EXHIBIT 10.10
UNICORN CAPITAL INVESTMENTS LIMITED
A First Fidelity Subsidiary Company
0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000
(000) 000-0000, fax; (000) 000-0000
07-08-02
Xx. Xxxxx:
SUBJECT; CONDITIONAL PROPOSAL FOR AN EQUITY INVESTMENT OF FOUR MILLION DOLLARS
INTO RDC INTERNATIONAL
Dear Xx. Xxxxx :
Enclosed is our conditional proposal and attached agreement for your review and
approval. We have prepared a preliminary offer to purchase up to 15% of the
above company's stock (hereafter known as the client and/or Client Company).
Structure of the Transaction: Fifteen percent (15%) stock equity position upon
the issue of $4,000,000 in asset capitalization. Additional debt capital
infusion will be made for the purpose of expansion and operating capital and
shall occur upon the completion of the full due diligence.
Client Company Equity Position
The owners (client Company) shall receive a 85% equity position in the company
and obtain a cash-out opportunity at the end of the three year contractual term.
Investor(s) equity Position
The investor/Consultant shall receive 15% equity stock in return for providing
for a total capitalization of $4,000,000 in cash credits and or cash
equivalents. The investor shall obtain one seat on the board of advisors and
perform as a paid financial and management consultant to the Board Of Advisors.
THE INVESTOR(S) AND AFFILIATE COMPANIES.
The Investor is a principal and investor in the following affiliate companies.
Unicorn Capital is a $100,000,000 dollar company and is a DBA as Fargo Financial
in some states, . Unicorn Capital is owned 100% by First Fedality Financial a
multi-billion dollar investment firm based in London. Hereafter Unicorn Capital
Inc., Shall be known as the investor. Fargo Financial LLC, Services" consist of
financial advisors, merchant bankers and Venture Capital professionals,
hereafter shall be known as the "Financial Consultant". For the past fifteen
years the company has specialized in creative financing and raising debt or
equity capital for small and medium size businesses and the turn-around of
chapter eleven troubled companies.
FUTURE GROWTH AND DEVELOPMENT OF THE COMPANY
The client shall have in place a certain business affiliate opportunities ,i.e.,
marketing group affiliates, and other value contributing affiliates which will
enhance the prospects for the future growth of the company. Within the next
sixty (60) days, the investor shall provide up to $4,000,000 in assets which
will enhance the financial position of the company. The enhanced balance sheet
is required in order to meet the S.E. C. listing requirements of the company's
stock at $5.00 per share.
Once the "holding company" is fully merged and operational, the investor shall
introduce and bring in addition equity investors to raise from $5,000,000 up to
$10,000,000 from a DPO or secondary Market Maker offering and/or internet
offering through its private data base of Angel Investors.
Conditional Proposal Cont.
Fargo Financial Services (Consultants) Responsibilities
o Devote at least up to 15 hours per week to the development of the project.
o Establish a financial expansion plan for the company to meet its next level
of corporate growth.
o Provide counsel to the Board of Directors on matters of corporate
reorganization and financial expansion.
o Perform as an Advisory Board Member
o Add value to the company through an equity for stock investment.
o Key responsibility for seeing that the company obtain the necessary equity
and funds to expand its businesses.
o Structure the financial operation of the company to meet current and future
financial requirements.
Compensation of key Executive(s)
The Investor (Fargo Financial) shall receive a consulting fee of $175,000.00 per
year of which $100,000.00 will be deferred for the first 12 months. The
remainder will be paid out on a monthly term. Should there be a requirement for
the investor to relocate on a interim bases, it is expected that housing and
living expenses will be paid by the company.
The existing management and staff is expected to continue employment with the
company for at lease the next three years. The existing management may be
supplemented by an experienced CFO/CPA.
Client/Management responsibility
o A strong management team is key to approving projects for debt or equity
financing.
o The management/owner will be responsible for the continuing day to day
activities and operation of the company.
o Management will be responsible for providing administrative and management
support to the investor in the structuring and funding of the company.
o The management /owner will be held to a performance based reporting of
task, problems and activities of the company on a regular monthly basis.
o Management/owners are expected to continue to promote the company, bring in
additional contracts, staff the company with qualified employees, identify
future potential merger/acquisition candidate companies, maintain a high
level of integrity and fiscal responsibility to the company.
o All employee contracts shall be on a performance/contribution basis
o The management/Principals shall assist in the future debt/equity financing
of the company.
Escrow of stock
The stock of both parties should be escrowed and tied to performance conditions
i.e., The investor shall be responsible for the development and financial growth
of the company as listed above. The client shall be responsible for managing the
operation of the company and other task as described above.
Board Advisors
The client shall establish a Board Of Advisors and investor (s) shall have look
two seats on the Board of Advisors and receive quarterly financial reports alone
with a year-end audited financial statement.
Company Financials
The new owners and management will have joint responsibility for all financial
reporting, and some administrative processes.
Conditional Proposal Cont.
Required Documentation
A full blown business plan should contain the majority of the information
listed below:
1. Financial statement of corporation and each principal
2. History of company and management background
3. Two years of federal and tax returns for corporation and principals
4. Resume of principals
5. Present financing, if any (copy of mortgage, contract, commitment)
6. If corporation, certificate of good standing from the Secretary of
State's office
7. If corporation, copy of the most recent annual statement filed with
the Secretary of State's office
8. Letter for the president stating that there are no liens, law suits,
or any other encumbrance against the corporation.
9. A signed Corporate resolution approving the equity investment
Closing Documents
|X| Consulting and Management Contract
|X| Guarantee Agreement
|X| Pay Order
|X| Corporation Resolution
|X| Evidence of Escrow Account
|X| Non-Circumvent and Non-Disclosure
|X| Client Acceptance Letter
|X| Memorandum of Agreement
|X| Corporate Note
Fees And Expenses
A breakdown of fees and expenses are listed the attached addendum entitled
proposal financial terms and conditions. FFS shall be responsible for the
splitting or payment of any advanced fees and expenses on behalf of the client
company. All advanced fees shall go toward the payment of the client company's
investment accounts and pre-payment of interest on the asset allocation
accounts. (see attached proposal of terms. All expenses and fees are due and
payable in advance. FFS shall have the option to request that a 30 day suspense
account be establish in which we will open the account and place it in a
suspense file and at the end of thirty days the account will either terminate or
covert to a fully sustained account.
General Conditions Of This Offer:
o The finalization and signing of this agreement o The signing of the Master
Executive Investment Services Agreement o Due Diligence documentation (see
attachment)
o A signed Board agreement by both parties to enter into this agreement
o There are no liens, lawsuits or other legal judgments against the
company and/or it's owners.
o All federal, state and local taxes are current o The execution of an
employment contract with Xx. Xxxxxx Xxxxx and a consulting contract
with the investor (FFS).
o The signing and acceptance of the attached proposal which is part of
this document.
o No new contracts entered into by the company within the past 30 days
of this agreement date shall be binding upon this agreement.
o All financial and business activities of the company shall be factual
respresentations.
Key Conditions of the Owners.
The management and key supporting staff shall remain with the company for three
years at which time the owner(s) may elect to cash out and leave the company,
sign an agreement for a second three year renewal and or a combination of the
two above options. Management shall participate in the development of a three
year business plan of action for the growth and development of the company
Conditional Proposal Cont.
Key Conditions of the Investor/Consultant
Investor/Consultant shall provide for the short and long term financial support
of the company's business plan.
Should any of the above conditions and or false statements on behalf of either
parties which may affect the completion of either the business or financial
commitments on behalf of either parties shall render this agreement null and
void, thus cancel out all previous business or financial transactions.
Important Note; This offer shall automatically expire fifteen (15)working
days from the Above Date. Direct All inquiries regarding
this proposal to your Account Representative.
On Behalf of; SIGNATURES
Investor Representative Client Company Representative
Fargo Financial Services RDC International, Inc.
/s/ Xxxxx Kuruso /s/Xxxx Xxxxxxx
--------------------------- ---------------------------
Chief Executive Officer
The above signatures on this document is considered legally binding and
committed to the terms and conditions of this agreement.
Attachment: Proposal of Terms and Conditions
UNICORN CAPITAL INVESTMENTS LIMITED
A First Fidelity Subsidiary Company
0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000
(000) 000-0000, fax; (000) 000-0000
07-08-02
Xx. Xxxxx:
SUBJECT; TERMS OF A CONDITIONAL FINANCIAL PROPOSAL TO PROVIDE $4,000,000 IN
EQUITY CAPITALIZATION TO THE RDC INTERNATIONAL.
Dear Xx. Xxxxx:
Enclosed is a financial proposal of terms and conditions to provide a equity
investment in the amount of $4,000,000 in asset capitalization for the above
named project. The terms of the offer are contained below for review and
acceptance. Upon your acceptance these terms and conditions become a part of the
Master Financial Investment and Consulting Agreement which establishes the basis
for the opening of your investment account.
1) COLLATERAL AMOUNT: $4,000,000 cash or cash equivalents
Thirty-Six Months (36) and one day.
3) COST TO SET UP THE ACCOUNTS: $32,000.00 per year. First year payable upon
the acceptance of this agreement. Initial Fees
will be used to pre-pay of interest, open a
fiduciary account, open escrow and transfer the
assets.
4) ANNUAL COSTS TO MAINTAIN ACCOUNT: One (001.%) annual maintenance plus
5) COMMISSIONS: A one time flat fee of $175,000 plus any amounts
advanced shall be due upon funding depending upon
substances and funding level.
5) EQUITY: Fifteen percent (15%) equity upon allocation.
Of the asset/funds
NOTES
a) The client is expected to participate in the full and/or partial payment of
the above fees. The client shall have the obtain a loan from the consulting
company (FFS) to pay partial and/or all of the above fees in return for a
corporate term note.
b) The basic fees of setting up the account and pre-payment of interest shall be
paid prior to the open of the account and transfer of assets.
c) All advanced fees paid by the client less $500.00 for administrative expenses
shall be returned should the above transaction not transpire within the next 30
days.
THIS OFFER WILL EXPIRE WITHIN FIFTEEN (15) WORKING DAYS FROM THE ABOVE DATE.
Sincerely,
On behalf of;
Investor representative
(Fargo Financial Services LLC) Client Representative
/s/ Xxxxx Kuruso /s/Xxxx Xxxxxxx
--------------------------- ---------------------------
Chief Executive Officer
Note; This proposal is an addendum to the equity investment proposal. All
responses and questions shall be directed through the Investor
Representative.
