February 27, 1998
Xx. Xxxxxx Xxxxxxx
President
Transnational Financial Corporation
000 Xxxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Dear Xxxxxx:
This letter ("agreement") is to set forth the terms for our working with
Transnational Financial Corporation (the "Company") in it strategic decision to
pursue an initial public offering (IPO") and to secure additional short term
capital. This agreement will also encompass the work to-date performed by
Financial Capital Resources in it's support of the Company as the Company
pursues it's goals and objectives.
SCOPE OF WORK
This agreement covers without limitation, the search for an underwriter to
undertake the initial public offering; the strategic planning associated with
the IPO; co-ordination and oversight of IPO process including legal, accounting
and operational issues; review of legal documents prepared by legal counsel;
drafting of stock offering prospectus; assistance of additional short term
capital through suggestion of personal loan guaranteed by stock of company;
introduction and assistance with Insouth to secure short term loan and continued
involvement until completion of IPO.
EXPENSES
FCR shall be responsible for all out-to-pocket expenses incurred during the
course of this engagement except that FCR shall be reimbursed for all airfare
and hotel expense incurred on behalf of the Company. These expenses will be
billed on a monthly basis and will be due and payable within five days of
receipt by Company.
FEES
Our fees for the scope of work as presented will be the sum of the following:
1)
an amount equal to three quarters of one percent (3/4%) of the
Company's stock, which in the event that the IPO fails to
close, will be returned by FCR to the Company.
(the stock calculation will be based on the Company's existing
stock base prior to the IPO conversion rate)
2)
an amount of $75,000 to be paid from the proceeds of the IPO.
This amount is to be paid to FCR within two days of the
Company receiving the IPO proceeds.
3)
an amount of $25,000 on the earlier of the funding of the
subordinate debt or March 15, 1998.
If for any reason the IPO does not close, in addition to the payments under item
three above, FCR will be entitled to an additional cash payment of $25,000 on
July 31, 1998.
I have really enjoyed working with you during the last three years and am
looking forward to a successful completion of the IPO which will give you the
capital base to originate $1.5 billion in loans per annum.
Sincerely,
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
President
ACCEPTED AND AGREED TO:
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Transnational Financial Corporation
