EXHIBIT 10.3
INVESTMENT CAPITAL FEE AGREEMENT
AGREEMENT made this 2nd day of August 2004 by and between Gridline
Communications Corp., a Delaware Corporation (herein "Gridline"), and D. E. Wine
Investments Inc., a Texas Corporation (herein "Wine").
WHEREAS, Gridline is engaged in the business of developing, engineering, and
providing high-speed internet services over power lines: and,
WHEREAS, Wine is in the business of providing management investment banking
services and identifying and securing strategic alliances; and,
WHEREAS, Gridline requires introductions to potential equity and business
partners to provide working capital and to replace existing lines of credit:
and,
WHEREAS, the Parties desire to enter into this Agreement for the purpose of
utilizing the services of Wine on a non-exclusive basis to identify sources of
equity financing and assist Gridline in securing financing from such sources for
itself and its clients.
NOW, THEREFORE, the Parties do hereby agree as follows:
1. SERVICES WINE hereby agrees to use its reasonable efforts to identify
potential equity or debt investors (each, "Investor", together,
Investors"), to introduce the same to Gridline and otherwise assist
Gridline in securing funding from the Investors ("Services"). Gridline
agrees to utilize the Services and to pay for the services as more
particularly set-forth herein. Gridline will utilize the Services on a
non-exclusive basis and shall be free to utilize the same or similar
services of one or more other providers at any time. Wine shall list such
Investors on Schedule A, and may add to Schedule A from time to time.
Gridline shall automatically accept such listing unless it has an
existing active discussion regarding an investment in Gridline with the
proposed Investor, or another Finder has already listed such Investor. In
such event, Gridline shall notify Wine of such conflict within 24 hours
of listing by Wine.
2. TERM This Agreement shall have a term commencing on the date hereof and
ending on August 2, 2005 unless earlier terminated by either Party. Such
earlier termination shall be by written notice and shall be effective on
the date specified in the notice. After termination, no party will have
any further obligation hereunder, except that Wine will retain all rights
under this agreement regarding payment of any fees earned through the
date of the termination.
3. FEES
(a) a cash fee (the "Financing Fee") consisting of:
(i) a cash placement fee (the "Cash Placement Fee") for EQUITY
financing of :
10% of the first million dollars,
8% of the second million,
6% of the third million,
4% of the forth million,
3% of everything thereafter,
(ii) a cash placement fee for DEBT financing equal to 5% of the
financing amount.
1
(b) a stock placement fee (the "Stock Placement Fee") payable at the
closing of the financing equal to 50,000 shares for each million
dollars of financing. All shares issued per this section will be
restricted common stock of the company.
The cash placement fee and the stock placement fee will be payable on a
prorate basis for any financing amount which falls between the million
dollar breakpoints.
The cash and, stock fee for the Services shall apply during the term
hereof, or any extensions thereto, from any Investor first introduced to
Gridline by Wine.
In the event a potential Investor is first identified to Gridline prior
to the termination of this Agreement, but no funding by such Investor is
made prior to the termination date, then the foregoing fees shall
nevertheless be paid to the extent the investment by such Investor is
funded and received by Gridline on or before Two (2) years from the
effective date of termination. In the event such persons who were not
initially identified and personally introduced to the Company by Wine in
the Company, no compensation will be owed to Wine. Wine shall not be
entitled to any fee if the investment is consummated or if negotiations
thereto are completed, more than Two (2) years after the date of a
notification of termination or if someone other than Wine had already
submitted the name of the potential Investor to Gridline.
4. INVESTOR QUALIFICATION No investment originated by Wine will be accepted
by Gridline until the following criteria are met: (1) the investor is
determined to be "accredited" (2) the investor is approved by the
Company, in its sole discretion.
5. PAYMENT OF FEES Gridline shall pay the foregoing fees to Wine out of a
transaction escrow account no later than Forty Eight (48) hours from
completion of the investment, or, if cleared funds are not available
after 48 hours, then no later than when funds are made available by
banking institution.
6. INVESTMENT TERMS The amount of funds to be invested, the form of the
investment and each of the terms of such investment shall be determined
in the sole and exclusive discretion of Gridline. Gridline shall be under
no obligation to contact or deal with any Investor identified by Wine nor
shall it be obligated to commit to funding in any amount. Gridline shall
not be under any obligation to close any funding in connection with which
it has had discussions or received commitments.
7. PROHIBITION OF REPRESENTATIONS Wine will not make any representation
concerning Gridline or its business or provide any information about
Gridline or its business except to the extent in writing and made or
provided by Gridline; provided, however, that Wine may identify Gridline
to potential Investors and describe the general nature of the business of
Gridline and the amount and type of investment sought.
8. INDEPENDENT CONTRACTOR The Parties agree that the Services are being
provided by Wine strictly as an independent contractor. It is not the
purpose or intention of this Agreement to create, nor shall this
Agreement be construed as creating, any type of partnership, employment
or agency relationship between the Parties. Wine is not authorized to
take any action on behalf of Gridline or to bind Gridline in any manner
except as expressly provided herein
2
9. WINE'S ROLE Gridline acknowledges that Wine is a registered broker-dealer
but Wine shall not be required hereunder to, engage in the offer or sale
of securities on behalf of Gridline. Wine agrees that, in connection with
its activities on behalf of Gridline, it will not engage in a general
solicitation of potential investors, as defined in the Securities Act of
1933 and the regulations promulgated pursuant thereto, and it will
conduct all activities on behalf of Gridline in compliance with
applicable state and federal securities laws.
10. INDEMNITY Each of the Parties will indemnify and defend the other Party
against and hold the other Party harmless from any and all claims, loss,
liabilities, damage, demand, or suit (and legal and related costs and
expenses that arise, directly or indirectly, from acts or omissions by,
or from the breach of any term or condition of this Agreement attributed
to the associated Party.
11. MISCELLANEOUS This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Texas and controlling federal
law. No amendments, changes or modifications to this Agreement shall be
valid except if the same are in writing and signed by a duly authorized
representative of each of the parties hereto.
The rights and obligations arising under this Agreement are personal in
nature and shall not be assigned or transferred by Wine without the
express written consent of Gridline. This Agreement shall be binding on
and shall inure to the benefit of the Parties and their respective
successors and permitted assigns.
12. DISPUTE RESOLUTION THROUGH ARBITRATION
Arbitration: All disputes, controversies or claims by or between AISMI
and Wine arising out of or relating to this Agreement shall be settled by
binding arbitration in accordance with generally accepted Industry
Arbitration Rules of the American Arbitration Association. The parties
agree that binding arbitration shall be the sole remedy as to all
disputes arising out of this Agreement. All arbitration hearings shall be
held at a place designated by the arbitrators as shall be agreed to by
the parties.
Choice of Law: In determining any matter(s) the arbitrators shall apply
the terms of this Agreement, without adding to, modifying or changing the
terms in any respect, and shall apply Tribal law, or in its absence, then
federal law, or in its absence, then state law where the Project (or
Agreement) is to be performed.
Action to Compel Arbitration: Both parties agree that either Party shall
have the right to compel and/or enforce, including, if appropriate, by
injunctive relief or specific performance, any arbitration decisions
and/or arbitration awards in a court of competent jurisdiction.
Arbitration shall be held in the City and State where the Project (or
Agreement) is to be performed.
3
IN WITNESS WHEREOF, the duly authorized representatives of the parties have
caused this Agreement to be executed on the date first written above.
--------------------------------------- ----------------------------------------
GRIDLINE COMMUNICATIONS CORP D. E. WINE INVESTMENTS, INC
BY: /s/ Xxxxxx Xxxxxx BY: /s/ W. Xxxxxx Xxxxxx
--------------------------------- ---------------------------------
NAME: XXXXXX XXXXXX NAME: W. XXXXXX XXXXXX
TITLE: PRESIDENT/CEO TITLE: VICE PRESIDENT
DATE: AUGUST 2, 2004 DATE: AUGUST 2, 2004
--------------------------------------- ----------------------------------------
4
SCHEDULE A
LIST OF PROSPECTS FOR GRIDLINE COMMUNICATIONS CORP.
AUGUST 2, 2004_
---------------
(LIST WILL BE UPDATED WEEKLY OR AS NECESSARY)
1. SBI USA.
3.
4.
5.
5
