Hyperion
Non-exclusive Financial Consulting Agreement
March 18,2002
Xx. Xxxxxx Xxxxxxxx
Chief Executive Officer
Air Packaging Technologies, Inc.
00000 Xxx Xxxxxx Xxxx
Xxxxxxxx. XX 00000
Dear Xx. Xxxxxxxx:
This letter agreement (this "Agreement") confirms Air Packaging
Technologies, Inc's (the "Company") engagement of Hyperion Partners Corp's
("Hyperion") as investment banker financial advisor and consultant of the
company and sets forth the terms and conditions pursuant to which Hyperion shall
perform in said capacity.
1. Retention. Subject to the terms and conditions of this Agreement. The
Company hereby engages Hyperion to act on the behalf of the Company as a
non-exclusive investment banker. Financial advisor and consultant commencing on
the date hereof and continuing for a period of twelve months hereafter (the
"Engagement"). This Agreement may be cancelled upon 30-calander days written
notice by either party.
2. Services. During the engagement and the subject to the terms and
conditions herein Hyperion agrees to provide financial services to the Company
consisting of: (i) evaluating the Company's requirements for funding growth and
expansion of the Company's operations: (ii) advising the Company as to
alternative modes and sources of financing: (iii) analyzing the impact of
business decisions, policies, and practices on the value of the Company's
business and securities: (iv) increasing the public exposure of the Company
through introductions to institutions. Brokers and the investment community: and
(v) bringing to the attention of the Company possible business opportunities and
evaluating business opportunities generally. Whether or not Hyperion or others
originate such opportunities. Hyperion agrees to devotc such time, attention,
and energy as may be necessary to perform the services hereunder. The Company
expressly acknowledges and agrees that nothing herein shall be construed,
however, to require Hyperion to (i) provide a minimum number of hours of service
to the Company or to limit the right of Hyperion to perform similar services for
the benefit of persons or entities other than the Company, (ii) commit to
purchase securities of the Company of secure financing on behalf of the Company
by third parties, (iii) ensure that any potential investor(s) introduced to the
Company by Hyperion will execute final agreement with the company or (iv)
guaranty the obligations of any investor(s) introduced to the Company by
Hyperion under any final agreements with such investor(s)
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3. Renumeration. For undertaking this engagement and for other good and
valuable consideration. Including but not limited to the substantial benefit the
Company will derive from the ability to announce its relationship with Hyperion,
the company agrees as follows:
(a) Commencement Retainer. For undertaking the engagement and for
other good and valuable consideration the Company agrees to issue to the
Consultant a commencement retainer of 75,000 shares of the Company's common
stock ("Common Stock") This commencement Bonus shall be issued to the Consultant
Immediately following execution of this agreement and shall when issued and
delivered to the Consultant be fully paid and non-assessable. The shares shall
have piggyback registration rights. The shares shall be transferable with
Hyperion at Hyperion's discretion, within 5 business days from the date hereof,
the Company shall issue and deliver 75,000 shares of the Company's common stock
in the aggregate (the "Commencement Retainer" shares) which shares are non
refundable and do not constitute prepayment for future services to Hyperion
Holdings, LLC.
(b) Commencement Warrants. Within 5 business days from the date here
of the Company shall issue and deliver a warrant to purchase 75,000 shares of
Company's common stock in the aggregate (the "Commencement Retainer Warrants")
which warrants are nonrefundable and do not constitute prepayment for the future
services with a strike price equal to $.60 per share. The common shares
underlying the warrants will have piggyback registration rights The Warrants
shall be exercisable immediately after the date of issuance and shall expire 5
years after the date of issuance unless otherwise extended by the company. The
warrants will be non-redeemable and provide for automatic exercise upon
expiration (if only I the warrants are in the money at the time of expiration).
The warrants shall be transferable, subject only to the securities laws, by the
holder thereof.
(c) Placement Fees. The Company shall pay to Hyperion a placement fee
equal to 8% of the total purchase price of the Company's securities sold
including all amounts placed in an escrow account or payable in the future
(including future issuances resulting from anti dilution provisions) and all
amounts paid or payable upon exercise, conversation, and exchange of such
securities received or receivable directly by the Company ("Aggregate
Consideration") in any placement of the Company's securities in connection with
Hyperion's efforts hereunder. If the Aggregate Consideration is in the form of
an equity credit line (ECL). The Company will pay upon each draw down cash fee
of 5%. Such consideration paid in cash shall be paid directly to Hyperion out of
proceeds of such a sale either directly from an investor(s) of the Company's
securities or out of an escrow arrangement and when such consideration is paid
to the Company. Notwithstanding the foregoing, in connection with exercise of
any investor warrants issued in connection with a placement of the securities in
connection with Hyperion's efforts hereunder. Hyperion's placement fee shall be
reduced to 4% of the cash proceeds and shall be paid on receipt of such funds
into the escrow account established for this purpose by the Company
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(d) Warrants On each closing date on which Aggregate Consideration is
paid or becomes payable, the Company shall issue to Hyperion Holdings L.L.C
warrants (the "warrants") to purchase, in the aggregate 8% of the amount of the
Aggregate Consideration paid to the Company. (For example, if a $2 million
private placement, 160,000 warrants will be issued) If the Aggregate
Consideration is in the form of an Equity Credit Line (ECL) the Company shall
issue to the individuals and/or entities set forth above in subscriptions (a)
and (b) hereunder warrants (the "ECL Warrants") to purchase in the aggregate 2%
of the total amount of Equity Credit Line (For example if a $20 million credit
line, 400,000 warrants will be issued). The warrants shall be issued directly to
Hyperion Holdings L.L.C. The exercise price of the Warrants shall be priced at
105% of the closing bid price on the date prior to the completion of the
financing. The Warrants will have a 5-year maturity after the date of issuance,
unless otherwise extended by the Company. The Warrants shall include customary
anti-dilution protection including protection against issuance of securities at
prices (or with exercise prices in the case of warrants options or rights) below
the lower of the exercise price of the Warrants or the then fair market value of
the underlining common equity and will be non-redeemable and provide for the
automatic exercise upon Expiration (if the warrants are in the money). The
Warrants shall be transferable subject only to the securities laws by the
holders thereof.
(e) Mergers and Acquisitions. The Company agrees that if Hyperion
directly or indirectly introduces the Company during the term of the agreement
to any person or entity that becomes a party to a merger, acquisition joint
venture or other similar transaction with the Company or any affiliate thereof,
then the Company shall pay to Hyperion the cash fee calculated as a percentage
of the Transaction Value (as defined herein) in accordance with the following
scale:
o 6% on the first $5,000,000
o 5% on the amount from $5,000,001 to $7,000,000
o 4% on the amount from $7,000,001 to $9,000,000
o 3% on the amount from $9,000,001 to $11,000,000
o 2% on the amount above $11,000,001
"Transaction Value" shall mean the aggregate value of all cash
securities notes debentures purchase options royalties, management and
consulting agreements; And installment payments consideration paid for assets
owned by majority subsidiaries of the Company or entries in any business
relationship which are used in or are potentially useful in the Company's the
total value of liabilities on the Company's balance sheet that are transferred
to the acquirer of the stock of the Company In a stock transaction and any other
tangible net benefit to the Company its shareholders or directed beneficiaries
and other property and valuable consideration of every kind either (i)
transferred to the Company and its affiliates in connection with any transaction
involving any investment loan or any other equity or debt financing for or
acquisition of the Company of any affiliate thereof or in connection with an
acquisition of equity or assets thereof or (ii) transferred by the Company and
its affiliates in any transaction.
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involving an investment in or acquisition of any third party or acquisition of
the equity or assets thereof by the Company or any affiliate thereof or (iii)
transferred or otherwise contributed by all parties to enter into any joint
venture or similar joint enterprise or undertaking with the Company or any
affiliate thereof. The aggregate value of all such cash, securities and other
property and valuable consideration shall be the aggregate fair market value
thereof as determined jointly by Hyperion and the Company or by an independent
appraiser jointly selected by Hyperion and the Company.
(f) Tail Period. The Company shall and shall have cause its affiliates
to pay Hyperion all compensation described in this Section 4 with respect to all
financing and merger and acquisition candidates at any time prior to the
expiration of 1 year after the Termination Date (the "Tail Period") if such
candidates were identifies to the Company by Hyperion during the Authorization
Period and Hyperion notified Air Packaging Technologies in writing of the
introduction If Hyperion introduces an investor who completes an equity Credit
Line (ECL) with the company Hyperion will be paid throughout the term of the ECL
4. Representations Warranties and Covenants of the Company. The Company
hereby represents, warrants and covenants as follows:
(a) The Company has the full right power and authority to enter into
this Agreement and to perform all of its obligations hereunder (ii) this
agreement has been duly authorized and executed by and constitutes a valid and
binding agreement of the Company enforceable in accordance with its terms (iii)
the execution and delivery of this agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of
(A) the Company's certificate of incorporation or by-laws or (B) any agreement
to which the Company is a party or by which any of its property or assets is
bound.
(b) Upon the filing of any registration statement by the Company
pursuant to the Securities Act or 1933 as amended in connection with the
proposed offer and sale of any of its securities by it or any of its security
holders under which the Shares then issued but not yet registered for resale
could be registered the Company shall use its best efforts to include the said
Shares and unregistered Warrant Shares under said registration statement The
obligation of the Company under this sub-section shall be unlimited as to the
number of registration statements to which it applies.
5. Representations, Warranties and Covenants of Hyperion. Hyperion hereby
represents and warrants that: (i) it has the full right power and authority to
enter into this Agreement and to perform all of its obligations hereunder (ii)
this Agreement has been duly authorized and executed by and constitutes a valid
and blinding agreement of Hyperion enforceable in accordance with its terms,
(iii) the execution and delivery of this Agreement and the consummation of the
transaction contemplated hereby do not conflict with of result in a breach of
(A) Hyperion's certificate of incorporation or by-laws, or(B) any agreement to
which Hyperion is a party or by which any of its property or assets is bound.
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6. Independent Contractor. Hyperion and the Company hereby acknowledge that
Hyperion is an independent contractor. Hyperion shall not hold itself out as,
nor shall it take any action from which others might infer that it is a partner
or agent of, or joint venture with, the Company. In addition, Hyperion shall
take no action, which binds, or purports to bind, the Company.
7. Reimbursement. The Company agrees to reimburse promptly Hyperion
Partners, upon request from time to time, for all reasonable, out-of-pocket
expenses incurred by Hyperion Partners (including fees and disbursements of
counsel and of other consultants and advisors retained by Hyperion Partners) in
connection with the matters contemplated this Agreement. In the even that
Hyperion Partners is successful in completing a private placement or a merger
with a value in excess of $5 million for Air Packaging Technologies, Inc., the
company will agree to pay up to $5,000.00 for a Tombstone advertisement that
will be placed in the South East edition of the Wall Street Journal. Air
Packaging Technologies, Inc. will pre-approve any expenses above $250.00 in
writing.
8. Confidentiality. The Company acknowledges that all opinions and advice,
whether oral or written, given by Hyperion to the Company in connection with
this Agreement are intended solely for the benefit and use of the Company in
considering the transactions to which they relate and the Company agrees that no
person or entity other than the Company shall be entitle to make use of or rely
upon the advice of Hyperion to be given hereunder and no such opinion or advice
shall be used by the Company for any other purposes or reproduced, disseminated,
quoted or referred to by the Company in communications with third parties at any
time, in any manner of for any purpose, nor may the Company make any public
references to Hyperion or use Hyperion's name in any annual report or any other
report or release of the Company without Hyperion's prior written consent,
except that the Company may, without Hyperion's further consent, disclose this
Agreement (but not information provided to the Company by Hyperion) in the
company's filings with the Securities and Exchange Commission, if such
disclosure is required by law.
9. Notices. Except as otherwise specifically agreed, all notices and other
communications made under this Agreement shall be in writing and, when delivered
in person or by facsimile transmission, shall be deemed given on the same day if
delivered on a business day during normal business hours, or on the first day of
business day following the delivery in person or by facsimile outside normal
business hours, or on the date indicated on the return receipt if sent
registered or certified mail, return receipt requested. All notices sent
hereunder shall be sent to the representatives of the party to be noticed at the
addresses indicted respectively below, or at such other address as the parties
to be noticed may from time to time by like notice hereafter specify:
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If to the Company: Xx. Xxxxxx Xxxxxxxx
Chief Executive Officer
Air Packaging Technologies, Inc.
00000 Xxx Xxxxxx Xxxx
Xxxxxxxx, XX
If to Hyperion: Hyperion Partners Corp
0000 Xxxxxxxxx Xxxxx
Xxxxx X-000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Xx.
(000) 000-0000 (Fax)
10. Entire Agreement. This Agreement contains the entire agreement between
the parties. It may not be changed except by agreement in writing signed by the
party against whom enforcement of any waiver, change, discharge, or modification
is sought. Waiver of or failure to exercise any rights provided by this
Agreement in any respect shall not be deemed a waiver of any further or future
rights.
11. Survival of Representations and Warranties. The representations,
warranties, acknowledgements and agreements of Hyperion and the Company shall
survive the termination of this agreement. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, however, that such severability shall
be ineffective if it materially changes the economic benefit of this Agreement
to any party.
12. Governing Law. This Agreement shall be construed according to the laws
of the State of Georgia and subject to the jurisdiction of the courts of said
state, without application of the principles of conflicts of laws. Each of the
parties consents exclusively to personal jurisdiction in the Xxxxxx County,
Georgia, waived any objection as to jurisdiction or venue, and agrees not to
assert any defense based on lack of jurisdiction or venue. In any litigation,
arbitration, or other dispute resolution arising out of or relating to this
Agreement, the prevailing party shall be reimbursed by the other party (as
determined by a court of competent jurisdiction) for reasonable attorney's fees
and/or arbitration costs.
13. Successors. This Agreement shall be binding upon the parties, their
successors and assigns.
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14. Execution. This Agreement may be executed in any number of counterparts
each of which shall be enforceable against the parties executing such
counterparts, and all of which together shall constitute a single document.
Except as otherwise stated herein, in lieu of the original documents, a
facsimile transmission or copy of the original documents shall be as effective
and enforceable as the original.
HYPERION PARTNERS CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxxx, Xx., President
Agreed to and accepted this ___ day of March, 2002:
Air Packaging Technologies, Inc.
By: /s/ Xxxxxx Xxxxxxxx
-------------------
Name: Xxxxxx Xxxxxxxx
-----------------
Title: President
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