EXHIBIT 10.20
FINANCIAL CONSULTING AGREEMENT
Xx. Xxxxx Xxxxx
President
Famous Fixins Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxx,
This Financial Consulting Agreement (the "Agreement") is made and
entered into as of the 9th day of September 1999, by and among Famous Fixins
Inc. ("the Company") and First Atlanta Securities, LLC ("FAS"). The Company
hereby retains FAS for the purpose of providing to the Company financial
consulting services as enumerated herein, and FAS agrees to be retained to
provide such services, pursuant to the terms and conditions set forth herein.
1. Term. The term of this Agreement will be one year commencing as of
September 9 1999. This Agreement may be cancelled upon thirty (30) days
written notice by either party.
2. Financial Consulting Services. During the term hereof, FAS agrees to
provide financial consulting services to the Company in the form of: (i)
evaluating the Company's capital 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
securities; and (iv) bringing to the attention of the Company possible
business opportunities and evaluating business opportunities generally,
whether or not such opportunities are originated by FAS or others. Such
services will be available to the Company upon written request made to FAS by
the President of the Company. FAS agrees to devote such time, attention, and
energy as may be necessary to respond to proper requests by the Company for
services hereunder. Nothing herein shall be construed, however, to require
FAS to provide a minimum number of hours of service to the Company or to limit
the right of FAS to perform similar services for the benefit of persons
or entities other than the Company.
3. Compensation. As compensation for FAS's services hereunder, the
Company will pay to FAS a cash fee equal to ten percent (10%) of the
aggregate purchase price of the Securities purchased by or through any
investor or intermediary identified to the Company by FAS in Addendum A
hereto, which Addendum may be revised from time to time during the term of
this Agreement, less the amount of any finder's fee payable by the Company to
such intermediaries in connection with the sale of the Securities. The
Company shall pay each cash fee owed to FAS hereunder upon the closing of the
transaction for which the cash fee is earned, and it shall and hereby does
authorize the escrow agent for each such transaction to deduct from the
aggregate purchase price of the Securities the entire amount of all cash fees
so owed and to pay that amount directly to FAS upon the closing of the
transaction. The Company shall also cause the escrow agreement to require for
the breaking of escrow the consent of FAS, whose consent shall be on its own
behalf and in its own interest only, and not on behalf of or as
representative or agent for any purchase or other party.
In addition, the Company shall issue to FAS a warrant entitling FAS or its
designees to purchase 100,000 shares, subject to adjustment (the "Warrant"),
of the Company's Common Stock, exercisable at $1.00 per share (the "Common
Stock"). The Company agrees to register the common shares underlying the
warrant, on the same registration statement that the Company will be filing
on behalf of the investors. The registration statement may be filed on any
form the Company's counsel deems appropriate. The expense of such filings
shall be borne by the Company. The Warrant shall be exercisable at any time
after the first date after which the bid price per one share of Common Stock
quoted on any securities exchange or any NASDAQ system has exceeded $1.00.
The Warrant shall expire 5 years from the date hereof. All compensation
provided from this agreement is subject to adjustment so that no rule or
applicable law is contravened, is which such compensation shall be adjusted
so as not to contravene such rule, regulation or law.
4. Finder's Fee/Mergers & Acquisitions. In addition to the compensation
and expenses paid or payable to FAS pursuant to Paragraphs 3 and 6, the
Company agrees that, if FAS, directly or indirectly, introduces the Company,
during the term of this Agreement, to any person or entity that during the
term hereof or within six months following the term hereof, 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 FAS a
finder's fee paid in cash.
Each finder's fee payable to FAS under this Agreement shall be
calculated as a percentage of the Transaction Value (as defined herein) in
accordance with the following scale:
5% on the first $5,000,000
4% on the amount from $5,000,001 to $6,000,000
3% on the amount from $6,000,001 to $7,000,000
2% on the amount from $7,000,001 to $8,000,000
1% on the amount above $8,000,000
"Transaction Value" shall mean the aggregate value of all cash,
securities 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 capital, loan or any other equity or
debt financing for, or acquisition of, the Company or 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 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 FAS and the Company, or by an
independent appraiser jointly selected by FAS and the Company.
5. Right of First Refusal. During the term of this Agreement, FAS shall
have a right of first refusal to manage any private placement of securities
by or for the Company, any affiliate of the Company or any future affiliate
or subsidiary of the Company, provided, however, that FAS offers terms
comparable to any other placement agent. In addition, FAS shall have a
right of first refusal to manage any private placement of securities by or
for the Company, any affiliate of the Company or any future affiliate or
subsidiary of the Company for a period of six (6) months commencing on the
date of any transaction giving rise to the payment of a fee pursuant to
Paragraph 4 above, provided, however, that FAS offers terms comparable to any
other placement agent.
6. Retainer & Expenses. The Company shall pay to FAS, upon the
execution of this agreement, a non-refundable retainer of $25,000.00. The
retainer shall be paid in capital stock of the company. These shares shall
be issued based upon the closing bid price for the shares of the company on
the date the engagement agreement is signed. The shares shall be included
for registration with the next registration statement the company effects not
including the one already filed. The retainer will be used by FAS for all
out of pocket expenses related to the contemplated financing, as well as for
all out of pocket expenses relating to travel for due-diligence purposes (for
Capital Markets and Research employees). The retainer will be deducted from
the cash fees earned upon the completion of the financing contemplated
herein.
7. Independent Contractor. FAS and the Company hereby acknowledge that
FAS is an independent contractor. FAS 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, FAS shall take
no action which binds, or purports to bind, the Company.
8. Liability of FAS. The Company acknowledges that all opinions and
advice, whether oral or written, given by FAS to the Company in connection
with this Agreement are intended solely for the benefit and use of the
Company in considering the transaction to which they relate, and the Company
agrees that no person or entity other than the Company shall be entitled to
make use of or rely upon the advice of FAS to be given hereunder, and no such
opinion or advice shall be used by the Company for any other purpose or
reproduced, disseminated, quoted or referred to by the Company in
communications with third parties at any time, in any manner or for any
purpose, nor may the Company make any public references to FAS or use FAS's
name in any annual report or any other report or release of the Company
without FAS's prior written consent, except that the Company may, without
FAS's further consent, disclose this Agreement (but not information provided
to the Company by FAS) 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 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 indicated respectively below, or at such other
addresses as the parties to be noticed may from time to time by like notice
hereafter specify:
If to the Company: Famous Fixins, Inc.
000 X. 00xx Xx. #0000
XX, XX 00000
If to FAS: First Atlanta Securities, LLC
0000 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxx. 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
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 FAS and the Company shall
survive the termination of this agreement.
12. Governing Law. This Agreement shall be construed according to the laws
of the State of New York and subject to the jurisdiction of the courts of
said state, without application of the principles of conflicts of laws.
13. Successors. This Agreement shall be binding upon the parties, their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed or caused these
presents to be executed as of the day and year first above written.
FAMOUS FIXINS INC.
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
----------------------------
Title: President
---------------------------
FIRST ATLANTA SECURITIES, LLC
By: /s/ Xxxxxxx x. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President of
Capital Markets
ADDENDUM A
to
Finder's Agreement between
Famous Fixins Inc. and First Atlanta Securities, Inc.
Dated September 9, 1999
Prepared by Xxxxxxx X. Xxxxxx
as of _________, 1999
