ENGAGEMENT AGREEMENT
AGREEMENT made this 15th day of December 1999 by and between
Electra Capital Corporation, Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000 Xxx
Xxxx, XX 00000 (the Consultant) and XXXx.xxx, 0000 Xxxxxx Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, XX 00000 (the Company)
WITNESSETH:
WHEREAS, the Consultant provides consultation services
relating to investment banking, corporate finance, business
management and marketing; and
WHEREAS, the Company desires to utilize the services of the
Consultant in connection with its business operations.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto agree
as follows:
1. The Consultant shall provide at the request of the
Company, business management and marketing consultation services.
Such services shall include assistance in (a) advice concerning
the proposed implementation of procedures for the enhancement of
the market value of the Company, (b) advice concerning the
Company's acquisition and merger program include structuring,
formatting and preparing for the process of acquisitions and
mergers by the Company of other synergistic companies or their
assets including the supervision of preparation materials in
conjunction. with the Company's, legal, financial and other
internal and external professionals, (c) assisting the Company in
retaining (as required) the services of SEC attorneys and other
professionals with respect to foregoing and (d) such other
assistance as the parties may mutually agree upon.
2. The Consultant will also assist the Company in securing
financing of $1 - 5 million dollars, on a best efforts basis in a
period of 120 days or less.
3. The Consultant will thereupon initiate introductions to
broker/dealers which are members of the National Association of
Securities Dealers, Inc. for the purpose of their possible
assistance in the enhancement of the market value of the Company's
publicly traded securities.
4. The Consultant may also assist the Company in its
negotiation with the agents introduced by the Consultant to it.
Initial Company __/s/__ Initial Consultant__/s/__
Page 1
Exhibit - 10.9
5. Any parties introduced to the Company by the
Consultant, even if declining participation hereby, shall be
deemed a"Protected Party" and thereafter the Company shall not
directly deal with the Protected Party except by and through the
Consultant.
6. The Company agrees to indemnify and hold harmless the
Consultant and its affiliates against any legal action arising
from written warranties and representations provided by the
Company. Such indemnification shall include payment of judgments,
if any, and costs of legal representation and court costs, if any.
7. The fees set fourth herein below shall be in addition
to any other fees that the Company may be required to pay to
consummate any of the transactions referenced in Paragraph "1"
herein above. This agreement does not constitute a commitment nor
an undertaking on the part of the Consultant to internally ensure
the successful arrangement nor completion of any such transaction.
8. In consideration of the foregoing consulting services
the Company further agrees to the following financial terms and
conditions and the Company agrees to the Consultant's fees and
expenses as follows:
a. a ten (10%) cash brokerage fee:
b. an initial retainer of $ 10,000 and 25,000 shares
of XXXX.XXX) shall be paid to the Consultant upon
signing of this agreement. Additional compensation
as described in "Schedule A" shall be paid upon
reaching the milestone described therein. The
retainer is refundable if the consultant fails to
deliver a "firm commitment" term sheet at a
minimum .50c a share for at least $1 million
dollars.
c. for a period of one (1) year following the
completion of the initial private placement, the
Consultant will have the first right of refusal,
exercisable within ten (10) business days of
notice, to provide any additional financing(s) up
to an additional $4,000,000 the Company may be
seeking under the 506 filing. The Consultant will
be entitled to a retainer of $5,000 per $1 million
sought and an option to purchase 50,000 shares of
common stock under the same terms and conditions
as the attached "Schedule A". The retainer for
additional funds sought is refundable if the
consultant fails to deliver a "firm commitment"
Initial Company __/s/__ Initial Consultant__/s/__
Page 2
Exhibit - 10.9
term sheet acceptable to Client.
9. The Company and its affiliates agree to fully disclose
to the Consultant any and all information that is deemed pertinent
to the business of the Company as requested by the Consultant.
10. The parties have agreed to hold private and confidential
all information and not to circumvent the disclosing party with
regard to any all contracts, customers and related persons or
entities including, but not limited to:
(a) Information may include identifying financing
sources, working party participants, bond providers, banks,
investors, credit enhancement sources, underwriters, brokers,
contractors, developers, joint venture investors. It is
acknowledged hereby that the business of each and the identity of
them is to be construed as confidential information and belongs to
the party providing such information.
(b) Neither party, without the prior written consent of
the other, shall divulge, disseminate, communicate or otherwise
disclose any confidential or proprietary information provided as
a result of the business between the parties except to the
reasonable extent required to accomplish the purposes contemplated
by said business arrangements between the parties.
(c) The parties agree that neither, without prior
written consent of the other party, shall circumvent the
disclosing party with regard to contacts, customers and/or related
persons or entities identified by the identifying party.
(d) Confidential includes, but is not limited to, any
information not obtainable by the general public and which
contains information which would be considered owned by the owner
and proprietary in nature and which would be considered as a trade
secret except so far as it already exists in the public domain.
(e) It is the intention of the parties to use the confidential or
proprietary information and to use the contracts, customers or
related persons or entities to the advantage of the receiving
party and for like benefit to the providing party in accordance
with the terms and conditions of this business transaction.
(f) The parties warrant that the consent of this
paragraph of this Agreement has been communicated to each officer,
director, employee, agent, subsidiary or affiliate and those
persons have consented to this paragraph of this Agreement.
Initial Company __/s/__ Initial Consultant__/s/__
Page 3
Exhibit - 10.9
(g) Each party agrees with the other that its
officers, directors, employees, consultants and attorneys shall
not knowingly contact directly of indirectly any source introduced
by the other party for the purpose of arranging or completing the
transactions as contemplated in this Agreement or other
transaction with said parties without the express written consent
of the other party(ies).
(h) The parties agree that any transaction undertaken
by either of them relating to the subject matter of this Agreement
shall entitle all other parties to full information regarding the
transaction, including the identity of persons, firms,
corporations, copies of all documentation, copies of all closing
agreements and access to bank accounts for verification of the
amounts in closing agreements, and alternatively, each party may
attend the closing of any transaction if, in the estimation of the
party arranging for such closing, this shall be possible, feasible
or not a violation of any confidentiality between that party and
the person with whom such closing occurs; notwithstanding this
provision all of the agreements prior to and connected with such
closing shall be transparent arid available to all parties as a
condition precedent to closing.
11. The Company will pay any and all prior agreed upon
expenses as stated in writing, which may be incurred by the
Consultant in connection with this Agreement, within five (5)
business days following receipt of funding by the Company.
12. Services provided by the Consultant to and on behalf of
the Company in connection with this Agreement will be suspended
forthwith in the event of nonpayment of fees or expenses.
13. This Agreement shall be defined by and constructed in
accordance with the laws of the State of New York.
14. Representations and Warranties of the Company are as
follows:
(a) The execution and delivery of this Agreement, and
the consummation by the Company of the transactions contemplated
hereby, will be duly and validly authorized by the Board of
Directors of the Company which authorization will remain in full
force and effect, and no other corporate proceedings on the part
of the Company will be necessary to authorize this Agreement and
the transactions contemplated hereby; (b) This Agreement
constitutes the legal, valid and binding act of the Company and is
enforceable with respect to the Company in accordance with its
Initial Company __/s/__ Initial Consultant__/s/__
Page 4
Exhibit - 10.9
terms and neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the
transactions contemplated hereby, nor compliance by the Company
with any of the provisions hereof, will conflict with or result in
a breach or violation of, or default under, any of the terms,
conditions or provisions of any note, bond, mortgage, security
agreement, indenture, license agreement, charter or other
instrument, obligation or corporate restriction (including,
without limitation, Articles of Incorporation and By-Laws) to
which the Company is a party or by which the Company is bound, or
violate any judgment, order, injunction, decree, statute, rule or
regulation applicable to the Company or any of its properties or
assets.
18. All prior understandings and agreements of the parties
relating to the subject matter hereof have been merged into this
Agreement. No representations or warranties as to the subject
matter hereof have been made, except as expressly set forth
herein. No modifications, changes alterations of this Agreement
shall be binding upon any party hereto unless the same shall be in
writing signed by all of the parties hereto.
15. The parties agree that any suit action or proceeding
between the parties hereto arising out of or relating in any
manner to this Agreement shall be instituted exclusively in New
York State Supreme Court, County of New York or in the United
States District Court for the Southern District of New York.
16. This Agreement may not be assigned by any of the
parties hereto without the consent of all of the parties hereto
and shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives,
successors and permitted assigns.
17. If any paragraph, term or provision of this Agreement
shall be held or determined to be unenforceable the balance of
this Agreement shall nevertheless continue in full force and
effect unaffected by such holding or determination.
18. The failure of any party to enforce strict performance
of this Agreement or any of their rights hereunder in any one or
more instances shall not be deemed or construed to be a
waiver of any terms, conditions, rights, options or remedies
hereunder, and the same shall continue in full force and effect.
19. This contract may be canceled by either party by
Initial Company __/s/__ Initial Consultant__/s/__
Page 5
Exhibit - 10.9
providing written notice to the other at the address on this
contract by certified mail.
By:
Electra Capital Corporation
Xxxxx Xxxx Xxxxxxx, Managing Director
Dated: 12/16/99
By:
XXXX.XXX, ,
Xxxxxx X. Richfield, CEO
Dated: 12/15/99
Initial Company __/s/__ Initial Consultant__/s/__
Page 6
Exhibit - 10.9
CONSULTING AGREEMENT - SCHEDULE "A"
The Company agrees to sell its securities to the public and
Consultant as a group. The Consultant shall have the right to
purchase its allocation, to be determined prior to an offering, as
set forth below. Upon the happening of the events set forth below,
the Consultant shall have the option to purchase, at the offering
price, a total of ten (10%) percent of the total number of shares
purchased by the investor or investor group introduced to the
Company by the Consultant. These shares will carry the standard
"piggyback" registration provisions to any subsequent
registrations, by the Company.
The Consultant shall exercise the options herein granted, for
a period of three (3) years from the completion of the offering,
by sending written notice to the Company of the number shares to
be purchased and including payment for the shares purchased. The
Consultant may direct the Company to issue its shares in nominee
form
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement on
By:__/s/Xxxxx Xxxx Frugone___________ By:__/s/Xxxxxx X. Richfield___
Electra Capital Corporation XXXX.XXX,
Xxxxx Xxxx Xxxxxxx, Managing Director Xxxxxx X. Richfield, CEO
Dated: 12/16/99 Dated: 12/15/99
Page 7
Exhibit - 10.9
