December 26, 2000
VIA FACSIMILE (000) 000-0000
Xxxxx Xxxxxx
SHC Corp.
000 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxx Xxxxxx, XX 00000
Re: Xxxxxx & Xxxxx, Ltd. Invoices
Dear Xxxxx:
As you know, our retainer agreement with SHC Corp. (the "Company") provides
for the Company's payment of our invoices in a combination of cash and SHC
stock. Up until April 30, 2000, the agreement provided that one-half of each
monthly invoice would be payable in cash, and the other one-half would be
payable in stock. From and after May 1, 2000, the agreement provides that 85% of
each monthly invoice is payable in cash, and 15% is payable in stock. In either
case, the stock is to be valued by reference to the average of the Company's
closing stock price for the immediately prior thirty (30) days, less a discount
of 25%.
As of today's date, both cash and stock payments due us remain outstanding
and delinquent. With respect to the stock payments, the last payment made was in
payment of the January, 2000 invoice. Therefore, we are owed shares based on all
of our invoices from February, 2000 through our November, 2000 invoice.
The reason why the stock payments are delinquent is a simple one: the
Company does not have any shares available to issue. As of today's date, the
Company is authorized to issue 100,000,000 shares of which, according to the
Company's stock transfer agent, more than 99,400,000 shares are outstanding. As
an accommodation to the Company, we have refrained since January from issuing
shares to this firm until such time as the Company increases the number of
shares it is authorized to issue, which we anticipate will occur at the
Company's shareholder meeting on January 19, 2001.
In consideration of this accommodation, we would like to make two (2)
changes relating to the retainer agreement. First, we would like to amend the
effective date of the change from a 50/50 percentage split between cash and
stock to the 85/15 percentage split from May 1, 2000 to December 1, 2000.
Second, we would like to issue all of the shares due (i.e. from the February 1,
2000 invoice through the November 2000 invoice)
Xxxxx Xxxxxx
December 26, 2000
Page Two
at a price of $.03 per share, subject to the anticipated increase in the number
of authorized shares. We feel this appropriate for three reasons: (i) we have
waited for the shares to be issued for a significant period of time, (ii) the
trading price of the Company's stock has consistently been in the $.03 - $.05
range and (iii) the Company has recently raised equity capital at $.03 and plans
on raising additional equity capital at that price in the near future.
Assuming you are agreeable, the Company would, upon the increase of its
authorized shares, issue to us 3,345,605 shares of common stock. Those shares
would represent payment of 50% of our invoices from February 2000 through
November 2000. We would then resume our written arrangement starting with the
December invoice, i.e. shares would be issued at the average closing price for
the prior 30 days, less a discount of 25%.
Please indicate your agreement with and acceptance of these terms by
signing where indicated below. Feel free to call with any questions.
Sincerely,
Xxxxxx Xxxxxxxxx
Agreed and Accepted December 26, 2000
SHC Corp.
By: /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, President and Director
cc: Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxx
