EXHIBIT 6.53
March 11, 1999
Xx. Xxxx X. Xxxxxxxxx
President and CEO
1-800-AutoTow, Inc.
0000 X. Xxxxxxxx Xxx.
Suite 000
Xxxxxxx Xxxxx, XX 00000
Dear Xxxx:
This letter confirms our understanding and agreement ("Agreement") of
the basis upon which GMA Partners, Inc. ("GMA") is being engaged to represent
and provide financial advisory services to 1-800-AutoTow, Inc. ("AutoTow" or the
"Company"). GMA is being engaged as the Company's exclusive financial advisor to
assist in arranging acquisition financing ("Financing") for the Company. This
financing effort shall include the possible sale of any of the Company's
securities or any other related transaction involving the issuance of any debt
or equity securities. For purposes of this Agreement, any of the foregoing shall
constitute a "Transaction."
This Agreement shall become effective upon the execution hereof by the
Company. The term of this Agreement shall be six (6) months, and thereafter
until terminated or, if a transaction is pending at termination, thereafter
until its conclusion or abandonment (the "Term"). This Agreement may be
terminated by either the Company or GMA after the six (6) months for any reason
by providing the other party 10 days prior written notice of its election to
terminate. The Company shall be liable for fees and expense reimbursements as
provided for in this Agreement and the Company's indemnification obligations set
forth herein shall survive such termination.
If the Company closes a Transaction during (i) the Term of this
Agreement or (ii) during the twelve (12) month period following the termination
of this Agreement with any debt or equity investor with which any "Contact" as
hereinafter defined has occurred during the Term of this Agreement with the
Company or GMA, including any Contacts which were introduced by SunTrust
Equitable Securities; then GMA shall be due and paid the Success Fee as
hereinafter defined upon the closing of such Transaction. For purposes of this
Agreement, "Contacts" are defined as meetings (in person or telephonic),
telecopier communication, written communication, or transmission of
communication or information by computer medium, with or to prospective debt or
equity investors.
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I. Performance of Services.
In performing its services GMA will:
(i) Assist the Company in raising new debt and/or equity capital to
complete the Company's currently anticipated acquisitions;
(ii) Discuss with the Company various alternative strategies, which may
be implemented in order to raise capital from new investors or lenders in a
manner that will create the greatest value for the Company's shareholders.
Working with the Company's management, GMA will assist in evaluating these
strategies and provide advice as to the manner in which to structure and
implement a Transaction designed to achieve the Company's stated objectives;
(iii) Assist management in preparing confidential descriptive memoranda
of the Company and its operations and finances, including financial information
for the Company's current acquisition candidates, for use in discussions with
potential investors or lenders;
(iv) Prepare a list of potential lenders, investors or financing
partners for the purpose of identifying, contacting and conducting discussions
with target lenders/investors in order to determine the level of interest in the
proposed Transaction. GMA will then qualify and screen potential
lenders/investors as well as arrange and attend exploratory meetings; and
(v) Render advice to the Company as to the values and financial
implications of various negotiating strategies and other considerations, which
could impact the likelihood and/or value of a Transaction. GMA will advise the
Company regarding specific offers by potential investors/lenders and, to the
extent deemed appropriate, assist and/or direct negotiations intended to lead to
a closing of any proposed Transaction.
The Company agrees to provide to GMA, among other things, all financial
data, corporate records, and information requested or reasonably required by GMA
to provide its services outlined in this Agreement. GMA shall have the right to
rely upon the accuracy and completeness of all information provided regarding
the Company, without the need for GMA to independently verify such accuracy or
completeness. All information included in any descriptive memorandum shall be
provided by and be the responsibility of the Company.
In the event that the Company requires additional investment banking
assistance, GMA and the Company will agree upon mutually acceptable compensation
to be paid to GMA, taking into account, among other things, the results
obtained, GMA's role in the additional investment banking assistance, and the
custom and practice among investment bankers acting in similar transactions.
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II. Compensation of Services
In consideration of services performed, the Company agrees to pay or
compensate GMA as follows:
a. A Retainer Fee ("Retainer Fee") equal to 50,000 shares of
restricted common stock of AutoTow will be issued to GMA upon
execution of this Agreement.
b. Upon invoice, reimbursement is due for all reasonable expenses
incurred in connection with the performance of GMA's services
pursuant to this Agreement. Such expenses shall primarily
consist of, but are not limited to, travel, delivery and data
services as well as other related communications expenses.
Once expenses reach an aggregate total of $7,500, GMA will
seek the Company's approval before incurring any additional
expenses.
Upon completion of a Transaction, GMA shall receive:
c. A Success Fee ("Success Fee"), payable in cash at closing,
equal to 4% of the total amount of Financing either funded or
committed to the Company, excluding any funded amount provided
by the shareholders of the Company or Banyan Capital through a
private placement of preferred stock, or other equity type
securities, currently expected to be between $750,000 and $2
million, or an affiliated entity of GMA.
d. In addition, the Company shall issue to GMA common stock
purchase warrants ("GMA Warrants") exercisable for six (6)
years from the closing date of any Transaction, to purchase
2.0% of the fully diluted common stock, post Transaction, of
the Company for a purchase price of $0.01 per share. The
Warrants will have unlimited piggyback registration rights as
well as standard anti-dilution provisions.
III. Indemnification
In the event that GMA becomes involved in any capacity in any
action, proceeding or investigation in connection with the performance by GMA of
the services contemplated by this letter, which involvement is not a result of
GMA's gross negligence or willful malfeasance in the performance of such
services, the Company will, upon the request of GMA from time to time, reimburse
GMA for its reasonable legal and other expenses (including the reasonable cost
of any investigation and preparation) incurred in connection therewith. The
Company will also indemnify GMA against any losses, claims, damages or
liabilities to which it may become subject in connection with the performance by
GMA of the services contemplated by this letter, except to the extent that any
such loss, claim, damage, liability or expense results from GMA's gross
negligence or willful malfeasance in performing the services which are the
subject of this letter. If for any reason the foregoing indemnification is
unavailable to GMA or insufficient to hold GMA harmless, then the Company shall
contribute to the amount paid or payable by GMA as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and GMA on the other
hand, but also the relative fault of the Company and GMA, as well as any
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relative equitable considerations, except that the Company shall not in any
event be responsible for any such loss, claim, damage or liability resulting
from GMA's gross negligence or willful malfeasance in performing the services
which are the subject of this Agreement; provided, however, that in no event
shall the amount contributed by GMA pursuant to this paragraph exceed the amount
of fees actually received by GMA under this Agreement. The Company's
reimbursement, indemnity and contribution obligations under this paragraph shall
be in addition to any liability which it may otherwise have, shall extend upon
the same terms and conditions to GMA's employees and controlling persons (if
any), and shall be binding upon and inure to the benefit of any successors,
assigns, heirs and personal representatives of GMA and any such person. The
Company agrees that neither GMA nor any of its directors, agents, or affiliates
shall have any liability to the Company for any losses, damages, liabilities or
expenses arising out of the performance of services by GMA under this Agreement,
unless it is finally determined judicially that such losses, damages,
liabilities or expenses resulted directly from the gross negligence or willful
malfeasance of GMA.
IV. Exclusivity
In order to coordinate the efforts of GMA and the Company, and to
maximize the possibility of completing satisfactory Transactions during the Term
of this Agreement, GMA shall have the authority to initiate discussions with
potential investors/lenders. The Company and any of its shareholders or officers
shall conduct any discussions with regard to a proposed Transaction in
conjunction with GMA. In the event the Company, its directors, officers,
employees or shareholders receive any inquiries concerning the availability of
the Company's securities or assets for purchase, then the Company shall promptly
notify GMA of such inquiry or communication.
V. Disclosure
Except as required by law, any financial or other advice, descriptive
memoranda or other documentation rendered by GMA or prepared by or on behalf of
GMA pursuant to this Agreement may not be disclosed publicly in any manner
without the prior consent of GMA. All non-public information provided by the
Company to GMA will be considered confidential information and shall be
maintained as such by GMA until the same becomes generally known to third
parties or the public without release thereof by GMA.
VI. Public Notice
Following the completion of a Transaction, the Company and GMA both
agree that either the Company or GMA has the right to place advertisements in
financial and other newspapers and journals as the Company or GMA deems
appropriate, describing the Transaction and the services provided to AutoTow,
provided that the Company on one hand and GMA on the other shall submit copies
of such advertisements to the other party so that the form, content and timing
of such advertisements may be approved. Such approval shall not be unreasonably
withheld or delayed.
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VII. Entire Agreement and Governing Law
This Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof and supersedes and cancels any prior
communications, understandings and agreements. This Agreement cannot be modified
or changed, nor can any of its provisions be waived, except by written agreement
executed by both parties hereto.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia. The parties hereto agree to submit to
arbitration any action or dispute arising under this Agreement or any action to
enforce the terms hereof. Such arbitration shall be determined pursuant the
Commercial Arbitration Rules of the American Arbitration Association.
If any term, provision, covenant or restriction contained in this
Agreement, including Article III, is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
VIII. Acceptance
Please confirm your acceptance of the foregoing terms of the Agreement
by signing on behalf of the Company, then returning an executed original of the
Agreement to GMA Partners, Inc. whereupon it shall become a binding agreement
between the Company and GMA.
The terms of this Agreement will expire on March 16, 1999, unless accepted by
you prior to such date.
Very truly yours,
GMA PARTNERS, INC.
/s/ Xxx X. Xxxxx
----------------
Xxx X. Xxxxx
Managing Director
Accepted and agreed to as of March 11, 1999:
1-800-AUTOTOW, INC.
/s/ Xxxx X. Xxxxxxxxx
---------------------
Xxxx X. Xxxxxxxxx
President
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