Exhibit 10.03
January 25, 2000
Xxxxxxx X. Xxxx
President/COO
XxxXxxxxxx.xxx, Inc.
0000 XxXxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Re: Consulting Agreement
Dear Xxxxxxx:
As a result of our discussions, you have asked JagCapital, Inc. ("JagCapital")
to assist XxxXxxxxxx.xxx, Inc. ("OneDentist" or the Company) with arranging a
minimum of two million dollars ($2,000,000) US in equity financing to be used to
carry out its proposed business as set forth in its business plan.
JagCapital is pleased to have the opportunity to provide these services to
OneDentist. JagCapital has considerable experience in financial consulting,
initial public offerings, secondaries, private placements, and reverse shell
mergers. This letter reflects the general terms and conditions whereby
JagCapital will act, on an exclusive basis, as a financial consultant and
investment banker to and for OneDentist.
1. Background
OneDentist has completed the initial development of its WebSite, which is
currently in beta testing. You have indicated that OneDentist has a total of six
shareholders with 850 shares authorized, however none of the shares have been
actually issued, even though there are agreements in hand of respective counsel
that are reviewing documentation prior to such issuance. The aforementioned six
shareholders, as founders, have contributed services to the Company to effect
the development of its internet presence and in exchange for common share
ownership.
2. Services
As Financial Consultants and Investment Bankers, JagCapital will:
During the term of this Agreement, JagCapital will consult with OneDentist's
management and provide recommendations concerning financial and related matters,
including, but limited to such items as: capitalization, corporate structure,
advice on structuring public and private offerings of securities, investor
public relations, and identification of possible acquisition candidates to
facilitate the Company's growth.
The scope of our services for arranging the above mentioned equity financing for
OneDentist will be divided into three phases, as follows:
Phase I - Reverse Merger into a Shell
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JagCapital will effect a merger of OneDentist with a widely held "shell" company
which can be publicly traded. JagCapital will assist in structuring this
transaction and assist in complying with all procedures to obtain an
"over-the-counter" listing for the post merger company.
The shell company will be a "virgin" shell that has never commenced operations,
has no liabilities, virtually no assets and approximately 235 shareholders. The
merger documents could be completed very quickly (within a few days) and the
merger would close simultaneous with the closing of the financing described in
Phase II below.
JagCapital will provide guidance in the preparation of the merger documents,
however all merger costs and legal expenses will be responsibility of OneDentist
and then ultimately the merged company. The listing process for trading will
typically take 30 to 45 days.
Phase II - Limited Private Placement
------------------------------------
JagCapital will additionally structure a limited private placement of the
Company's common stock ("bridge financing") to raise between $300,000 to
$500,000 for working capital purposes. JagCapital will use its best efforts to
arrange the "bridge financing", which will be directed to dentists who qualify
as accredited investors. The Company will provide JagCapital with a listing of
qualified prospective investors that will be inclusive of dentists. The bridge
financing will include up to one million (1,000,000) shares offered at fifty
cents ($.50) per share. After completion of the bridge financing and closing of
the merger described in Phase I, the OneDentist founders and the new investors
will own 85% of the shell company. All shares outstanding after the merger and
financing will be subsequently registered.
The Company will be responsible for the preparation of all offering documents.
JagCapital will assist in the preparation of the offering documents, including a
placement memorandum, subscription agreements, registration rights agreements,
and Form D for regulatory filings. Judging from the amount of information
already available, we believe that offering materials could be completed within
7 days and the entire offering completed within 30 to 45 days.
Phase III - Registered Public Offering
--------------------------------------
JagCapital will next structure the public offering of the Company's stock
("IPO") to raise a minimum of two million dollars ($2,000,000) US for further
business expansion. JagCapital will use its best efforts to arrange the IPO and
plans to involve the dental community and may structure a financing via a
self-underwritten offering on the Internet. The IPO offering will be structured
such that after completion the original OneDentist founders' ownership of the
company will not be below 50.1%. This financing approach is intended to create
an awareness of the Company amongst dentists and create ownership among
XxxXxxxxxx.xxx subscribers.
The Company will be responsible for all costs related to the offering and will
engage counsel to prepare the offering documents for filing with the Securities
and Exchange Commission ("SEC"). The Company will also arrange to have its
financial statements audited by an SEC qualified accounting firm. This IPO
process will take approximately 90 to 120 days to complete.
3. Compensation
JagCapital will be compensated for its services and reimbursed for its expenses
as follows:
1. For services in Phase I and in Phase II of the project, the Company agrees
to compensate JagCapital on a success-oriented basis equal to $25,000 to be
paid in cash at closing from the financing proceeds. JagCapital will also
be reimbursed upon written submission of verification of all reasonable
"out of pocket" expenses incurred in connection with performing its
services to the Company, including, but not limited to, reasonable fees and
expenses of JagCapital's legal counsel, overnight deliveries, printing
costs, travel expenses and long distance phone charges. Such "out of
pocket" expenses shall not exceed $5,000 in total, unless OneDentist
approves a larger amount in writing.
2. OneDentist agrees to engage JagCapital as a financial consultant under a
new consulting agreement at a gross fee of two thousand dollars ($2,000)
per month, for a period of 12 months, from the time that OneDentist first
receives equity funds that are a result and due to JagCapital's efforts.
3. JagCapital will have the exclusive right to structure and arrange the new
funds in Phase III of the project. The Company will agree to pay
underwriters participating in the offering the following:
a. Success fee, not to exceed equal to 10% of funds raised to be paid at
closing from the proceeds.
b. Warrants to purchase an aggregate of 10% of the securities issued will
be granted and are to be inclusive of any "green shoe" rights that may
necessarily be extended to third party underwriters. The warrants will
be exercisable from the date of the initial offering of shares and for
a period of 5 years from that date and at 120% of the price per share
as paid by the investors at the initial offering. These warrants will
have registration rights, a cashless exercise feature, reset rights
and other features commonly associated with similar warrants of this
type.
c. Non-accountable expense allowance equal to 3% of the funds raised.
4. Term
This agreement shall be exclusive for ninety (90) days from the date of signing
and shall continue from month to month until canceled by either party upon
thirty (30) day written notice. The Company will remain responsible for any
compensation earned up to the date of termination due and owing to JagCapital.
At the time of any such termination, JagCapital will furnish to the Company a
list of investment sources that it has approached on behalf of the Company, and
will supply verification of such prior contact. If at any time within 12 months
of the date of termination, should the Company complete a transaction with any
of the investment sources identified by JagCapital, the Company shall pay a
success fee to JagCapital equal to the amounts indicated above.
5. Other
JagCapital agrees that it will maintain and hold in confidence any confidential
materials or information received from OneDentist.
OneDentist agrees to indemnify, defend and hold harmless JagCapital, and in
turn, JagCapital agrees to indemnify, defend and hold harmless OneDentist, to
the extent permitted by law, from and against all losses, claims, damages or
liabilities relating to the arising out of this engagement and each party will
reimburse the other in defending any such claim. OneDentist will not, however,
be responsible for any losses, claims damages or liabilities or expenses in
defending such, which result solely from the bad faith or negligence of
JagCapital, nor shall JagCapital be responsible for any such bad faith or gross
negligence emanating from OneDentist.
This Agreement is made and shall be governed in accordance with the laws of the
State of Texas, and any disagreements shall be settled by arbitration in Bexar
County, Texas.
Please confirm your acceptance of this Agreement by signing below:
Sincerely,
Xxxx Xxxxxxxxx
President
ACCEPTED AND AGREED TO:
This ____ day of February, 2000.
XxxXxxxxxx.xxx, Inc.
By________________________________
Xxxxxxx X. Xxxx
President/COO
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