[LOGO] ATLAS CAPITAL SERVICES, INC.
July 30, 2001
BY FACSIMILE
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Mr. Xxxxxxx Xxxxxxxx
Chairman and CEO
Xxxxxxxx.xxx, Inc.
00 Xxxxxxxx Xxxx
Xxxxxx, Xxxx. 00000
Re: Investment Banking/Advisory Agreement.
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Dear Xxxx:
This will confirm the basis upon which Book Tech, Inc. and its affiliates
(the "COMPANY") has engaged Atlas Capital Services, Inc. ("ATLAS") on an
exclusive basis, to provide advisory and investment banking services with
respect to the exploration of strategic alternatives (i) that may lead to a
possible transaction ("TRANSACTION"), through (x) an investment in the Company
("INVESTMENT"), or (y) a sale, merger, joint venture or otherwise, whether
effected in a single transaction or a series of related transactions, in which
50% or more of the voting power of the Company or all or a substantial portion
of its business or assets are combined with or transferred to another company
(excluding reincorporations) ("MERGER"), or (ii) the restructuring of the
Company's activities ("RESTRUCTURING").
1. Services to be Rendered. Atlas agrees to perform and provide such of the
following financial advisory and investment banking services as the Company
reasonably and specifically requests:
1.1 RESTRUCTURING SERVICES. With respect to Restructuring activities,
Atlas shall:
A. familiarize itself to the extent it deems appropriate and feasible
with the business, operations, properties, financial condition and
prospects of the Company.
B. advise the Company regarding company operations, staffing,
strategy, and other issues related to building shareholder value consistent
with the provisions of this proposal;
C. assist the Company in determining which employees/officers of the
Company, if any, are necessary in order to, amongst others, maintain
business operations, collect the outstanding account receivables, maintain
relationships with creditors of the Company so that work-outs and
settlements can be reached, and file timely reports with the Securities and
Exchange Commission.
D. recommend and introduce various third-party consultants to the
Company who can assist management in the Restructuring of the Company's
activities;
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
E. assist the Company in preparing a plan of operation to settle
and/or reduce the outstanding liabilities of the Company's subsidiary and
to collect all of the subsidiary's outstanding accounts receivables; and
F. advise the Company's management in general corporate finance and
restructuring.
1.2 RAISING FUNDS. With respect to Investment services, Atlas shall
use its best efforts to raise the Company funds, in a single or series of
transactions, via debt or equity instruments.
1.3 MERGER. Concomitantly with its Restructuring services and
financing activities, Atlas shall begin to:
A. identify and evaluating private companies that may want to engage
in a Merger transaction with the Company;
B. contact potential Merger candidates which Atlas and the Company
believe to be appropriate for a potential Merger;
C. advise and assist the Company in considering the desirability of
effecting a transaction, and, if the Company believes such a transaction to
be desirable, in developing a general negotiating strategy for
accomplishing a transaction; and
D. advise and assist the Company in the course of its negotiation of a
transaction and will participate in such negotiations.
1.4 In rendering such services, Atlas will meet with representatives
of such Candidates, as are approved in advance by the Company, and provide
such representatives with such information about the Company as may be
appropriate, subject to customary business confidentiality.
2. BEST EFFORTS. Atlas agrees to devote such time and effort to the affairs
of the Company as is reasonable and adequate to render the Services contemplated
by this agreement. The Company understands and agrees that Atlas shall not be
responsible for the performance of any services which may be rendered hereunder
without the Company providing the necessary information in writing prior
thereto, nor shall Atlas include any services that constitute the rendering of
any legal opinions or performance of work that is in the ordinary purview of the
Certified Public Accountant. Atlas does not guarantee results on behalf of the
Company, but shall pursue all reasonable avenues available through its network
of contacts. At such time as an interest is expressed by a third party in the
Company's needs, Atlas shall notify the Company and advise it as to the source
of such interest and any terms and conditions of such interest. The acceptance
and consumption of any transaction shall be subject to acceptance of the terms
and conditions by the Company in its sole discretion.
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
3. INFORMATION.
3.1 The Company shall furnish Atlas such information as Atlas
reasonably requests in connection with the performance of its services
hereunder (all such information so furnished is referred to herein as the
"Information"). The Company understands and agrees that Atlas, in
performing its services hereunder, will use and rely upon the Information
as well as publicly available information regarding the Company and any
potential partners and that Atlas shall not assume responsibility for
independent verification of any information, whether publicly available or
otherwise furnished to it, concerning the Company or any potential partner,
including, without limitation, any financial information, forecasts or
projections, considered by Atlas in connection with the rendering of its
services. Accordingly, Atlas shall be entitled to assume and rely upon the
accuracy and completeness of all such information and is not required to
conduct a physical inspection of any of the properties or assets, or to
prepare or obtain any independent evaluation or appraisal of any of the
assets or liabilities, of the Company or any potential partner. With
respect to any financial forecasts and projections made available to Atlas
by the Company or any potential partners and used by Atlas in its analysis,
Atlas shall be entitled to assume that such forecasts and projections have
been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the management of the Company or any potential
partner, as the case may be, as to the matters covered thereby.
3.2 In connection with the services described in this Section 1, the
Company hereby authorizes Atlas, as the Company's representative, to
transmit the Memorandum to potential parties to a Transaction and execute
on behalf of the Company a confidentiality agreement, in form approved by
the Company, to be entered into by such parties. The Company hereby
acknowledges that all information contained in the Memorandum will be
provided by or based upon information provided by the Company or third
parties, and that the Company will be solely responsible for the contents
thereof. Atlas hereby agrees to obtain the consent of the Company prior to
contacting any potential party to a Transaction.
4. TIMELY APPRAISALS. The Company hereby agrees to use its commercially
reasonable efforts to keep Atlas up to date and apprised of all business, market
and legal developments related to the Company and its operations and management.
Accordingly:
(i) the Company shall provide Atlas with copies of all amendments,
revisions and changes to its business and marketing plans, bylaws, articles
of incorporation, private placement memoranda, key contracts, employment
and consulting agreements and other operational agreements;
(ii) the Company shall promptly notify Atlas of all new contracts
agreements, joint ventures or filings with any state, federal or local
administrative agency, including without limitation the SEC, NASD or any
state agency, and shall provide all related documents, including copies of
the exact documents filed, to Atlas, including without limitation, all
annual reports, quarterly reports and notices of change of events, and
registration statements filed with the SEC and any state agency, directly
to Atlas;
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
(iii) the Company shall also provide directly to Atlas current
financial statements, including balance sheets, income statements, cash
flows and all other documents provided or generated by the Company in the
normal course of its business and requested by Atlas from time to time; and
(iv) Atlas shall keep all documents and information supplied to it
hereunder confidential.
5. TRANSACTION FEES. In consideration of Atlas's services, Atlas shall be
entitled to receive, and the Company hereby agrees to pay to Atlas, the
following:
5.1 RESTRUCTURING SERVICES. In consideration of Atlas' Restructuring
services, Atlas shall receive shares of common stock of the Company, equal
to 4.99% of the outstanding common stock of the Company. The Shares shall
be issued upon execution of this investment banking agreement. The parties
shall execute a Registration Rights Agreement that shall include customary
demand and piggyback registration rights.
5.2 FINANCING.
5.2.1 CASH FEE. In the event of an Investment in the Company, the
Company shall pay Atlas a cash fee by certified check or wire transfer
equal to 10% of the principal amount of the Transaction Amount (as defined
below), and shall be paid as proceeds are received by the Company from each
Transaction. Any portion of Atlas's Transaction Fee that is attributable to
proceeds to be received by the Company upon the occurrence of a future
event, or the satisfaction of a contingency shall be paid when the event
occurs or the contingency is satisfied.
5.2.2 WARRANTS. In addition to the foregoing, upon consummation of an
Investment, the Company will issue to Atlas and/or its designee(s) warrants
(the "Warrants") to purchase such number of shares of the Company's common
stock as shall be equal to 10% of the aggregate number of fully diluted
and/or exercised or converted shares of common stock of the Company as are
purchased by the Candidates. The Warrants shall be purchased for a nominal
sum and shall be exercisable for a period of five years from the date of
closing with an exercise price equal to the effective per share or unit
price paid by the Candidates engaging in the Transaction. The terms of the
Warrants shall be set forth in one or more agreements (the "Warrant
Agreements") in form and substance reasonably satisfactory to Atlas and the
Company. The Warrant Agreements shall contain customary terms, including
without limitation, provisions for "cashless" exercise, change of control,
weighted-average price based anti-dilution, and customary demand and
piggyback registration rights consistent with the registration rights
granted to the Candidates.
5.3 MERGER. In the event a Merger occurs, Atlas shall receive shares
of common stock of the Company equal to 5% of the outstanding common stock
of the Company (Post Merger). The parties shall execute a Registration
Rights Agreement that shall include customary demand and piggyback
registration rights.
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
5.4 DEFINITION OF TRANSACTION AMOUNT. As used herein, the term
Transaction Amount" shall mean the gross amount of all consideration,
including without limitation to, all cash, cash equivalents, stock,
warrants, and/or assets that is exchanged or provided to or by the Company
or its shareholders, affiliates, or subsidiaries in a Transaction, or any
entities formed in or which results from a Transaction. The Transaction
amount shall be cumulative (e.g., if the Company receives initial
consideration and then subsequently received royalty and/or licensing fees,
warrant exercise funds, etc,.) such that the Transaction Amount shall
include all such consideration.
6. EXPENSES. In addition to any fees that may be payable to Atlas hereunder
and regardless of whether any Transaction is proposed or consummated, the
Company hereby agrees, from time to time upon request, to reimburse Atlas for
all reasonable fees and disbursements of Atlas's counsel, if any, and all of
Atlas's reasonable travel and other out-of-pocket expenses incurred in
connection with any actual or proposed Transaction or Restructuring services
arising out of Atlas's engagement hereunder. Any fees and/or disbursements
individually or in the aggregate in excess of $10,000.00 must be approved in
advance by the written consent of the Company.
7. INDEMNITY. The Company hereby agrees to indemnify Atlas under its
standard indemnification provisions, a copy of which is attached hereto as
Exhibit A, a made a part hereof.
8. TERMINATION OF ENGAGEMENT. Atlas's engagement shall be for a period of
three (3) months ("Term"). Thereafter, the agreement may be terminated by either
the Company or Atlas at any time, with or without cause, upon written notice to
that effect to the other party; provided, however, that: Atlas's Transaction Fee
shall have been earned and shall be payable to Atlas upon consummation of any
Transaction which occurs as a result of this Agreement with any Entity in which
a Transaction was made in whole or in part (1) during the term of this Agreement
(hereafter "Phase I"); or, (2) within 24 months following the termination date
of this Agreement (hereafter "Phase II") with regard to an Entity which Atlas or
the Company has had any communications during Phase I.
9. RELIANCE ON OTHERS. The Company confirms that it will rely on its own
counsel, accountants and other similar expert advisors for legal, accounting,
tax and other similar advice.
10. AFFILIATE SERVICES. In connection with the services contemplated by
this agreement, and in addition to the consultants referenced in Section 1.1
above, Atlas may utilize or engage, on an "as needed" basis, the services of
personnel who are employees of The Atlas Group of Companies, LLC or its
affiliates.
11. PUBLICITY. The Company agrees that Atlas shall have the right, at its
own cost, to advertise its participation in the Transaction in "tombstone" or
other appropriate financial advertisements in newspapers, magazines, trade
periodicals or other publications. Atlas agrees that the content of such
tombstone or other advertisements shall not be published without the Company's
prior approval, provided that such approval is not unreasonably withheld or
delayed.
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
12. NO RIGHTS IN SHAREHOLDERS, ETC. The Company recognizes that Atlas has
been engaged only by the Company, and that the Company's engagement of Atlas is
not deemed to be on behalf of and is not intended to confer rights upon any
shareholder, partner or other owner of the Company or any other person not a
party hereto as against Atlas or any of its affiliates or any of their
respective directors, officers, agents, employees or representatives. Unless
otherwise expressly agreed, no one other than the Company is authorized to rely
upon the Company's engagement of Atlas or any statements, advice, opinions or
conduct by Atlas. Without limiting the foregoing, any opinions or advice
rendered to the Company's Board of Directors or management in the course of the
Company's engagement of Atlas are for the purpose of assisting the Board or
management, as the case may be, in evaluating the Transaction and do not
constitute a recommendation to any shareholder of the Company concerning action
that such shareholder might or should take in connection with the Transaction.
Atlas's role herein is that of an independent contractor; nothing herein is
intended to create or shall be construed as creating a fiduciary relationship
between the Company and Atlas.
13. GOVERNING LAW; FORUM. This agreement shall be governed by the laws of
the State of New York. Any and all claims, disputes, or controversies arising
out of this Agreement will be resolved by arbitration before the American
Arbitration Association ("AAA") and that with respect to this Agreement, a party
may seek injunctive relief and ancillary damages before the AAA. Each party
irrevocably consents to subject matter jurisdiction before the AAA. The parties
shall restrict themselves to claims for compensatory damages and no claims shall
be made by any party for punitive or similar damages. The parties agree that any
award or decision by the AAA shall be final and binding upon the parties and a
judgment may be entered in a court of competent jurisdiction upon such award or
decision. The parties agree that the situs of any arbitration or legal
proceedings hereunder shall be the City of New York.
14. MISCELLANEOUS. In order to better coordinate the activities of Atlas
contemplated by this letter, both the Company (including management or other
officers and directors of the Company) and Atlas will promptly inform the other
of inquiries of third parties which it receives concerning a Transaction.
Nothing in this Agreement is intended to obligate or commit Atlas or any of its
affiliates to provide any services other than as set out above. This Agreement
may be executed in two or more counterparts, all of which together shall be
considered a single instrument. This Agreement constitutes the entire agreement,
and supersedes all prior agreements and understandings (both written and oral)
of the parties hereto with respect to the subject matter hereof, and cannot be
amended or otherwise modified except in writing executed by the parties hereto.
The provisions hereof shall inure to the benefit of and be binding upon the
successors and assigns of the Company. Neither party may assign its obligations
or rights pursuant to this Agreement without the prior written consent of the
other party.
15. NOTICES. All notices and other communications hereunder shall be deemed
given upon (a) the sender's confirmation of receipt of a facsimile transmission
to the recipient's facsimile number set forth below, (b) confirmed delivery by a
standard overnight carrier to the recipient's address set forth below, or (c)
delivery by hand to the recipient's address set forth below (or, in each case,
to or at such other facsimile number or address for a party as such party may
specify by notice given in accordance with this Section 15):
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
(a) If to the Company, to:
Mr. Xxxxxxx Xxxxxxxx
Chief Executive Officer
Xxxxxxxx.xxx, Inc.
00 Xxxxxxxx Xxxx
Xxxxxx, Xxxx. 00000
Fax: (000) 000-0000
(b) If to Atlas, to:
Xxxxx Xxxxxxxxxx
Executive Vice-President
Atlas Capital Services,
Inc. 000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If you are in agreement with the foregoing, please sign and return the
attached copy of this agreement, whereupon this agreement shall become effective
as of the date hereof.
Sincerely,
ATLAS CAPITAL SERVICES, INC.
By: ____________________________
Xxxxx Xxxxxxxxxx
Executive Vice-President
Accepted and Agreed to this _____ day of July, 2001:
XXXXXXXX.XXX, INC.
By: __________________________
Name:
Title:
c.c.: Joel Xxxxxxxx--xxxx@xxxx.xxx; xxxxxxxxxxxx@xxxx.xxx
Ajmal Xxxx--xxxxx@xxxxxxxxxxxxxxxxxx.xxx
William Xxxxxx--xxxxxxx@xxxxxxxx.xxx
000 Xxxxxxxx Xxxxx 000 Xxx Xxxx, XX 00000 U.S.A
Phone: (000) 000-0000 Fax: (000) 000-0000
