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EXHIBIT 10.27
GREYSTONE CAPITAL, LTD.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
July 30, 1996
Xx. Xxxxxxxx X. Xxxxx
Xxxxxx Communications Corporation
00000 Xxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxx:
This letter shall set forth the agreement by and between Xxxxxx
Communications Corporation ("Xxxxxx") and Greystone Capital, Ltd. ("Greystone")
with respect to the private placement of Xxxxxx Securities.
1. Fee. In consideration of Greystone's efforts as a finder in this
transaction, Xxxxxx agrees to pay Greystone a fee in cash at the close, which
Greystone agrees to accept as its complete and final compensation for this
transaction, as follows:
(a) The fee shall be an amount equal to 3.5% of the "Gross
Funds" provided by the investors represented by Xxxxx Xxxxxxxxx, Esq., which
funds were transferred from the Xxxxx Xxxxxxxxx escrow to the escrow account at
City National Bank. The "Gross Funds" shall mean the amounts actually invested
by the investors before the deduction of the 3% fee paid to Venture Guarantee or
its affiliate, Select Capital Advisors, Inc. (For example, as of the date of
this letter, the City National Bank escrow has received funds from the Xxxxx
Xxxxxxxxx, Esq. escrow account in the amount of $2,580,200. This amount
reflected an actual investment by the investors of $2,660,000 before the
deduction of the 3.5% fee paid to Venture Guarantee. Therefore, under this
example, Greystone would be entitled to receive a finder's fee equal to 3.5% of
$2,660,000 or $93,100.) The parties agree that the final figure will be
calculated before the date of the close.
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July 30, 1996
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(b) Xxxxxx agrees that said fees will be paid to Greystone at
the close of the transaction directly from the escrow account at City National
Bank. In this regard, Xxxxxx agrees to provide to City National Bank at least
one day prior to the close an irrevocable instruction that the fee shall be paid
directly from the escrow account at closing to Greystone's account at City
National Bank (Acct #001121014).
2. Representations and Warranties of Greystone.
(a) Greystone hereby represents and warrants to Xxxxxx that:
(i) it is a corporation duly formed and validly existing under the laws of the
State of California, with full power and authority to enter into this letter
agreement and perform its obligations hereunder, (ii) all corporate action of
Greystone necessary to be taken with respect to the entering into of this letter
agreement and the performance of its obligations hereunder has been take, (iii)
when fully executed by all parties, this letter agreement will constitute a
legal, valid and binding instrument enforceable against Greystone in accordance
with its terms, subject to bankruptcy, insolvency and other similar laws
relating to the enforcement of creditors' rights generally.
(b) Neither the sale of the securities, nor the execution,
delivery or performance of this letter agreement will result in a breach,
violation or acceleration of, or constitute a default under, the terms of any
indenture or other agreement or instrument to which Greystone is a party or by
which it or its properties is bound or may be affected, that would materially
and adversely affect its ability to perform its obligations under this letter
agreement, or its ability to conduct its business as currently conducted.
(c) Any information provided in connection with the offering
and any amendment thereof or supplement thereto, delivered by Greystone or its
directors, officers, employees and agents in connection with the private
placement to Xxxxxx, as of their respective dates and as of the closing date,
did not and will not, include any untrue statement or a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) Greystone acknowledges and agrees that the offer and sale
of the securities is being made in reliance upon the exemption from the
registration requirements of Section 5 of the Securities Act of 1933 provided by
Regulation D and other administrative rules and regulations interpreting Section
4(2) of the Securities Act of 1933 and the exemptive provisions of applicable
securities laws. Greystone agrees not to violate Rule 502(c) prohibiting the use
of general solicitation or general advertising in connection herewith.
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July 30, 1996
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3. Indemnification. Greystone agrees to indemnify and hold harmless
Xxxxxx and any of its officers, directors, counsel, employees and agents
(collectively, "Indemnified Persons"), to the fullest extent lawful, from and
against all claims, liabilities, losses, damages and expenses (or actions in
respect thereto) to which such Indemnified Person may become subject related to
or arising out of a breach by Greystone of the terms of this letter agreement
(including its representations and warranties therein).
4. Confidentiality.
(a) Except with respect to prospective investors in the
financing after the execution hereof, each party agrees that, without the prior
written consent of the other party hereto, it and its officers, employees and
agents will not disclose to any other person that the evaluation material or the
financing documents have been made available hereunder or that discussions or
negotiations are taking place concerning a transaction between the parties
unless such disclosure is required by law, in which case the disclosing party or
its representatives shall give the other prior reasonable notice of such
disclosure. The term "Person" as used in this letter agreement shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership, individual or other entity.
(b) All written or other information of any kind or type,
disclosed, supplied or revealed by or received from Xxxxxx to or by Greystone
relating to the products, business plans, financial condition or business
relationships shall be considered the Xxxxxx' proprietary information (the
"Proprietary Information"), except to the extent that such information is within
the public domain at the time of Xxxxxx' disclosure to Greystone or subsequently
becomes in the public domain through no action or fault of Greystone.
(c) Greystone covenants and agrees that it shall not, at any
time during the term of this letter agreement and thereafter: (i) make any use
whatsoever of any of the Proprietary Information except as may be necessary to
perform this letter agreement, (ii) reproduce any of the Proprietary Information
in any manner except as may be necessary to perform this letter agreement, or
(iii) disclose any of the Proprietary Information except as may be necessary to
perform this letter agreement to any person or entity, all except as permitted
by Xxxxxx in writing.
5. Noncircumvention. Xxxxxx agrees that it will not circumvent
Greystone's relationship with Venture Guarantee, Select Capital Advisors, Inc.
or the investors provided by either of said parties (collectively, the
"Greystone Parties") for the purpose of arranging future equity of debt funding
for Xxxxxx for a period of one year. Xxxxxx agrees that the Greystone Parties
are proprietary to Greystone.
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July 30, 1996
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6. Governing Law; Attorney's Fees. This agreement shall be governed
under California law and in the event of a breach of this agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees and
costs.
Please confirm your agreement to the terms of this letter agreement by
signing a copy of this letter where indicated below and returning it to us by
fax.
Sincerely,
/s/ Xxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxxxxx
President
Agreed to and accepted this 31st day of July, 1996:
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx, Chief Financial
Officer
