INVESTMENT BANKING ENGAGEMENT
AGREEMENT
THIS AGREEMENT (this "Agreement") is made as of the 30th day of October,
2000, by and between XXXXXXXXX.XXX, INC., a Nevada corporation with principal
offices at 0000 Xxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxx 00000 ("Client") and
INTERNATIONAL INVESTMENT BANKING, INC. ("IIBI"), a Florida corporation, with
principal offices at 0000 Xxxx Xxxxx Xxxx 000, Xxxxx 000, Xxxxxxxx, Xxxxxxx
00000.
R E C I T A L S:
- - - - - - - -
A. Client is engaged in the sale and distribution of tickets, tours,
events and activities in the Las Vegas, Nevada, area.
B. Client has been experiencing financial and operational difficulties
and is seeking assistance from outside professionals to, among other things,
increase interest in its stock, procure private and public capital financing,
restructure its operations and administration and develop a strategic growth
plan.
C. IIBI is knowledgeable in the investment banking and financial
services industry and is willing and able to perform the services require by
Client.
D. Client desires to engage IIBI for such purposes pursuant to the
terms, conditions and provisions of this Agreement.
T E R M S:
- - - - -
NOW, THEREFORE, for and in consideration of the mutual premises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1.0 Definitions:
1.1 IIBI is not licensed as a stock or securities broker and is not in the
business of selling stocks or securities or advising as to the investment
viability or worth of stocks or securities.
1.2 IIBI is a corporation and shall provide said services as an independent
contractor, and not as an employee or agent of Client or of any company
affiliated with Client. IIBI has no authority to bind Client or any affiliate
of Client to any legal action, contract, agreement, or purchase. IIBI shall be
solely responsible for any Federal, State or local taxes on payments made to
IIBI and shall be responsible for the compensation payments and any taxes of any
individual that it assigns to work on behalf of Client
2.0 Appointment of IIBI:
2.1 Client hereby appoints IIBI, on a sole and exclusive basis, to promote
Client's corporate interest and provides the services outlined in Section 3.0,
under the terms and conditions set forth herein.
2.2 IIBI acknowledges that it shall have no right to or interest in any
tradenames or trademarks of Client, but may refer to applicable tradenames or
trademarks provided that all such references are in conformance with Client's
requirements regarding their use.
2.3 The term of this Agreement will be for a period of two (2) years from
the date first set above, and will automatically renew for succeeding like
periods unless terminated under Section 7 of this Agreement.
2.4 Client represents that it is unencumbered to enter into this exclusive
Agreement, hereby indemnifies IIBI and will hold IIBI harmless from all suits by
Client or against Client under any and all present and future actions to the
extent that the exercise of such actions are authorized by this Agreement and is
required for IIBI's performance hereunder.
2.5 Client shall promptly disclose to IIBI in confidence all pertinent
information concerning Client and its products and services, financial position
and plans, and shall from time to time provide IIBI with such additional
information as Client or IIBI may believe to be of value to IIBI in performing
its obligations under this Agreement. As part of this initial disclosure of
information by Client, Client shall provide IIBI with documentation containing
its financial statements for the last three years, and projected financial
information or budgets, a complete description of its products or services, and
disclosure of any plans or planning documents that Client has developed.
3.0 Services to be Performed:
3.1 IIBI shall perform the following services for Client:
1) Render professional advice and guidance in the development of a strategic
business plan and marketing plans for the purpose of guiding the growth of
Client;
2) Define and use its best efforts to identify merger and acquisition
candidates for Client and assist Client in the merger or acquisition of such
candidates;
3) Serve as counsel to management and the Board of Directors in developing
an appropriate strategy for working with Client's investors, including working
with any investor relations organization firm engaged by Client and overseeing
the production of television, radio and media presentations for Client;
4) Design and help implement an Advisory Board for Client containing at
least one IIBI representative;
5) Design a financing package commensurate with the financial requirements
of Client;
6) Answer questions and advise Client concerning financial or strategic
issues that may come before or affect Client; and
7) Perform such transactional services that may be contained in an addendum
attachment to this Agreement or which may be mutully agreed upon by IIBI and
Client.
3.2 In addition to the general services to be provided by IIBI pursuant to
Section 3.1 above, IIBI shall appoint Xxxxxx X. Xxxxxxxx as "Consultant" to
oversee and to execute the terms and conditions under this Agreement. IIBI
reserves the right to assign other individual consultants from time to time to
serve as senior management of Client, and Consultant shall perform the
functional responsibilities and duties normally carried out by such senior
management of Client, performing or supervising such functions as may be
assigned by the Board of Directors of Client.
3.3 During the term of this Agreement, IIBI and any individual consultants
that it may appoint shall serve Client faithfully and to the best of their
ability, and shall devote the necessary time, attention, skill and efforts to
the reasonable performance of the duties required by, or appropriate for, the
engagement of IIBI.
3.4 IIBI shall not, during the term of engagement hereunder, engage in any
business activity in competition with, or adverse to Client, other than those
required by or incident to the engagement under this Agreement, without the
prior written consent of the Board of Directors of Client. Notwithstanding the
foregoing prohibition against other business activities set forth above, IIBI
shall be permitted to engage in and manage other companies, investments and to
participate in their normal investment banking affairs.
3.5 In addition to the above, it is specifically agreed that IIBI shall
initially serve to facilitate an agreed upon restructuring of Client which
includes the collecting of funds and other monies and the disbursement of common
shares, filing of documents with the SEC and state securities agencies, the
payment of payables, collection of receivables and other transactions.
4.0 [INTENTIONALLY DELETED.]
5.0 Confidentiality:
5.1 IIBI and Client agree that the parties will not at any time, or in any
fashion or manner divulge, disclose or otherwise communicate to any person or
corporation in any manner whatsoever any information of any kind, nature, or
description concerning any matters affecting or relating to the business of the
other. This includes method of operation, or plans, processes, or other data
of any kind or nature that they know or should have known is confidential and
not already information that resides in the public domain.
5.2 Both Client and IIBI expressly agree that confidentiality of these
matters is extremely important and gravely affect the successful conduct of
their businesses, and its goodwill, and that any breach of the terms of this
section is a material breach of this Agreement.
6.0 Compensation:
6.1 In consideration of its services hereunder, IIBI will be paid by Client
as follows:
a) Immediately upon execution of this Agreement Client shall issue (i)
4,000,000 shares of its stock to IIBI and (ii) 2,000,000 shares of its stock to
Consultant.
b) Client shall pay a retainer fee monthly, in arrears, in the amount of
$10,000 per month throughout the term of this Agreement. The first three (3)
payments must be made in cash, the first payment being due sixty (60) days after
the signing of this Agreement, and monthly thereafter. $120,000 in free trading
stock shall be escrowed for a twelve month period for the purpose of meeting
this monthly obligation and held by a mutually agreeable third party who shall
release shares to IIBI monthly, unless Client, at its sole descretion, decides
to make this payment in cash rather than in free trading stock. This stock
shall be non-dilutionary, meaning that if the agreed upon initial per share
value of these shares, decreases, then additional shares shall be added to all
shares issued to adjust to the $10,000 per month value as stated above. The
number of shares or additional shares issued shall be determined using the
average of the bid price of the Company's securities during the last five (5)
trading days of the month preceding the date payment is due. No adjustment
shall be made to the number of shares if the value per share increases during
the term of this Agreement.
c) All "out of pocket"expenses incurred by IIBI shall be reimbursed by
Client upon receipt of an IIBI expense invoice. Major expenses (non
out-of-pocket), including without limitation airfare and accommodations, will be
agreed upon prior to expenditure and be prepaid by Client
6.2 In consideration of the production of a Business Plan, Client shall pay
IIBI Ten Thousand Dollars ($10,000.00) plus reimbursement of ordinary, out of
pocket expenses. Payment of 50% of this amount is due upon execution of this
Agreement and the remaining fifty (50%) of this amount is due upon submission of
the final draft of the Business Plan to Client.
6.3 In consideration of IIBI participating in and managing merger and
acquisition transactions for Client, Client shall pay to IIBI a success fee in
the amount of either (a) Five percent (5%) of the gross value of any merger or
acquisition consumated with any target that was identified or introduced to
Client by IIBI, or (b) Two and one-half percent (2.5%) of the gross value of any
merger or acquisition consummated with any target not identified or introduced
by IIBI. "Gross Value" shall mean everything paid or payable by one party to
the other in a transaction, including but not limited to cash, securities,
promissory notes, any loans as an integral part of the transaction, earnings or
any other economic benefits, rights, property, or interests. All fees, and all
reasonable out-of-pocket expenses, shall be paid to IIBI at closing in like
compensation.
6.4 Any other compensation in an amount an in he manner mutually agreed upon
at any time by the parties.
6.5 All compensation under this section may be made in cash or free trading
stock valued at the average bid price of the last five trading days of the month
prior to the due date of the payment, at the option of Client, except items
Section 6.2 and 6.3 above and except for the first three payments under Section
6.1(b) above.
7.0 Termination:
7.1 Client and/or IIBI have the right to terminate this Agreement at any
time beginning in the thirteenth (13th) month of the Agreement with 60 days
written notice. If Client gives the termination notice, all payment due to the
termination date shall be paid immediately.
7.2 This Agreement may also be terminated by the mutual consent of the
parties, but may not be terminated by Client without cause during the first
twelve (12) months. Regardless of the reason of termination of this Agreement,
IIBI and Client agree to continue to observe the terms and conditions of Section
5 of this Agreement.
8.0 Assignment:
8.1 This Agreement may be assigned by IIBI to any other qualified party, as
long as, all the terms of this Agreement shall be observed by the assignee.
9.0 Entire Agreement:
9.1 This written Agreement contains the sole and entire agreement between
the parties. It supersedes any and all other agreements by and between the
parties. The parties acknowledge and agree that neither has made any
representation with respect to the subject matter of this Agreement or induced
in any way the execution and delivery of this Agreement except as expressly
stated in the terms of this Agreement. The parties further acknowledge that any
previous statements or representations made by either party to the other are now
null and void and of no effect.
10.0 Modification:
10.1 No waiver or modification of this Agreement or any of its terms,
including modifications of the provisions of this section shall be valid unless
in writing and signed by both parties.
11.0 Arbitration:
11.1 The parties agree that disputes arising out of the execution or
interpretation of this Agreement shall be arbitrated under the rules of the
American Arbitration Association. If legal action is taken to enforce this
Agreement, the prevailing party shall be entitled to recover reasonable attorney
fees, interest, if applicable, plus arbitration cost for the expense of
collection or defense of the action at the discretion of the arbitrator(s).
12.0 Miscellaneous Provisions:
12.1 This Agreement may be executed simultaneously in three or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.2 This Agreement is made in and shall be construed in accordance with the
laws of the State of Florida. Venue shall be in Boca, Florida.
12.3 In the event that any parts of this Agreement are found to be void, the
remaining provisions of this Agreement shall nevertheless be binding with the
same effect as though the void parts were deleted.
12.4 This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, legal representatives, personal
representatives, successors and assigns.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IIBI:
----
International Investment Banking, Inc.,
a Florida corporation
/s/ Xxxxxx X. Xxxxxxxx
By: _____________________________
Xxxxxx X. Xxxxxxxx, Chairman
CLIENT:
------
XXXXXXXXX.XXX, INC.,
a Nevada corporation
/s/ Xxxxxxxx Xxxxxxxx
By: _____________________________
Name: Xxxxxxxx Xxxxxxxx
Title: Interim Chairman
ADDENDUM
THIS ADDENDUM (this "Addendum") is part of an Investment Banking Engagement
Agreement (the "Agreement") made as of the 30th day of October, 2000, by and
between XXXXXXXXX.XXX, INC., a Nevada corporation with principal offices at 0000
Xxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxx 00000, ("Client") and INTERNATIONAL
INVESTMENT BANKING INC. ("IIBI") a Florida corporation with principal Offices at
0000 Xxxx X.X. 000, Xxxxx 000, Xxxxxxxx, XX 00000.
I. TRANSACTIONAL SERVICES:
1.1 IIBI shall prepare, or cause to be prepared, a Private Placement
Memorandum and corresponding Subscription Agreement that comply with SEC
standards and that is tailored to the individual needs of Client. Furthermore,
IIBI will assist Client, and serve as Client's agent, in raising capital under
such Private Placement.
1.2 "Private Placement Memorandum" shall mean a document that (i)
states the investment requirements and details of an offering by Client, (ii)
expresses the risks involved in such investment and (iii) defines accredited
investors that are eligible to participate in such funding. The Private
Placement Memorandum shall express Client's mission, products and services,
Client's future prospects and other relevant information as detailed in Client's
business plan. The Private Placement Memorandum shall not be used as a
prospectus for the purpose of soliciting non-accredited investors for the
company.
1.3 The Subscription Agreement shall be used by Client to properly
screen potential investors in the Company
1.4 IIBI will assist in giving presentations to accredited investors
and will promote the security to the extent permitted under the United States
and applicable state securities laws.
1.5 Client shall promptly disclose to IIBI in confidence, all
information necessary and customarily needed to produce this document and such
additional information as IIBI may believe to be of value to IIBI in completing
this assignmentAs part of this information, Client shall provide IIBI with any
prior business plans containing conceptual description of Client's mission
statement, vision and strategies; draft financial projections; draft sources and
uses of funds; information on any other persons or entities that will provide
Client services (legal and accounting); draft organizational chart and pertinent
information on key personnel.
II COMPENSATION AND PAYMENTS:
2.1 IIBI shall NOT be compensated for any shares of stock or units of
securities sold. Costs and expenses related to the actual raise of monies
through either registered or un-registered security offerings shall be under
third party agreements. These agreements may include SEC qualified Attorneys
and CPA's, as well as Securities Brokers and Investor Relation Firms
2.2 Client shall pay a success fee in the form of free trading common
shares of Client for managing any private placement offerings and working with
and coordinating the professionals referred to in Section 2.1 above. This fee
shall be determined according to the following table, and the number of shares
shall be paid in four equal payments spread over the expected time period to
complete the offering.:
EST. OPENING OFFER FIRST $ 1,000,000 RAISED
PRICE OF EACH SHARE OR FRACTION THEREOF RAISED EACH ADDITIONAL $1,000,000
------------------- ------------------------ --------------------------
Less than $ 1.00 200,000 Shares 150,000 Shares
---------------- -------------- --------------
Between $ 1.01 and $ 5.00 125,000 Shares 95,000 Shares
------------------------- -------------- -------------
Greater Than $5.00 30,000 Shares 20,000 Shares
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2.3 In addition, IIBI shall receive a fee for production of a Private
Placement Memorandum and Subscription Agreement in the amount of $25,000.00,
plus reimbursement of ordinary out of pocket expenses. Payment of Fifty (50%)
Percent is due upon the signing of the Agreement and the remaining Fifty (50%)
Percent thereof is due upon submission of the final draft of the Private
Placement Memorandum.
