connection with any of the matters
in respect of which indemnification, reimbursement or contribution may be sought
under this Agreement, provided that, in connection
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with any one action or proceeding, HCA shall not be responsible for the fees and
expenses of more than one separate law firm or individual attorney in any one
jurisdiction for all Indemnified Persons.
5. If Auspex shall at any time, or from time to time, file with the
Securities and Exchange Commission a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to any of the
common shares or other securities, if any, issued pursuant to the private
placement, HCA shall be advised in writing thirty (30) days in advance of any
such filing. FICA shall then have the right to include a part or all of its
securities received pursuant to this Agreement in any such registration
statement, unless the underwriter and President and Chief Executive Officer of
Auspex certify in writing to HCA that the inclusion of HCA's securities would
significantly adversely affect the marketing of the offer covered by that
registration statement. Auspex will not be responsible for FICA's legal fees,
underwriting commissions or other expenses related to the filing of a
registration statement under the Securities Act,
6. This Agreement constitutes the entire agreement between the parties
and may not be amended or modified except in writing signed by each of the
parties.
7. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York. Auspex and HCA hereby consent
to submit to the exclusive jurisdiction of the courts of the State of New York
and to the United States District Courts located in the City of New York for any
lawsuits, actions or other proceedings arising out of or in connection with this
Agreement.
8. Auspex further agrees that service of any process by mail to Auspex's
address set forth above shall be effective service of process for any proceeding
relating to this Agreement in the courts of the State of New York or the United
States District Court located in the City of New York. Auspex shall promptly
provide HCA with written notice of any change in address from the address set
forth above.
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If the foregoing terms and conditions correctly set forth Auspex's
understanding of our agreement, please indicate such acceptance by signing and
returning to me the enclosed copy of this letter.
Sincerely,
XXXXXXX CAPITAL ADVISORS
/s/ Xxxxxx Xxxxxxx
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By: Xxxxxx Xxxxxxx
CC: Xxxxx Xxxxxxxx (Auspex)
Pew Xxxxxxx (Auspex)
Agreed:
AUSPEX SYSTEMS, INC,
/s/ Xxxx X. Xxxxx
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By: Xxxx X. Xxxxx
Auspex Systems, Inc.
