EXHIBIT 10.15
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Capstone Partners Investment Banking and Consulting
Agreement dated September 27, 1999, attached hereto.
INVESTMENT BANKING AND Consulting AgreemenT
FOR
American Fire Retardant Corp.
This Agreement ("Agreement") is made as of September 27, 1999, by and
between American Fire Retardant Corp., a Nevada corporation, with its principal
place of business at 0000 Xxxx Xxxxxx, Xx Xxxxx, Xxxxxxxxxx 00000 ("Company"),
and Capstone Partners, Inc., a Utah limited liability company, ("CAPSTONE") with
its principal offices at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
Witnesseth
WHEREAS, Company requires expertise in the areas of corporate finance
consulting, securities compliance and regulation, securities markets awareness
and support, and general investment banking services to support its further
development and growth; and
WHEREAS, CAPSTONE, an NASD-member broker dealer, through its Investment
Banking Department, is in the business of providing corporate finance advice and
services, investment banking services, and other related advisory services
including business development, advice on mergers and acquisitions, and
strategic planning; and
WHEREAS, The Company and CAPSTONE intend that this Agreement shall
supercede and replace all other written investment banking or financial services
agreements previously entered in to by the parties or their respective
affiliates.
NOW, THEREFORE, in consideration of the premises above and the mutual
promises and covenants contained herein and subject specifically to the
conditions hereof, and intending to be legally bound thereby, the parties agree
as follows:
1. Certain Definitions- When used in this Agreement, the following terms shall
have the meanings set forth below:
1.1 Affiliate - any persons or entities controlled by or under common
control of a party to this Agreement.
1.2 Company - the Company who uses the services of CAPSTONE. Unless
specifically stated otherwise, the term "Company" shall also include
any other business enterprises which are affiliated with the Company.
1.3 Contact Person - The persons who shall be primarily responsible for
carrying out the duties of the parties hereunder. The Company and
CAPSTONE shall each appoint a Contact Person to be responsible for
their respective duties. In the event that one party gives notice to
the other party in writing that, in their reasonable opinion, the
other party's Contact Person is not able to fulfill their duties and
responsibilities hereunder, both parties shall mutually agree upon a
replacement Contact Person within 10 days of the said notice.
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1.4 Extraordinary Expenses - are expenses that are beyond those expenses
that are usual, regular, or customary towards the performance of
CAPSTONE's duties in fulfillment of the scope of this Agreement.
1.5 Equity - cash, securities or liquid assets, specifically excluding
real property.
1.6 Payment or Payable in Kind - distribution or delivery of compensation
in the same type and form as was given as valuable consideration for a
transaction.
2. Contact Persons. The Contact Persons for the Company are Xxxxxxx X. Xxxxx,
President and Xxxxxx X. Xxxxx, Vice President and Secretary. The Contact Persons
for CAPSTONE are Xxxxxxx Xxxxxx, Esq., Chief Executive Officer and Xxxxxx X.
Xxxx, President.
3. Services to be Rendered by CAPSTONE. Services to be rendered by CAPSTONE are
as follows:
3.1 Advice and Counsel. CAPSTONE will participate with the Company's other
professionals and advisors to provide advice and counsel in relation
to the Company's strategic business and financial plans, and other
strategies, including but not limited to, identification and
negotiations with potential lenders and investors, mergers and
acquisition candidates, joint ventures, corporate partners and others
involving financial and financially related transactions, as well as
marketing and public relation matters as requested by the Company.
CAPSTONE may provide additional mergers and acquisition candidates and
strategies so as to assist the Company in its corporate expansion and
development.
In addition, CAPSTONE will assist in creating one or more securities
offering structures for the Company, either debt and equity offerings,
will assist in identifying one or more funding sources and strategies
designed to locate investment capital for the Company, and
specifically will use its best efforts to identify and negotiate the
placement of a "bridge capital" facility currently being undertaken by
the Company. This Agreement shall specifically include investment
banking services related to the Company's planned Rule 506 private
placement offering to be structured for the purpose of placing
sufficient debt and/or equity securities to enable the Company to
raise a minimum of $2.0 million and a maximum of $3.0 million of
investment capital, on terms and according to a corporate finance
structure hereinafter to be agreed upon by the parties.
3.2 Introductions to the Securities Brokerage Community. CAPSTONE has
developed an association with a multitude of other NASD-member broker
dealers and investment professionals. In the event the utilization of
such association becomes necessary or desirable, CAPSTONE will enable
and facilitate contact with the Company to facilitate business
transactions among them. In this event, CAPSTONE shall use it's best
efforts to assist the Company in establishing relationships with
securities dealers and to provide the most recent corporate
information to interested securities
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dealers on a regular and continuous basis. CAPSTONE understands that
this is in keeping with the Company's business objective to establish
a nationwide network of securities dealers, market professionals, and
market makers, who have an interest in the Company's securities.
3.3 Market-making Intelligence. CAPSTONE also has close associations with
numerous marketing and public relations professionals and will use its
best efforts to introduce and facilitate contacts and relationships
between the Company to facilitate business transactions and marketing
expertise among them. By sharing marketing ideas and networking among
contacts introduced by CAPSTONE, the Company can increase its public
markets exposure and expertise by establishing these relationships.
3.4 Company Transaction Due Diligence. CAPSTONE will participate with
other companies, professionals and advisors to undertake due diligence
on all proposed financial transactions affecting the Company,
including investigation and advice on the financial, valuation and
stock price implications thereof.
3.5 Additional Duties. Company and CAPSTONE shall mutually agree upon any
additional duties that CAPSTONE may provide for compensation paid or
payable by Company under this Agreement. Such additional agreement(s),
although there is no requirement to do so, may be attached hereto and
made a part hereof as Exhibits beginning with Exhibit A.
3.6 Best Efforts and Non-exclusive.
(a) Except as to specific time deadlines imposed pursuant to the terms
of this Agreement as set forth in Exhibit 1, CAPSTONE shall devote
such time and best efforts as may be reasonably necessary to perform
its services as agreed herein. CAPSTONE is not responsible for the
performance of any services that may be rendered hereunder without the
Company providing the necessary information prior thereto. CAPSTONE
cannot guarantee results on behalf of Company, but shall pursue all
reasonable avenues available through its network of financial
contacts. At such time as interest is expressed in the Company's
business and capital raising objectives, CAPSTONE shall notify Company
and advise it as to the source of such interest or capital and any
terms and conditions of such. The acceptance and consumption of any
transaction is subject to acceptance of the terms and conditions by
the Company. It is understood that a portion of the compensation to be
paid hereunder is being paid by Company to have CAPSTONE remain
available to assist it with transactions on an "as needed" basis
during the term of this Agreement.
(b) The parties further acknowledge that this Agreement is being
entered into by the Company on a non-exclusive basis, meaning that
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there is no prohibition in this Agreement restraining the Company from
receiving like services from any third party to this Agreement.
4. Legality of Transactions and Services. CAPSTONE hereby represents and
warrants the services contemplated herein, the consideration received and the
services to be rendered are and will be in compliance with all federal and state
laws of the United States. Upon request, CAPSTONE shall provide an opinion of an
attorney licensed to practice law within the United States, that the foregoing
is correct.
5. Compensation to CAPSTONE. Initially, CAPSTONE shall receive compensation
under this Agreement for: (i) successfully placing the Company's bridge capital
facility in an amount of at least $250,000 and (ii) for ongoing investment
banking services separate from and in addition to the placement of the bridge
capital facility. Fees for the combination of the services referenced in this
section shall be payable as follows:
5.1 Compensation and Fees.
A. Retainer Fee. CAPSTONE shall be paid a retainer fee
("Retainer") equal to 25% of the total number of shares of
Common Stock of the Company as provided in paragraph 5.1(B),
below, upon the execution of this Agreement (one-quarter of
1%). This Retainer is in lieu of CAPSTONE'S customary cash
retainer fee.
B. Monthly Fee. In addition, for a period of six (6) months
from the date of execution of this Agreement, the Company
agrees to pay CAPSTONE $2,500 per month during the term of
this Agreement commencing on execution of this Agreement,
with each subsequent monthly payment due on the 15th day of
each month thereafter, provided that CAPSTONE meets that
specific time deadlines set forth in Exhibit 1. In the event
that the Company is delinquent in making any monthly
payment, the amount which is delinquent may be paid either
in cash or by transferring an appropriate number of the
Company's restricted Common Stock valued at a 50% discount
to the market inside bid price to CAPSTONE per month, upon
the due date, in lieu of cash, at CAPSTONE's option (i.e. if
a $2,500 fee is not paid, $5,000 of restricted Common Stock
shall be delivered to CAPSTONE).
If CAPSTONE fails to complete a project, through no fault of
the Company, by a specific deadline set forth in Exhibit 1,
then the Company shall not be obligated to pay the next
months fee of $2,500 and said monthly fee shall be deemed
waived by CAPSTONE.
Should the Company become delinquent in keeping the monthly
consulting fees current by more than 15 days, CAPSTONE may
discontinue work on the Company's behalf.
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If CAPSTONE fails to complete a project within 15 days after
its designated deadline as set forth in Exhibit 1, then the
Company, at the election of the Company, may terminate this
Agreement.
C. Shares. As partial consideration for CAPSTONE'S services,
expertise, and introductions to sources of debt or equity
capital, the Company shall cause to be delivered and issued
to CAPSTONE (or CAPSTONE'S assignee(s)), a number of
restricted shares of the Company's Common Stock equal to 1%
of the total number of outstanding shares at the date of
this Agreement, being 23,438 shares ("Shares"). These Shares
shall be earned, issued and delivered according to the
following delivery and issuance schedule:
(i) 25% of the restricted Shares deliverable on the
execution date of this Agreement as the Retainer
pursuant to paragraph 5.1(A). These Shares shall be
subject to the resale limitations contained in Rule 144
promulgated under the Securities Act of 1933, as
amended ("Act").
(ii) 50% of the restricted Shares deliverable at the time
that CAPSTONE delivers a draft of the Private Placement
Documents pursuant to Exhibit 1 attached hereto. These
Shares shall be restricted under Rule 144 of the Act
and shall be subject to the resale limitations
contained in Rule 144 promulgated under the Act.
(iii)25% of the restricted Shares deliverable at the time
that CAPSTONE delivers a draft of the final Private
Placement Documents and Required Notices pursuant to
Exhibit 1 attached hereto. These Shares and shall be
subject to the resale limitations contained in Rule 144
promulgated under the Act.
D. Warrants. Warrants shall be granted to CAPSTONE from the Company
entitling CAPSTONE (or its assignee(s)) to purchase an equal
number of shares of Common Stock as are the subject of section
5.1(B) of this Agreement (i.e. 1.0% of the total number of
outstanding shares of Common Stock as of the date of this
Agreement) ("Warrant"). The Warrants shall not be exercisable
until 180 days from the date of grant thereof. The Warrants shall
be exercisable at a price equal to 75% of the average inside bid
price of the Company's Common Stock for the five trading day
trading period prior to the actual exercise of the Warrant or any
part thereof. The term of the Warrants shall be for three (3)
years from the date of grant, and they will include a "cashless
exercise" (i.e., conversion provision. The Warrants and shares
received by CAPSTONE, if the Warrants are exercised, shall be
subject to the resale restrictions contained in Rule 144
promulgated under the Act, unless they are subject to
registration in accordance with this Agreement.
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E. Provisions Governing the Warrant Shares. The following provisions
are applicable to the Shares which are to be issued to CAPSTONE
in the event that the Warrants are exercised pursuant to this
agreement ("Warrant Shares"):
(i) All Warrant Shares shall be subject to piggyback
registration rights whenever the Company proposes to
register any of its securities under the Securities Act of
1933, (excluding the Company's initial registered public
offering, and any Registration on Form S-8 for employee
benefit plans or Form S-4, or successor forms) with no
proceeds from the registration of said Warrant Shares going
to the Company. CAPSTONE may register all, a portion or none
of its Warrant Shares along with other of the Company's
shareholders, subject to approval of any Underwriter
representing the Company.
(ii) The Company shall provide, at its own expense at the time of
exercise of this Agreement, or within a reasonable time
thereafter, the necessary documents for CAPSTONE (or its
assignee(s)) to receive the following:
(x) Form of Warrant Agreement containing the grant of the
Warrants; and
(y) Piggyback Registration Rights Agreement covering the
Warrant Shares.
F. Bridge Funding and Private Placement Commissions. As compensation
to CAPSTONE for successfully locating and placing a minimum of
$250,000 in bridge financing on behalf of the Company, and in
addition to the other compensation payable to Capstone for its
investment banking services provided for in this Agreement,
CAPSTONE shall receive a cash commission of 3.0% of the gross
aggregate amount of funding received, payable at the time or
times that the Company receives proceeds from any source or
sources for any bridge financing placed through CAPSTONE'S
efforts or introductions.
The placement by CAPSTONE of the Company's debt or equity
securities, in addition to the bridge financing referenced above
(such as the Company's planned Rule 506 offering), shall be based
upon the terms of a separate placement agents or dealers
agreement hereinafter to be entered into by the parties prior to
the time of such offering(s).
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G. Shares for introduction Broker-Dealer Upon Quotation of
Common Stock. In consideration for the consulting services
and introductions provided by CAPSTONE to the Company with
regard to assisting the Company in locating a qualified and
reputable Broker Dealer to submit and file the requisite
Form 211 with the Over the Counter Bulletin Board, the
Company hereby agrees that at such time as the Company
begins price quotations on the NASD's Over the Counter
Electronic Bulletin Board market, or such other public
securities market, the Company shall cause to be issued and
delivered to CAPSTONE, or its assignee(s) 100,000 restricted
shares of the Company's Common Stock.
5.2 Optional Form of Payment. CAPSTONE may at its sole election, on
the due date of any payment due in accordance with this
Agreement, elect to receive all or a portion of its fees in the
form of restricted securities, equity, or financing instruments
issued by Company to CAPSTONE on terms agreed by the Company in
writing.
5.3 Extraordinary Expenses. Extraordinary expenses of CAPSTONE shall
be submitted to the Company for approval prior to expenditure and
shall be paid by the Company, within ten (10) business days of
receipt of CAPSTONE'S request for payment. Extraordinary expenses
shall include, but not be limited to, business travel, business
accommodations expenses, printing, regulatory fees, overnight
delivery or courier services.
5.4 Finder Fees.
5.4(a) In the event CAPSTONE introduces the Company or a Company
affiliate to any third party funding source(s), underwriter(s),
merger partner(s) or joint venturers who enter into a funding,
underwriting, merger, joint venture or similar agreement with the
Company, the Company hereby agrees to pay CAPSTONE an advisory
finder's fee according to industry standards based on the
industry standard known as the "Xxxxxx'x Formula", on the gross
proceeds or dollar value derived from such funding, payable upon
the consummation of such funding, underwriting, merger, joint
venture or similar agreement with the Company, even though the
term of this Agreement may have expired pursuant to the terms of
this Agreement. Capstone shall not be entitled to a finder's fee
for any proceeds or financing arranged directly by the Company or
from Monsoon International Manufacturing and Distribution, Inc.
("Monsoon"), or any parties introduced by Monsoon to the Company.
For the purposes of this Agreement Xxxxxx'x Formula is set forth
below:
(i) 5.0% of the first $1,000,000 of Financing;
(ii) 4.0% of the next $1,000,000 of Financing;
(iii) 3.0% of the next $1,000,000 of Financing;
(iv) 2.0% of the next $1,000,000 of Financing; and
(v) 1.0% of any amount in excess of $4,000,000 of Financing.
"Financing," as used herein, shall mean all amounts furnished to
or for the use of the Company with Investors directed or
introduced by, or through the efforts of, Finder after the date
of this Agreement, whether by investment in equity or debt
securities of the Company, loans, loan commitments, guarantees of
indebtedness, leasing, sale and leaseback, joint ventures or
licensing.
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5.5(b) CAPSTONE may, at its sole option, elect to receive all or
a portion of said advisory fee as payment in kind, i.e., pro-rata
in the same form and type of securities, equity, or financing
instruments issued to the funding source or underwriter by the
Company. In the event the exercise of this option results in
additional expenses over and above the expenses of the funding
and/or underwriting, then the additional expenses shall be borne
by CAPSTONE. In addition, the exercise of this option by CAPSTONE
shall not impede or otherwise have a negative effect on any
funding or underwriting.
6. Indemnification. Each party shall hold the other party harmless from and
against, and shall indemnify the other party, for any liability, loss, and
costs, expenses or damages howsoever caused by reason of any injury (whether to
body, property, personal or business character or reputation) sustained by any
person or to any person or property by reason of any act, neglect, default or
omission of it or any of its agents, employees, or other representatives arising
out of or in relation to this Agreement. Nothing herein is intended to nor shall
it relieve either party from liability for its own acts, omissions or their own
negligence. All remedies provided by law or in equity shall be cumulative and
not in the alternative.
7. Company Representations. Company hereby represents, covenants and warrants to
CAPSTONE as follows:
7.1 Authorization. The Company and its signatories herein have full power
and authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
7.2 No Violation. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate
any provision of the charter or by-laws of Company, or violate any
term or provision of any other agreement or any statute or law which
binds the Company.
7.3 Agreement in Full Force and Effect. All contracts, agreements, plans,
leases, policies and licenses referenced herein to which the Company
is a party are valid and in full force and effect.
7.4 Consents. No consent of any person, other than the signatories hereto,
is necessary to the consummation of the transactions contemplated
hereby, including, without limitation, consents from parties to loans,
contracts, lease or other agreements and consents from governmental
agencies, whether federal, state, or local.
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7.5 CAPSTONE Reliance. That CAPSTONE has and will rely upon the documents,
instruments and written information furnished to CAPSTONE by the
Company's officers, or designated employees.
7.6 Services NOT EXPRESSED OR IMPLIED.
7.6(a) That CAPSTONE has not agreed with the Company, in this
Agreement or any other agreement, either verbal or written, that any
associate of CAPSTONE will be a market-maker in any specific
securities or securities that the Company may have an interest in:
and,
7.6(b) That any payments made to CAPSTONE are not, and shall not be
construed as compensation to CAPSTONE for the purposes of having a
referral or associate of CAPSTONE make a market or write research
reports, or to cover CAPSTONE'S out-of-pocket expenses for having a
referral of CAPSTONE make a market, or for the submission by a
referral of CAPSTONE of an application to make a market in any
securities; and,
7.6(c) That no payments made to CAPSTONE are for the purpose of
affecting the price of any security or influencing any market-making
functions.
7.6(d) That no payment made to CAPSTONE shall be for making false or
exaggerated representations about the Company or any of the Company's
customers or products.
7.6(e) That no payment made to CAPSTONE shall be for research
reporting coverage or securities purchase recommendations. CAPSTONE'S
research department may or may not decide to initiate coverage of the
Company's stock based on its due diligence, independently from any
form of contractual agreement.
8. CAPSTONE Representations. CAPSTONE hereby represents, covenants and warrants
to Company as follows:
8.1 Authorization. CAPSTONE and its signatories herein have full power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
8.2 No Violation. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate
any provision of the charter or by-laws of Company, or violate any
term or provision of any other agreement or any statute or law.
8.3 Agreement in Full Force and Effect. All contracts, agreements, plans,
leases, policies and licenses referenced herein to which Company is a
party are valid and in full force and effect.
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8.4 Consents. No consent of any person, other than the signatories hereto,
is necessary to the consummation of the transactions contemplated
hereby, including, without limitation, consents from parties to loans,
contracts, lease or other agreements and consents from governmental
agencies, whether federal, state, or local.
8.5 Company Reliance. That Company has and will rely upon the documents,
instruments and written information furnished to Company by the
CAPSTONE'S officers, or designated employees.
9. Confidentiality. CAPSTONE and the Company each agree to provide reasonable
security measures to keep information confidential whose release may be
detrimental to the stability and confidentiality of either CAPSTONE or the
Company.
10. Miscellaneous Provisions.
10.1 Amendment and Modification. This Agreement may be amended, modified,
and supplemented only by written agreement of CAPSTONE and Company.
10.2 Waiver of Compliance. Any failure of CAPSTONE or the Company to comply
with any obligation, agreement or condition herein may be expressly
waived in writing, but such waiver of failure to insist upon strict
compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
10.3 Expenses: Transfer Taxes, Etc. Whether or not the transactions
contemplated by this Agreement are consummated, CAPSTONE agrees that
all fees and expenses incurred by CAPSTONE, in connection with this
Agreement shall be borne by CAPSTONE and the Company agrees that all
fees and expenses incurred by the Company in connection with this
Agreement shall be borne by the Company, including, without limitation
as to CAPSTONE or Company, all fees of counsel and accountants.
10.4 Other Business Opportunities. Except as expressly provided in this
Agreement, each party hereto shall have the right independently to
engage in and receive full benefits from other business activities. In
case of business activities which would be competitive with the other
party, notice shall be given prior to this Agreement or, if such
activities are proposed, then within 10 days prior to any competitive
engagement. The doctrines of "corporate opportunity" or "business
opportunity" shall not be applied to any other activity, venture, or
operation of either party.
10.5 Compliance with Regulatory Agencies. Each party hereby represents and
warrants that all actions, direct or indirect, taken by it and it's
respective agents, employees and affiliates in connection with this
Agreement and any financing or underwriting arising from this
Agreement, shall conform to all applicable Federal and state
securities laws.
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10.6 Notices. Any notices to be given hereunder by any party to the other
may be effected by personal delivery in writing or by mail, registered
or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses appearing
in the introductory paragraph of this agreement, but any party may
change his address by written notice in accordance with this
subsection. Notices delivered personally shall be deemed communicated
as of actual receipt; mailed notices shall be deemed communicated as
of three (3) days after mailing.
10.7 Assignment. This Agreement, and all of the provisions hereof, shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this
Agreement nor any right, interests or obligations hereunder shall be
assigned by either of the parties hereto without the prior written
consent of the other party, except by operation of law.
10.8 Delegation. Neither party shall delegate the performance of its duties
under this Agreement without the prior written consent of the other
party.
10.9 Publicity. Neither CAPSTONE nor the Company shall make or issue, or
cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the
other party. This provision shall not apply, however, to any
announcement or written statement required to be made by law or the
regulations of any federal or state governmental agency, except that
the party concerning the timing and consent of such announcement
before such announcement is made.
10.10Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with
the laws of the State of Georgia, without regard to its conflicts of
law doctrine. The Company and CAPSTONE agree that if action is
instituted to enforce or interpret any provision of this Agreement,
then jurisdiction and venue shall be in Xxxxxx County, Georgia.
10.11Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.12Headings. The heading of the sections of this Agreement are inserted
for convenience only and shall not constitute a part hereto or affect
in any way the meaning or interpretation of this Agreement.
10.13Entire Agreement. This Agreement, including any exhibits hereto, and
the other documents and certificates delivered pursuant to the terms
hereto, set forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party
hereto.
10.14Third Parties. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or corporation other
than the parties hereto and their successors or assigns, any rights or
remedies under or by reason of this Agreement.
10.15Attorneys' Fees and Costs. If any legal action or arbitration
proceeding is necessary to enforce, interpret, or collect upon the
terms of this Agreement, the prevailing party in that controversy
shall be entitled to recover from the non-prevailing party, reasonable
attorneys' fees and costs in addition to any other relief to which
that party may be entitled. This provision shall be construed as
applicable to the entire Agreement.
10.16Survivability. If any part of this Agreement is found, or deemed by a
court of competent jurisdiction to be invalid or unenforceable, that
part shall be severable from the remainder of this Agreement.
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10.17Further Assurances. Each of the parties agree that it shall from time
to time take such actions and execute such additional instruments as
may be reasonably necessary or convenient to implement and carry out
the intent and purpose of this Agreement.
10.18Right to Data After Termination. After termination of this Agreement
each party shall be entitled to copies of all information acquired
hereunder as of the date of termination and not previously furnished
to it.
10.19Relationship of the Parties. Nothing contained in this Agreement shall
be deemed to cause either party to be the partner of the other, nor,
except as otherwise herein expressly provided, to cause either party
to be the agent or legal representative of the other, nor create any
fiduciary relationship between them. It is not the intention of the
parties to create, nor shall this Agreement be construed to create,
any commercial or other partnership. Neither party shall have any
authority to act for or to assume any obligation or responsibility on
behalf of the other party, except as otherwise expressly provided
herein.. The rights, duties, obligations and liabilities of the
parties shall be several not joint or collective. Each party shall be
responsible only for its obligations as herein set out and shall be
liable only for its share of the costs and expenses as provided
herein. Each party shall indemnify, defend and hold harmless the other
party, its directors, officers, and employees from and against any and
all losses, claims, damages and liabilities arising out of any act or
any assumption of liability by the indemnify party, or any of its
directors, officers or employees, done or undertaken, or apparently
done or undertaken, on behalf of the other parties. Each party shall
be responsible for the acts of its agents and affiliates.
11. Arbitration; Indemnification. WITH RESPECT TO THE ARBITRATION OF ANY
DISPUTE, THE UNDERSIGNED HEREBY ACKNOWLEDGE THAT:
11.1 Arbitration is final and binding on the parties;
11.2 The parties are waiving their right to seek a remedy in court,
including the right to jury trial;
11.3 Pre-arbitration discovery is generally more limited and different from
court proceeding;
11.4 The arbitrator's award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification of
a ruling by the arbitrators is strictly limited;
11.5 The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry; and
11.6 This arbitration agreement is specifically intended to include any and
all statutory claims which might be asserted by any party.
11.7 All disputes, controversies, or differences between the company,
capstone or any of their officers, directors, legal representatives,
attorneys, accountants, agents or employees, or any customer or other
person or entity, arising out of, in connection with or as a result of this
agreement, shall be resolved through arbitration rather than through
litigation.
11.8 The undersigned hereby agrees to submit the dispute for resolution to
either the American Arbitration Association, in Atlanta, Georgia, or the
national association of securities dealers, inc., in Atlanta, Georgia,
whichever association may assert jurisdiction over the dispute, within five
(5) business days after receiving a written request to do so from any of
the aforesaid parties.
11.9 If any party fails to submit the dispute to arbitration on request,
then the requesting party may commence an arbitration proceeding.
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11.10 That any hearing scheduled after an arbitration is initiated shall
take place in Xxxxxx County, Georgia and the federal arbitration act shall
govern the proceeding and all issues raised by this agreement to arbitrate.
If any party shall institute any court proceeding in an effort to resist
arbitration and be unsuccessful in resisting arbitration or shall
unsuccessfully contest the jurisdiction of any arbitration forum located in
Xxxxxx County, Georgia, over any matter which is the subject of this
agreement, the prevailing party shall be entitled to recover from the
non-prevailing party its legal fees and any out-of-pocket expenses incurred
in connection with the defense of such legal proceeding or its efforts to
enforce its rights to arbitration as provided for herein.
11.12 Each party will sign any required NASD uniform submission
agreement at the time any dispute is submitted for arbitration. Or the
applicable paperwork for the American Arbitration Association, at the
time any dispute is submitted for arbitration whichever one is
applicable.
11.13 The parties shall accept the decision of any award as being,
final and conclusive and agree to abide thereby.
11.14 Any decision may be filed with any court of competent
jurisdiction as a basis for judgment and execution for collection.
12. Term of Agreement and Termination. This Agreement shall be effective upon
execution, shall continue for six (6) months unless terminated sooner, by either
party, pursuant to the terms of this Agreement, upon giving the other party
thirty (30) days written notice, after which time this Agreement is terminated.
CAPSTONE shall be entitled to the finder's fees described in this Agreement for
funding or underwriting commitments entered into by the Company's within one
year after the termination of this Agreement if said funding or underwriting was
the result of CAPSTONE'S efforts or introductions to other funding sources prior
to the termination of this Agreement.
13. Renewal. Provided that this agreement has not been otherwise terminated, and
that all specific deadlines have been met and all services to be provided
hereunder have been completed in a timely fashion and all payments to be made
hereunder have been made, then this agreement shall automatically renew for one
(1) additional period of six (6) months under the same terms and conditions and
compensation set forth in paragraph 5.1(B), 5.1(F) and 5.4, hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE COMPANY
American Fire Retardant Corp.
A Nevada Corporation
Date: September 29, 1999 /S/ Xxxxxxx X. Xxxxx
--------------------------------------
By: Xxxxxxx X. Xxxxx
Its: President
Date: September 30, 1999 /S/ Xxxxxx X. Xxxxx
--------------------------------------
By: Xxxxxx X. Xxxxx
Its: Vice President, Chief Financial
Officer, Secretary
CAPSTONE
Capstone Partners, L.C.
A Utah Limited Liability Company
Dated: September 27, 1999 /S/ Xxxx Xxxxxx
--------------------------------------
By: Xxxx Xxxxxx, Esq.
Its: Chief Executive Officer
13
EXHIBIT 1
Specific Time Deadlines
Item 1. Private Placement Memorandum. Capstone as part of the compensation and
fees set forth in the Investment Banking and Consulting Agreement shall
prepare a Private Placement Memorandum pursuant to the provisions of Rule
506 of Regulation D along with the requisite subscription agreement,
investor questionnaire, investor representative questionnaire (Collectively
the "Private Placement Documents"), and the Form D Notice of Sale of
Securities and requisite state Blue Sky filings and notices pursuant to
Rule 506 and Sec. 18(b)(4)(D) of the Securities Act of 1933, for up to six
(6) states designated by the Company (the "Required Notices").
Any additional requisite Blue Sky filings and notices in excess of the
initial six (6) designated states shall be an additional cost of $250 per
state.
Due Dates:
(1) The draft of Private Placement Documents shall be completed no later
than 14 days following the execution of this Agreement.
(2) The final and completed Private Placement Documents along with the
Required Notices shall be completed no later than 10 days following the
approval of the draft of the Private Placement Document by the Company.
Costs:
The Company shall pay all required State Blue Sky filing fees associated
with the Private Placement, in addition to all other out-of-pocket costs
associated with the Private Placement Memorandum, such as copying and
binding charges, and the costs of distribution and mailing of the Private
Placement Memorandum.
