EXHIBIT 10.36
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INTERNATIONAL CAPITAL GROWTH, LTD.
December 16, 1997
Xx. Xxxxx Xxxxxx
First American Railways, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Dear Xxxxx:
This will confirm our agreement that International Capital Growth, Ltd., a
Delaware corporation ("ICG"), shall render its services to First American
Railways, Inc. ("First American" or the "Company") as its exclusive financial
advisor and exclusive investment banker regarding the Company's intention to
issue securities on a private basis (the "Financing").
1. SALE OF SECURITIES. As soon as practicable after preparation of suitable
offering materials, ICG shall use its best efforts to arrange a sale by the
Company of the Investment Units to investors, pursuant to both Regulation S
("Regulation S") and Regulation D ("Regulation D") issued under the
Securities At of 1933, as amended (the "Act"), ready, willing, and able to
purchase the Investment Units.
2. PLACEMENT FEES. The Company shall pay ICG as compensation for its services
10% of the gross proceeds received by the Company from the financing. In
addition, the company will pay ICG 5% of all debt, or other obligations
converted to or payable in stock arranged by ICG. Further, as compensation
for both its fundraising and management services the Company shall (i) issue
to ICG and/or its designess 750,000 shares of Common Stock; (ii) 25,000
sub-placement warrants for each $1.0 million raised, exercisable at the
financing price for a period of 24 months, and (iii) extend the term of the
original sub-placement agent warrants or reissue them for a term of 24 months
from their expiration in April 1998 and reduce the exercise price to $1.00.
The Company shall pay the cash and warrant placement fees due to ICG upon
each closing and the Common Stock fees on the initial closing.
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December 16, 1997
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3. COOPERATION. The Company and ICG shall cooperate with one another fully in
order to consummate the issuance and sale of the securities contemplated
herein as expeditiously as practicable. In particular, the Company will
prepare such offering materials as ICG may reasonably request.
Further, on a monthly basis, The Company will provide to ICG financial
information, the form and substance to be agreed upon in the future, but to
include cash position and cash outflows in the previous month.
4. REGISTRATION. By September 30, 1998, the Company shall file or amend one or
more Registration Statements relating to all shares (including placement and
management fee shares to be issued in connection with the Financing) and will
thereafter use its best efforts to obtain (by September 30, 1998) and
maintain the effectiveness of the Registration Statement to become effective
under the Act until January 31, 1999. The costs and expenses associated with
the preparation, filing and the prosecution of such registration statement
shall be borne by the Company.
5. EXPENSES. The Company agrees to pay ICG, on each closing, an expense
allowance on a non-accountable basis equal to two percent (2%) of the gross
proceeds derived from any placement. In addition, ICG's legal fees (up to a
maximum of $35,000) and expenses, as well as any Blue Sky legal fees (up to a
maximum of $10,000) and expenses of ICG associated therewith shall be paid by
the Company.
6. CONFIDENTIALITY. ICG will not disclose to any other person, firm or
corporation, nor use for its own benefit during or after the term of this
agreement, any trade secrets or other information designated as confidential
by the Company which is acquired by ICG in the course of performing services
hereunder. (A trade secret is information not generally known to the trade
which gives the Company an advantage over its competitors. Trade secrets can
include, by way of example, products or services under development,
production methods and processes, sources of supply, customer lists,
marketing plans, and information concerning the filing or pendency of patent
applications.) Any financial advice rendered by ICG pursuant to this
agreement may not be disclosed publicly in any manner without the prior
written approval of ICG. At the conclusion of this engagement and upon
request by the Company, ICG shall return all material deemed confidential,
supplied by the Company.
7. INDEMNIFICATION. The Company hereby agrees to indemnify, defend and hold
harmless ICG and its affiliates, the respective directors, officers, agents
and
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December 16, 1997
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employees of ICG and its affiliates and each other person, if any,
controlling ICG or any of its affiliates from and against any losses claims,
damages or liabilities (or actions, including shareholder actions, in respect
thereof) incurred as a result of claims asserted by third parties related to
or arising out of the engagement of ICG by the Company pursuant to the terms
hereof or in connection therewith, and will reimburse ICG, and any other
party entitled to be indemnified hereunder for all expenses (including
attorneys fees) as they are incurred by ICG or any other indemnified party in
connection with investigating, preparing or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which ICG or any of its affiliates is a party. The Company will not, however,
be responsible for any claims, liabilities, losses damages or expenses which
have resulted from ICG's misconduct or negligence. The Company also agrees
that neither ICG, nor any of its affiliates, nor any person controlling ICG,
or any of its affiliates, shall have any liability to the Company for or in
connection with the engagement pursuant to the terms hereof, except for any
such liability for losses, claims, damages or expenses incurred by the
company that result from ICG's misconduct or negligence. The foregoing
agreement shall be in addition to any rights that ICG or any indemnified
party may have at a common law or otherwise, including, but not limited to,
any right to contribution. The Company hereby consents to personal
jurisdiction, services or process and venue in any court in which any claim
subject to this indemnification provision is brought against ICG or any other
indemnified party, only with respect to any other claim that may be made
against the Company. The obligation to indemnify ICG pursuant to the terms of
this paragraph shall survive and remain in full force and effect following
the completion of any transaction contemplated herein or the expiration or
termination of this agreement.
ICG hereby agrees to indemnify, defend and hold harmless the Company and its
affiliates, the respective directors, officers, agents and employees of the
Company and its affiliates and each other person, if any, controlling the
Company or any of its affiliates, from and against any losses, claims,
damages or liabilities (or actions, including shareholder actions, in respect
thereof) incurred as a result of claims asserted by third parties arising out
of misconduct or negligence of ICG in connection the engagement of ICG
hereunder, and ICG will reimburse the Company and any other party entitled to
be indemnified hereunder for all expenses (including attorneys fees) as they
are incurred by the Company, or any other indemnified party in connection
with investigating, preparing or defending any such action or claim, whether
or not in connection with pending or threatened litigation in which the
Company, or any of its affiliates is a party. ICG agrees that neither
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December 16, 1997
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the Company, nor any of its affiliates, nor any person controlling the
Company, or any of its affiliates, shall have any liability to any person for
or in connection with the engagement pursuant to the terms hereof, except for
any liability for losses, claims, damages, liabilities or expenses that
result from ICG's misconduct or negligence. The foregoing agreement shall be
in addition to any rights that any indemnified party may have at common law
or otherwise including, but not limited to, any right of contribution. ICG
hereby consents to personal jurisdiction, service of process and venue in any
court in which any claim subject to this indemnification provision is brought
against the Company, or any other indemnified party, only with respect to
such claims against the Company, or another indemnified party, and not with
respect to any other claim that may be brought against ICG. ICG's obligation
to indemnify the Company, and others pursuant to the terms of this paragraph
shall survive and remain in full force and effect following the completion of
any transaction contemplated herein or the expiration or termination of this
agreement.
8. OPERATING MATTERS. As soon as the appropriate candidates are identified
utilizing the Company's best efforts, the Company shall hire a
President/Chief Operating Officer for First American Railways, Inc. as well
as a new Director of Sales and Marketing for the Florida Fun-Train Division.
Further, the Company shall immediately make available one seat on its Board
of Directors to a representative of the investor group in the Financing. In
addition, the Company shall make an additional seat on its Board of Directors
available at its next shareholders meeting currently scheduled for June 1998
to an additional representative of the investor group.
9. GOVERNING LAW. This agreement shall be governed by the internal laws of the
State of Florida. Any dispute arising out of this agreement shall be
adjudicated in the courts of the State of Florida or in the federal courts
sitting in the State of Florida, and ICG hereby agrees that service of
process upon it by registered mail at the address shown in this agreement
shall be deemed adequate and lawful.
10.DUE AUTHORITY. The Company and ICG each represents to the other that it has
due authority to enter into this agreement and that the officer executing
this agreement has full authority to do so.
11.TERMINATION. Unless extended by mutual agreement of the Company and ICG,
this agreement and all liabilities and obligations hereunder (except as to
paragraphs 6 and 7) shall terminate on March 31, 1998.
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December 16, 1997
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It is understood and agreed that at such time as ICG and the Company shall
mutually agree as to the manner, term, conditions and other more specific
provisions of the sale of securities as contemplated herein, the Company and
ICG will execute and deliver definitive agreements, which agreements will
supersede and replace this agreement in relevant part. Such agreements will
set forth such representations, warranties, indemnification provisions,
closing conditions and other matters as are customary in such agreement.
If any legal action or other proceeding is brought in connection with the
interpretation or enforcement of any of the provisions of this agreement, the
prevailing party shall be entitled to recover its reasonable attorney's fees
and other costs incurred in an action or proceeding in addition to any other
relief to which the party may be entitled.
Please confirm that the foregoing correctly sets forth our understanding by
signing the enclosed copy of this letter where provided and returning it to
us at your earliest convenience.
Very truly yours,
INTERNATIONAL CAPITAL GROWTH, LTD.
By /S/ XXXX XXXXXX
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XXXX XXXXXX
Accepted and agreed to on this
17 day of December, 1997
FIRST AMERICAN RAILWAYS, INC.
By /S/ XXXXX X. XXXXXX
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XXXXX X. XXXXXX
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