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EXHIBIT 10.1
FINANCIAL ADVISORY AGREEMENT
This Agreement is made and entered into as of the 25th day of July,
2000, between Corpas Investments, Inc. (the "Company") and South Shore
Investments Ltd. Inc.(the "Financial Advisor").
W I T N E S S E T H:
WHEREAS, The Company is seeking certain financial advice regarding
business and financing activities; and
WHEREAS, the Financial Advisor is willing to furnish certain business
and financial related advice and services to the Company on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms and covenants
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. PURPOSE. The Company hereby engages the Financial Advisor on a
non-exclusive basis for the term specified in this Agreement to render financial
advisory consulting advice to the Company relating to financial and similar
matters upon the terms and conditions set forth herein.
2. DUTIES OF THE FINANCIAL ADVISOR. During the term of this Agreement,
the Financial Advisor will provide the Company with consulting advice as
specified below at the request of the Company, provided that the Financial
Advisor shall not be required to undertake duties not reasonably within the
scope of the consulting advisory service in which the Financial Advisor is
engaged generally. In performance of these duties, the Financial Advisor shall
provide the Company with the benefits of its best judgment and efforts, and the
Financial Advisor cannot and does not guarantee that its efforts will have any
impact on the business of the Company or that any subsequent improvement will
result from the efforts of the Financial Advisor. It is understood and
acknowledged by the parties that the value of the Financial Advisor's advice is
not measurable in any quantitative manner, and that the amount of time spent
rendering such consulting advice shall be determined according to the Financial
Advisor's discretion.
The Financial Advisor's duties shall include, but will not necessarily
be limited to, rendering the following services to the Company:
(a) Study and review the business, operations, and historical
financial performance of the Company (based upon management's forecast of
financial performance) so as to enable the Financial Advisor to provide advice
to the Company;.
(b) Assist the Company in attempting to formulate the optimum
strategy to meet the Company's working capital and capital resources needs;
(c) Assist in the formulation of the terms and structure of
any reasonable proposed private placement equity or private placement debt
financing transaction involving the Company ("Transaction");
(d) Assist in any presentation to the Board of Directors of
the Company, as requested, in connection with a proposed Transaction; and
(e) Advise the Company as to the expected reaction of the
financial community to any Transaction and assist in determining the optimum
means of communicating the pertinent aspects, such as strategic considerations,
benefits to the Company and financial impact, to the financial community.
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3. TERM. The term of this Agreement shall be for one (1) year
commencing from the date of this Agreement ("Commencement Date"); provided,
however, that this Agreement may be renewed or extended upon such terms and
conditions as may be mutually agreed upon by the parties hereto.
4. FINANCIAL ADVISORY FEE. Upon the execution of this Agreement, the
Company shall sell to the Financial Advisor and/or persons designated by the
Financial Advisor ("holders"), for an aggregate purchase price of ten dollars
($10), Common Stock Purchase Warrants (the "Warrants") for the purchase of an
aggregate of 750,000 shares of the Company's Common Stock at exercise prices as
reflected below:
NUMBER OF WARRANTS EXERCISE PRICE
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250,000 $1.00
250,000 $1.50
250,000 $2.00
The Warrants may be exercised in whole or in part, at any time, and
from time to time, during the five (5) year period following the date of this
Agreement.
In the event the shares of common stock underlying the Warrants (the
"Shares") are not registered under the Securities Act of 1933, as amended (the
"Act") when exercised and issued, the certificates representing the Shares shall
bear the following legend:
The securities represented by this certificate may not be offered or
sold except pursuant to (i) an effective registration statement under
the Act, (ii) to the extent applicable, Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of securities),
or (iii) an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from
registration under such Act and applicable state securities laws is
available.
If at any time after the date of this Agreement, the Company shall
register any of its securities or securities of selling stockholders for sale
pursuant to a Registration Statement under the Act, or file a Notification on
Form 1-A, or otherwise register securities under the Act (collectively the
"Registration Documents"), the Company shall be required to register all 750,000
Shares by offering all of the holders of the Warrants and/or the Shares the
opportunity to register the Shares without cost to the holders thereof, except
for costs of brokerage commissions and costs of any counsel to the holders. In
connection with these registration rights, the Company shall give all of the
holders of the Warrants and/or Shares notice by certified or registered mail,
return receipt requested, at least twenty (20) business days prior to the filing
of such Registration Document, of the Company's intent to register the Shares.
The Company agrees to periodically advise the holders of the status of the
Registration Statement, and the effective date of the Registration Statement. In
addition, the Company agrees to deliver copies of the final prospectus to each
of the holders.
If the Company shall subsequently register any of its securities or
securities of selling stockholders for sale pursuant to a Registration Statement
under the Act, or file a Notification on Form 1-A, or otherwise register
securities under the Act (collectively the "Subsequent Registration Documents"),
and the holders still own any Warrants and/or Shares, the Company shall be
required to offer all of such holders of the Warrants and/or the Shares the
opportunity to register the Shares without cost to the holders thereof, except
for costs of brokerage commissions and/or costs of counsel to such holders. In
connection with these piggyback registration rights, the Company shall give all
of the holders of the Warrants and/or Shares notice by certified or registered
mail, return receipt requested, at least twenty (20) business days prior to the
filing of each such Registration Document. If the Financial Advisor and/or such
holders of the Warrants and/or Shares notify the Company within fifteen (15)
days after receipt of any such notice of its or their desire to include any of
such Shares in such proposed Subsequent Registration Documents, the Company
shall afford the Financial Advisor and such holders of such Warrants and/or
Shares the opportunity to have any Shares registered under such Registration
Documents.
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In connection with any registration filed pursuant to Subsequent
Registration Documents pursuant to this Section 4 involving an underwritten
offering, if the managing underwriter or underwriters advise the Company in
writing that, in its or their opinion, the number of Shares requested to be
included in such registration would have a material adverse effect on such
offering (including, without limitation, a material decrease in the price at
which such securities can be sold), then the amount of Shares included in the
offering shall be reduced and the Shares and the other securities to be offered
shall participate in such offering as follows: (i) securities to be sold by the
Company shall have priority over all securities to be offered by stockholders of
the Company, including the Holders and (ii) if securities in the excess of the
Company's securities can, in the good faith judgment of such managing
underwriter or underwriters, successfully be marketed in such offering, the
Shares and the other securities to be offered by stockholders of the Company,
including the Holders, shall be included in such offering, subject to reduction
pro rata in proportion to the number of securities proposed to be included in
such offering by the Holders and other stockholders (based on underlying numbers
of shares of Common Stock).
During such time as the Warrants are outstanding, the Company agrees
not to merge, reorganize, or take any action which would terminate the Warrants
without first making adequate provisions for the Warrants and Shares. Other
terms regarding the rights of the holders of the Warrants are included in the
Warrant Certificate to be issued pursuant to this paragraph.
5. FINANCING FEE. In the event the Financial Advisor introduces, or
otherwise participates in effecting a Financing for the Company in a public debt
and/or equity transaction, pursuant to which the Company obtains financing or
other consideration, the Financial Advisor shall receive a Financing Fee in
addition to the Financial Advisory Fee and any other fee to be received pursuant
to this Agreement, which shall be mutually determined between the Company and
the Financial Advisor at the time of any such Financing.
6. INDEMNIFICATION. In the performance of its services, the Financial
Advisor shall be obligated to act only in good faith, and shall not be liable to
the Company for errors in judgment not the result of willful misconduct. The
Company shall indemnify and hold harmless the Financial Advisor against any and
all liabilities, claims, lawsuits, including any and all awards and/or judgments
to which it may become subject under the Act, the Securities Exchange Act of
1934, as amended (the "1934 Act") or any other federal or state statute, at
common law or otherwise, insofar as said liabilities, claims and lawsuits
(including costs, expenses, awards and/or judgments) arise out of or are in
connection with the services rendered by the Financial Advisor or any
transactions in connection with this Agreement, except for any liabilities,
claims and lawsuits (including awards and/or judgments), arising out of illegal
acts, willful misconduct or willful omissions of the Financial Advisor. In
addition, the Company shall also indemnify and hold harmless the Financial
Advisor against any and all reasonable costs and expenses incurred relating to
the foregoing.
The Financial Advisor shall give the Company prompt notice of any such
liability, claim or lawsuit which the Financial Advisor contends is the subject
matter of the Company's indemnification and the Company thereupon shall be
granted the right to take any and all necessary and proper action, at its sole
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cost and expense, with respect to such liability, claim and lawsuit, including
the right to settle, compromise and dispose of such liability, claim or lawsuit,
excepting therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
The Financial Advisor shall indemnify and hold the Company harmless
against any and all liabilities, claims and lawsuits, including any and all
awards and/or judgments to which it may become subject under the Act, the 1934
Act or any other federal or state statute, at common law or otherwise, insofar
as said liabilities, claims and lawsuits (including costs, expenses, awards
and/or judgments) arising out of or are based upon illegal acts, willful
misconduct or willful omissions of the Financial Advisor. In addition, the
Financial Advisor shall also indemnify and hold the Company harmless against any
and all reasonable costs and expenses incurred relating to the foregoing.
The Company shall give the Financial Advisor prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
the Financial Advisor's indemnification and the Financial Advisor thereupon
shall be granted the right to take any and all necessary and proper action, at
its sole cost and expense, with respect to such liability, claim and lawsuit,
including the right to settle, compromise or dispose of such liability, claim or
lawsuit, excepting therefrom any and all proceedings or hearings before any
regulatory bodies and/or authorities.
7. THE FINANCIAL ADVISOR AS AN INDEPENDENT CONTRACTOR. The Financial
Advisor shall perform its services hereunder as an independent contractor and
not as an employee of the Company or an affiliate thereof. It is expressly
understood and agreed to by the parties hereto that the Financial Advisor shall
have no authority to act for, represent or bind the Company or any affiliate
thereof in any manner, except as may be agreed to expressly by the Company in
writing from time to time.
8. MISCELLANEOUS.
(a) This Agreement between the Company and the Financial Advisor
constitutes the entire agreement and understanding of the parties hereto, and
supersedes any and all previous agreements and understandings, whether oral or
written, between the parties with respect to the matters set forth herein.
(b) Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if hand-delivered or sent
postage prepaid by certified or registered mail, return receipt requested, to
the respective parties as set forth below, or to such other address as either
party may notify the other in writing:
If to the Company: Xxxx Love, President
Corpas Investments, Inc.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
If to the Financial Advisor: Xxxx X. Xxxxxxxxx, President
South Shore Investments, Ltd. Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
(c) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors, legal
representatives and assigns.
(d) This Agreement may be executed in any number of counterparts, each
of which together shall constitute one and the same original document.
(e) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(f) This Agreement shall be construed in accordance with and governed
by the laws of the State of Florida, without giving effect to conflict of law
principles. The parties hereby agree that any dispute which may arise between
them arising out of or in connection with this Agreement shall be adjudicated
before a court located in Palm Beach County, Florida, and they hereby submit to
the exclusive jurisdiction of the courts of the State of Florida located in Palm
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Beach County, Florida and of the federal courts in the Southern District of
Florida with respect to any action or legal proceeding commenced by any party,
and irrevocably waive any objection they now or hereafter may have respecting
the venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or arising out of
this Agreement, and consent to the service of process in any such action or
legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth in sub-paragraph (b) above.
(g) This Agreement has been duly authorized, executed and delivered by
and on behalf of the Company and the Financial Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
Very truly yours,
CORPAS INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
South Shore Investments LTD INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
President
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