1
EXHIBIT 10.10
[XXXXXX XXXXXX LOGO]
FINANCIAL CONSULTING SERVICES AGREEMENT
THIS AGREEMENT, is made and entered into on this 16th day of APRIL, 1999 by and
between XXXXXX XXXXXX SECURITIES, INC., having offices at 00000 XxxXxxxxx
Xxxx., Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 (hereafter referred to as
Consultant) and PROBEX CORP, having offices as 0000 XxXxx, Xxxxx 0 00,
Xxxxxxxxxx, Xxxxx, 00000 (hereafter referred to as Client).
It is agreed by both parties that Consultant and Client will enter into a
binding agreement where Consultant will be retained as a non-exclusive financial
consultant for Probex Corp. as earlier defined in the 'LETTER OF ENGAGEMENT'
dated January 12th, 1999.
The Client desires to be assured of the association and services of the
Consultant in order to avail itself of the Consultant's experience, skills,
abilities, knowledge, and background to facilitate long range strategic
planning, and to advise the Client in business and/or financial matters and is
therefore willing to engage the Consultant upon the terms and conditions set
forth herein. Consultant shall also provide assistance with communications, as
needed, between the Client and the investors of the private placement offering
as defined in the 'LETTER OF ENGAGEMENT' dated January 12th, 1999
Client will pay a fee to Consultant of $1,500 per month for the duration of this
Agreement. In addition, Client shall pay an engagement fee of $1,500 upon
execution of this agreement. The payment(s) is due on the 15th day of each
effective thirty-day (30) period and will cover a service period of Twenty-Four
(24) Months. This Agreement is renewable, under the same terms, for an
additional Twelve (12) Months upon written approval from both parties.
It is understood that, as your non-exclusive financial consultant, Consultant
must in all instances rely upon the accuracy of information supplied to us from
Client's Management, Officers and Directors. The Client assumes full
responsibility for the accuracy and completeness of such information and Client
agrees to indemnify and hold harmless from all claims, cost or other expenses
incurred by any of them (including reasonable attorney's fees) arising out of or
due to the inaccuracies or incompleteness of the material or information
provided by client. The Client will approve all written material prior to
distribution.
Consultant shall at all times act as an independent contractor in the
transaction of its business and shall conduct its activities in accordance with
the rules and regulations of the Securities and Exchange Commission and the long
standing recognized industry business practices.
In witness Hereof, the parties have executed this document as of the date and
year below.
By /s/ Xxxx X. Xxxxxx Date April 16, 1999
-------------------------- ----------------------------
Client/Company
Title President
--------------------------
By /s/ E. Xxxxxx Xxxxxxxx Date April 16, 1999
-------------------------- ----------------------------
E. Xxxxxx Xxxxxxxx
Title CHAIRMAN
--------------------------
2
[XXXXXX XXXXXX LOGO]
LETTER OF ENGAGEMENT
January 12th, 1999
PROBEX CORP.
0000 XXXXX, XXXXX 000
XXXXXXXXXX, XXXXX 00000
Dear Sirs;
Discussions have been held between you and Xxxxxx Xxxxxx Securities,
Inc ("Agent") concerning a proposed private offering by Probex Corp.
(hereinafter the "Company"). The Agent hereby confirms its interest in
underwriting the proposed private placement.
1. Timetable. The parties hereto shall forthwith agree upon a timetable
for the filing of any necessary blue-sky filings and all other steps
necessary to effectuate the private offering at a date acceptable to
the Agent.
2. Agent's Counsel. The Broker Dealer Selling Agreement shall be prepared
by the Company, and the Company shall make all required filings with
respect to the SEC. All corporate proceedings undertaken by the Company
and other legal matters, which relate to the private offering and other
related transactions shall be satisfactory in all material respects to
counsel for the Agent.
3. Private Offering, Closing and Cold Comfort Letter. The Company proposes
to offer, on a non exclusive basis, through the Agent and/or an
underwriting group selected by the Agent up to One Million Four Hundred
Thousand Units at $.50 per unit for an aggregate total of $700,000.
Each unit is comprised of one share of common stock and one warrant to
purchase an additional share of common stock for a period of
twenty-four months at a price of $.75 per share. The Agent has an
over-allotment option to place up to an additional 10% of the shares
offered. The Agent contemplates to underwrite the offering on a
best-efforts basis.
4. Warrants and Options. Warrants and options issued and to be issued by
the Company within a specified time period shall be acceptable to the
Agent.
5. Future Sales. It is understood that during the period of the proposed
Offering and for one year from the date of the offering memorandum, the
Company will not sell any equity or long-term convertible-debt
securities at a price per share, or similar conversion price, which is
less than that of the current private offering without the Agent's
prior written consent, which may not be unreasonably withheld.
MEMBER NASD/SIPC INSURED
[XXXXXX XXXXXX LETTERHEAD]
3
6. Reciprocal Indemnification. It is understood that there is reciprocal
indemnification between the Company and the Agent as to certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
7. Information Available. It is understood and agreed between the Company
and the Agent that all documents and other information relating to the
Company's affairs will be made available upon request to the Agent and
its attorneys at the Agent's office or at the office of the Agent's
attorney and copies of any such document will be furnished upon request
to the Agent or its attorneys. Included within the documents which must
be made available as soon as possible are at least all Articles of
Incorporation and Amendments, By-Laws and Amendments, Minutes of all
the Company's Incorporations, Directors and Shareholders Meetings, all
financial statements and correct copies of any material contracts,
leases, and agreements to which the Company is a party. At the earliest
practicable date, the Company will furnish the Agent a business plan
showing projected cash flow (or deficiencies) covering a three-year
period. In addition, the Company will provide the Agent with unaudited
quarterly financial data.
8. Properties, Capital Structure, Dilution, Employee Benefit Plans. The
properties owned or held under option by the Company, the capital
structure of the Company immediately preceding the private offering,
the contemplated dilution to the private investor, and Company's
business plan shall be acceptable to the Agent. It is contemplated that
the Shares held by the investors in the private offering will
represent at least 10% of the outstanding Shares. At such time as
investors of the private offering come to own 10% of the outstanding
shares, it is understood that for one year from the date of the
offering memorandum, any future and/or presently contemplated employee
(including officers and/or directors) incentive plan (including royalty
plan), of whatever nature shall be fully disclosed to the Agent and any
new such plan shall be subject to the approval of the Agent, which
shall not be unreasonably withheld.
9. Blue-Sky Laws. It is understood and agreed between the Company and the
Agent that it shall be the obligation of the Company to qualify the
sale of the Company's common stock in such states as may be reasonably
designated by the Agent. The officers, directors and promoters of the
Company will comply with applicable Blue-Sky escrow requirements,
including those pertaining to the escrow of shares provided such escrow
shall in no event extend beyond a period of two years. The parties
hereto shall agree on the division of legal work pertaining to Blue-Sky
qualification.
10. Underwriting Discount. The Shares (including over-allotment shares)
will be placed to institutional and accredited investors by the Agent
and selling group members with a fee of TEN percent (10%), for shares
placed pursuant to their efforts, from the private offering prices. The
Agent may re-allow all or part of such fee to any member of the selling
group. In addition, a fee of FIVE percent (5%) shall be immediately
payable upon the exercise of any Warrants distributed to investors in
the private offering.
11. Agent's Due Diligence. It is understood that the Company shall pay a
fee of TWO percent (2%) to the Agent for its due diligence and
selling-group management efforts for shares placed pursuant to its
efforts. In the event the offering for any reason is not closed, the
Agent will not receive any portion of said due diligence fee and the
Company and the Agent shall be responsible, for their own expenses,
12. Agent's Expense Allowance. It is understood that the Company shall
reimburse the Agent for its expenses on a non-accountable basis in the
amount of THREE percent (3%), for shares placed pursuant to its
efforts. In the event the offering for any reason is not closed, the
Agent will not receive any portion of said expenses allowance, and the
Company and the Agent shall be responsible for their own expenses.
2
4
13. Warrants. Upon termination of the offering, the Company will sell to
the Agent Common Stock Purchase Warrants, for a purchase price of
$.0001 per Warrant, entitling the Agent to purchase one share of the
Company's Common Stock for each ten shares of the Company's Common
Stock which have been sold in the offering, including, over-allotment
shares. The Warrants shall be non-exercisable for a period of twelve
(12) months following the date of the closing of the offering, However,
if the Company merges or reorganizes in such a way as to terminate the
Warrants, the Warrants may be exercised immediately prior to such
action. Also, the Warrants will contain anti-dilution provisions
acceptable to the Agent.
The Warrants will be exercisable for a period of FIVE (5) years. If the
Warrants are not exercised during this term, they shall by their terms
automatically expire, The exercise price of the Warrants shall be 110%
of the per share offering price. The Company will set aside and at all
times have available a sufficient number of shares of its Common Stock
to be issued upon the exercise of the Warrants to be sold to the Agent.
The Warrants will not be transferable to anyone for a period of TWELVE
(12) months alter the close of the offering, except to the officers of
the Agent.
14. Consulting Agreement. It is understood that the Company shall retain
the Agent as the Company's non-exclusive financial consultants for a
period of 24 months to commence on the closing of the offering, at a
monthly fee of $1,500, or an aggregate of $36,000. Pursuant to this
agreement, the Agents shall provide advisory services related to merger
and acquisition activity, corporate finance and other matters. This
agreement shall be completed and executed between the Company and the
Agent at such time that the Company has received Five Hundred thousand
dollars ($500,000) in gross proceeds from tile offering. In addition,
the Agent shall be given a right of first refusal on future public
offerings during the period of this consulting agreement.
15. Expenses. The Company shall bear all costs and expenses incident to
their issuance, offer, and delivery of the Shares, including all
expenses and fees incident to the filing of any required forms with the
SEC and/or NASDAQ, the costs and counsel fees of qualification under
state securities laws, and fees and disbursements of counsel and
accountants for the Company, costs for preparing and printing any
offering documents and cost of printing as many copies of the offering
documents as the Agent may deem necessary and related exhibits. The
Agent agrees to pay all fees and expenses of any legal counsel whom it
may employ to represent it separately in connection with or on account
of the proposed offering by the Company other than counsel fees
relating to blue-sky filings. To the extent blue-sky work is undertaken
by counsel to the Agent pursuant to paragraph 9 hereof, it shall be
separately billed to the Company and shall be the financial obligation
of the Company
16. Representations of the Company. The Company represents and warrants
that no officer, director or shareholder of the Company is a member of
the NASD, an employee or associated member of the NASD. The Company
represents and Warrants that it has not promised or represented to any
person that any part of the Shares will be directed or otherwise made
available to them in connection with the proposed private placement.
The Company represents that it has separately disclosed to the Agent
all potential conflicts of interest involving officers, directors,
principal shareholders and/or employees.
5
17. 1934 Act Registration and Quarterly Reports to Shareholders, Quotation
on NASDAQ, Listing in Xxxxx'x, Transfer Agent. The Company represents
that, at a minimum, it comply with all mandated and necessary filing
requirements with the NASD and the SEC such as is required to maintain
a listing on the NASD Electronic Bulletin BOARD (NASD:EBB) The Company
will within 120 days from completion of the offering apply for
"listing" on a current basis, if not already listed on an exchange
acceptable to the Agent. The Company, if it does not already have one,
shall obtain a CUSIP number for its certificates and shall engage a
transfer agent acceptable the Agent.
18. Termination. The Company many, at its own discretion, terminate the
offering at any time with a minimum often (10) days written notice to
the Agent. Termination of the offering will relate wholly to the
private offering contemplated herein and have no effect on the
Consulting Agreement as defined in paragraph 14 should such terms have
been met prior to the written termination.
19. Statement of Intent. It is understood that this letter is merely a
letter and statement of intent and not a legally binding agreement
except as to matters set forth in Paragraphs 6, 12 and 15 hereof, The
Agent reserves the right in its uncontrolled discretion to determine
whether the offering can be successfully marketed through a selling
syndicate, and may, without any obligation to the Company, for any
reason, including, without limitation, the generality of the foregoing,
market conditions (both those relating to securities and commodities
generally and those relating to the Company's stock) and the reaction
of prospective members of the selling group to the proposed offering,
decline to proceed further with the offering. If this letter correctly
sets forth our understanding, please so indicate by signing and
returning to us tile enclosed copy of this letter.
Very truly yours,
XXXXXX XXXXXX SECURITIES, INC.
By /s/ Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx, President
Understood and accepted
On 1/13 , 1998
---------------
By /s/ Xxxx X. Xxxxxx
------------------------
(Signature)
Xxxx X. Xxxxxx
-------------------------
(Name)
President
-------------------------
(Title)
4
