EXHIBIT 10.1
WESTCAP CORP.
X.X. Xxx 000
Xxxxxxx Xxxxx, Xxx Xxxx 00000
July 15, 0000
Xxx Xxxx Medical Systems, Inc.
Xxxxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Bosh Stack
Re: FINANCIAL ADVISORY AGREEMENT
Dear Xx. Xxxxx:
This letter sets forth the terms and conditions upon which Westcap Corp.
("Westcap") will act as financial advisor to Oak Tree Medical Systems, Inc. (the
"Company").
1. SCOPE OF ENGAGEMENT. Westcap will act as financial advisor and
consultant to the Company and, in such capacity, will advise the Company with
respect to structuring, financing, acquisitions and such other matters within
its areas of expertise as the Company may request.
2. RESPONSIBILITIES AND SERVICES PROVIDED. With respect to the scope of
assignment and at all times subject to Section 7 hereof, Westcap anticipates
that it will be necessary to complete at least the following specific services:
a. Familiarize itself with the business, operations, management,
financial condition, and future prospects of the Company and new
business opportunities;
b. Evaluate potential acquisitions and various capital structures that
incorporate the Company's funding requirements and determine the
costs and benefits associated with each;
c. Determine potential sources of capital, investment terms and related
strategy issues; and
d. Suggest, if possible, a program to meet the Company's needs and
requirements.
3. COMPENSATION TO WESTCAP. (a) As compensation for Westcap's services
hereunder, the Company shall pay to Westcap a monthly fee of $5,000 during the
term of this Letter Agreement. The first monthly fee shall be payable upon the
execution of this Letter Agreement by the Company, and each successive monthly
fee shall be paid on the 15th day of each successive month during the term of
this Letter Agreement.
(b) As additional compensation for Westcap's services hereunder, not
later than ten (10) days following the date of execution of this Letter
Agreement by the Company, the Company will issue 250,000 warrants (the
"Warrants") to Westcap or Westcap's designee exercisable for the purchase of up
to 250,000 shares of the Company's Common Stock ("Common Stock"), upon the
following terms:
i. 100,000 of the Warrants shall be immediately exercisable for
one share of Common Stock at an exercise price per share equal
to $5.00; these Warrants shall be exercisable until January
15, 1998;
ii. 75,000 of the Warrants shall be immediately exercisable for
one share of Common Stock at an exercise price per share equal
to $6.00; these Warrants shall be exercisable until July 15,
1998; and
iii. 75,000 of the Warrants shall be immediately exercisable for
one share of Common Stock at an exercise price per share equal
to $7.00; these Warrants shall be exercisable until July 15,
1998;
Subject to the foregoing, the Warrants shall be in a form acceptable to
Westcap, including provisions for antidilution (which antidilution provisions
shall not be effective until such time as there are issued and outstanding an
aggregate of 3,250,000 shares of Common Stock and which antidilution provisions,
in any event, shall not be activated by issuances of Common Stock in connection
with the exercise of stock options granted prior to the date hereof) and
obligating the Company to file within 30 days following the date of issuance of
the Warrants an appropriate registration statement with the U.S. Securities and
Exchange Commission covering the Warrants and the shares of Common Stock
underlying the Warrants.
4. REIMBURSEMENT OF EXPENSES. The Company agrees to reimburse Westcap
on a monthly basis for all reasonable out-of-pocket expenses which have been
pre-approved.
5. TERMS OF ENGAGEMENT. The engagement of Westcap pursuant to the terms
of this Letter Agreement shall be effective commencing on the date hereof and
shall continue until July 15, 1998; provided, however, that the Company may
terminate this Letter Agreement (i) at any time prior to January 15, 1997 by
giving 90 days' prior written notice of such termination to Westcap and (ii) at
anytime after January 15, 1997 and prior to July 15, 1998 by giving 30 days'
prior written notice of such termination to Westcap.
6. OBLIGATIONS AND FEES. The obligation of the Company to pay any fees
or expenses set forth herein shall not be assigned, delegated or transferred to
any other person or entity without the prior written consent of Westcap. The
provisions below for indemnification of Westcap shall apply to this paragraph.
7. CONFIDENTIALITY. Each of the parties agrees to keep any information
with respect to each other and this agreement confidential and not make use
thereof except as may be required by applicable law or judicial process. Each
party will not be identified or referred to in any public release or
communication prepared by either party or any of their affiliates or associates
without the other party's prior written consent.
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8. COMPANY'S OBLIGATIONS. The Company will continuously and timely
apprise Westcap of material matters relevant to the Company's business and
financial condition and prospect for such.
The Company recognizes, agrees and confirms that Westcap (i) will be using
and relying on information available from the Company and generally recognized
public sources (the "information"), without having independently verified the
same, and; (ii) does not assume responsibility for the accuracy of completeness
of the information. The Company will, in addition to any other duties of
indemnification set forth in this Letter Agreement, indemnify and hold Westcap
harmless for any claim, suit or judgement arising out of Westcap's use of any
information acquired from the Company and used by Westcap in carrying out its
duties pursuant to this Letter Agreement.
9. LIMITATION OF LIABILITY; INDEMNIFICATION. In performing its services
under this Agreement, neither Westcap nor any officer, director, employee,
shareholder, attorney, or agent of Westcap will be liable to the Company or its
creditors for errors or judgement or for any other acts, except for acts of
negligence of Westcap. Westcap will not be accountable for any loss suffered by
the Company by reason of the Company's actions or non-action on the basis of any
advice, recommendation, or approval of Westcap.
Notwithstanding anything contained in this Letter Agreement, in the event
that Westcap incurs any liability or obligations in connection with this Letter
Agreement, the Company shall indemnify Westcap for all of such liabilities,
obligations, expenses, or costs arising therefrom, including reasonable legal
fees incurred by Westcap, except for (i) actions of Westcap which have not been
authorized by the Company and (ii) acts of gross negligence of Westcap.
10. RELATIONSHIP OF THE PARTIES. Nothing in this Letter Agreement shall
be construed to place Westcap and the Company in the relationship of partners of
joint venturers. Neither Westcap nor the Company shall represent itself as the
agent or legal representative of the other for any purpose whatsoever. Westcap,
in performing its service hereunder, shall at all times be an independent
contractor.
11. MISCELLANEOUS. Notwithstanding anything to the contrary contained
herein, the provisions concerning confidentiality, indemnification, contribution
and the Company's obligations to pay fees and reimburse expenses contained
herein shall survive any expiration or termination of this Letter Agreement. The
Letter Agreement may not be amended or modified except in writing and shall be
governed by and construed in accordance with the laws of the State of New York
without reference to principles of conflicts of law thereof.
Westcap is delighted at the prospect of working with you.
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If the foregoing conforms to your understanding, please sign, and date and
return to us the enclosed copy of this letter.
Very truly yours,
WESTCAP CORP.
By: /s/ XXXXXX XXXX
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Xxxxxx Xxxx
President
The foregoing is in conformity with out understanding:
OAK TREE MEDICAL SYSTEMS, INC.
By: /s/ XXXXX XXXX STACK
---------------------
Xxxxx Xxxx Stack
Chairman of the Board
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