EXHIBIT 10.8
[LETTERHEAD OF XXXXXXXXX PARTNERS, LLC]
August 7, 2000
DELIVERED VIA FACSIMILE
Xx. Xxxx Xxxxx, CEO
Xcel Management, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Re: Engagement Letter and Fee Agreement-Xcel Management, Inc.
Dear Xx. Xxxxx:
This Engagement Letter and Fee Agreement ("Agreement") will confirm that
Xcel Management, Inc. an existing Utah Corporation (collectively "XCEL
MANAGEMENT, INC." or "you"), has engaged Xxxxxxxxx Partners, LLC ("Xxxxxxxxx" or
"we") and that Xxxxxxxxx has agreed to perform financial advisory and
intermediaries services on behalf of XCEL MANAGEMENT, INC. with respect to
arranging a private placement offering and/or financing for XCEL MANAGEMENT,
INC. as further detailed herein.
1. Scope of Services. On a non-exclusive basis, Xxxxxxxxx will act as
-----------------
financial intermediary in structuring the private placement of common
and/or preferred equity in connection therewith; raising approximately
$1 to $2 million United States Dollars as may be required by XCEL
MANAGEMENT, INC., through the sale of new equity for XCEL MANAGEMENT,
INC. (the "subject financing"). The essence of Xxxxxxxxx'x services
will be to act as an intermediary in providing financial advisory
services to XCEL MANAGEMENT, INC. regarding the subject financing, and
in making introductions and referrals to Xxxxxxxxx Financing Sources
identified by Xxxxxxxxx in writing and approved by XCEL MANAGEMENT,
INC. in writing. For purposes of this Agreement, "Xxxxxxxxx Financing
Source" shall include any entity or party that is identified by
Xxxxxxxxx to XCEL MANAGEMENT, INC. in writing and approved by XCEL
MANAGEMENT, INC. in writing as a potential investor and that makes an
investment in XCEL MANAGEMENT, INC. as a result of Xxxxxxxxx'x
efforts. Xxxxxxxxx Financing Sources shall not include any party that
XCEL MANAGEMENT, INC. identifies in writing to Xxxxxxxxx prior to or
following execution of this Agreement as a party that it has had or
intends to have contact with regarding making an investment in XCEL
MANAGEMENT, INC. and any other party that is not identified by
Xxxxxxxxx to XCEL MANAGEMENT, INC. in writing and approved by XCEL
MANAGEMENT, INC. in writing as a potential investor.
Neither Xxxxxxxxx, nor are any of its principals, licensed as
registered investment advisors, securities brokers-dealers, attorneys
or accountants, and none of the
services provided by Xxxxxxxxx or its principals are intended to be
construed as offering or selling XCEL MANAGEMENT, INC. securities, or
giving investment, legal and/or tax advice.
Other than as expressly provided for herein, Xxxxxxxxx makes no
guarantee or warranty to deliver or produce any results from its
efforts, or that its services will in fact result in a third party or
parties actually providing funding or making an investment in XCEL
MANAGEMENT, INC.. Also, XCEL MANAGEMENT, INC. is under no obligation
to enter into an agreement with any entity, with any investment banker
or securities broker-dealer, or accept or receive funding from any
Xxxxxxxxx Financing Source, or agree to any terms or conditions for
proposed financing other than as XCEL MANAGEMENT, INC.
2. Xxxxxxxxx Compensation.
----------------------
(a.) Upon the closing of each funding from a Xxxxxxxxx Financing
Source, XCEL MANAGEMENT, INC. shall pay Xxxxxxxxx a cash sum
equal to 7% of the gross amount to be disbursed at each said
Closing. XCEL MANAGEMENT, INC. hereby irrevocably authorizes and
instructs the Xxxxxxxxx Financing Source to pay the cash sum
directly to Xxxxxxxxx, out of the closing proceeds, at the time
of each funding closing.
(b.) All expenses incurred by Xxxxxxxxx in excess of $500, including
the printing of documents etc., shall be approved in advance by
XCEL MANAGEMENT, INC., for which XCEL MANAGEMENT, INC. shall
reimburse Xxxxxxxxx.
3. Due Diligence. We shall be conducting a due diligence background
-------------
investigation of XCEL MANAGEMENT, INC., including asking you to
respond in writing to a Due Diligence Questionnaire. XCEL MANAGEMENT,
INC. xxxxxx agrees to cooperate in responding to this Due Diligence
Questionnaire and to otherwise make full, fair and truthful disclosure
to Xxxxxxxxx regarding the business, legal, financial and tax
condition of XCEL MANAGEMENT, INC.. Further, XCEL MANAGEMENT, INC.
hereby represent and warrants to Xxxxxxxxx that any and all of the
information contained in the XCEL MANAGEMENT, INC. financial
statements and other documents provided by XCEL MANAGEMENT, INC. to
Xxxxxxxxx with respect to the subject financing are materially
accurate, do not contain any misrepresentations of fact, and do not
omit to state any information so as to make such documents misleading.
XCEL MANAGEMENT, INC. also agrees to supplement and periodically
update all such information so as to make the information provided by
XCEL MANAGEMENT, INC. to Xxxxxxxxx materially accurate.
2
4. Indemnification.
---------------
(a.) XCEL MANAGEMENT, INC. shall indemnify and hold harmless Xxxxxxxxx
from and against all claims, damages, losses, and liabilities
(including, without limitation, reasonable attorneys' fees and
expenses) arising out of or based upon any misstatement or
omission or alleged misstatement or omission, in an offering
memorandum or any other materials or information supplied or
approved by XCEL MANAGEMENT, INC. which are disseminated by
Xxxxxxxxx to Xxxxxxxxx Financing Sources, except XCEL MANAGEMENT,
INC. shall not be liable for any claim of damage, loss or
liability which is finally determined to have resulted from
Xxxxxxxxx'x fraud or gross negligence.
(b.) Xxxxxxxxx shall indemnify and hold harmless XCEL MANAGEMENT,
INC. from and against all claims, damages, losses, liabilities
(including, without limitation, reasonable attorneys' fees and
expenses) arising out of or based upon any misstatement or
omission, or alleged misstatement or omission, by Xxxxxxxxx, in
any materials or information prepared by Xxxxxxxxx which were not
supplied or approved by XCEL MANAGEMENT, INC. and were
disseminated to third parties, including Xxxxxxxxx Financing
Sources.
5. Term and Termination. The term of this Agreement is for 60 days,
--------------------
unless terminated earlier by XCEL MANAGEMENT, INC. on thirty (30) days
notice to Xxxxxxxxx. Notwithstanding the foregoing, if a Closing
occurs with a Xxxxxxxxx Financing Source at any time within 365 days
after such termination, the compensation provided for in items (b) and
(c) of paragraph 2 shall be immediately due and payable to Xxxxxxxxx
as provided for therein.
6. Notice. Any notices to be given hereunder by each party to the other
------
may be effected by personal delivery in writing or by mail, registered
or certified, postage prepaid with return receipt requested to the
addresses set forth below. Notices delivered personally shall be
deemed communicated as of actual receipt; mailed notices shall be
deemed communicated as of two (2) days after mailing.
3
As to XCEL MANAGEMENT, INC.: As to Xxxxxxxxx:
Xx. Xxxx Xxxxx Xx. Xxxxxxx X. Xxxxxxxxx, CEO
Xcel Management, Inc. Xxxxxxxxx Partners, LLC
0000 Xxxxxxxx xxxxx 00000 Xxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
7. Applicable Law. This Agreement shall be construed under the laws of
--------------
the State of California. Venue shall be Orange County, California
8. Attorneys' Fees. If any action at law, or in equity, is necessary to
---------------
enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees and costs, in addition
to any other relief to which it may be entitled.
9. Entire Agreement. This Agreement supersedes any and all other
----------------
agreements, either oral or in writing, between the parties hereto with
respect to the engagement of Xxxxxxxxx and contains all of the
covenants and agreements between the parties with respect to such
engagement in any manner whatsoever. This Agreement may not be altered
or modified except by an agreement in writing, signed by both parties.
If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
If the terms and conditions of this Agreement are acceptable to you, then
please execute this Agreement where indicated below and return an
originally executed Agreement to me.
Very truly yours,
Xxxxxxxxx Partners, LLC
/s/ XXXXXXX XXXXXXXXX
------------------------------
By: Xxxxxxx X Xxxxxxxxx
CEO/Chairman
ACCEPTANCE: The undersigned, as the CEO acting on behalf of Xcel
Management, Inc., hereby acknowledges that he has read and understands the
terms and conditions of the foregoing Agreement with Xxxxxxxxx Partners,
LLC, and that Xcel Management, Inc., hereby agree to be bound by and
perform in accordance with such terms and conditions.
Xcel Management, Inc.
By: Dated:
------------------------------ -------------------------
Xx. Xxxx Xxxxx, CEO
4
