1
[MAROON BELLS CAPITAL PARTNERS, INC. LETTERHEAD]
April 10, 2000
Xx. Xxxxx Xxxxxxx
Chairman
Boots & Xxxxx Group
000 Xxxx Xxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
RE: LETTER OF ENGAGEMENT
Dear Xxxxx:
This letter confirms the arrangement, under which MAROON BELLS CAPITAL,
INC. A DELAWARE CORPORATION, AND VENBANC, INC., A COLORADO CORPORATION,
(collectively - "MBVB"), is to be retained to act as the Primary, Financial
Advisor (FA) to BOOTS AND XXXXX GROUP (WEL) (the Company), a TEXAS Corporation;
for a period of 12 (TWELVE) MONTHS from today's date.
I) SCOPE OF THE WORK TO BE PERFORMED
As the Company's primary financial advisor, MBVB will use its best
efforts to provide financial consulting services to WEL, within the scope
of the following:
1. Facilitate an infusion of debt and/or equity, or some
combination or derivation thereof, into the Company; and more
specifically, the amount of $8,000,000. MBVB, will approach various
Investor Entities and/or Associates, with respect to the same.
Our responsibilities include reviewing and presenting the Company's
business plan, financial pro-formas, and/or Term Sheets, and generating
appropriate Investor Interest, and/or counter Term Sheets; developing
Investments interest on the Company's behalf; and negotiating and
arranging appropriate Investment deal point(s) scenarios for the Company,
from said Investor Entities, in the continuing effort to procure an
appropriate financing and/or investment capital for the Company.
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Xx. Xxxxx Xxxxxxx
Page 2
Letter of Engagement
II) COMPENSATION
Because of the uniqueness, complex nature, and the need for expediency
of the foregoing, the type of Investment and Securities to be
exchanged, the complexity of the deal(s) which are contemplated; MBVB
will be compensated in a 'Financial Advisory Fee' for its efforts, as
follows:
a) $8,000,000 Invested Amount, seven and one-half percent
"in kind", of the securities issued.
b) 1,600,000 success warrants, 5-year term, with an exercise
price of at market date of closing per share, per warrant;
with piggy-back registration rights, and based on pro-rata
investment.
c) In the event that additional investment interest presents
itself, related to the investment opportunity as herein
described, above the $8,000,000 as is set forth herein,
such interest would be shown the Company MBVB, and if
accepted by the company, MBVB would be entitled to
compensation on any additional invested monies, in the
amount of seven and one half percent or "in kind", of the
securities issued, and pro-rata success warrants, under
the same terms and conditions as stated in Paragraph B,
above.
Said compensation shall be due MBVB for any closing resulting from
MBVB's efforts as described in Paragraph 1, above, whether the closing
takes place during the term of this contract, or subsequent thereto, as
long as said investment was procured by or through MBVB, or it's
Agents, or Investor Entities.
o COMPANY'S OPTION - it is the intent of this letter that MBVB use
its best efforts to present said opportunity to and for the Company,
in a form that is acceptable to the Company. The Company, however
may reject any such opportunity at its discretion, with no liability
to MBVB, or the Company. Principals of MBVB may, or may not be
Investors in any such opportunities.
o OTHER PLACEMENT AGENTS - MBVB, may, in its discretion, use Placement
Agents and/or Licensed Broker/Dealers to aid in generating such
opportunities, and any Fees associated with such Agents would be
deducted from the Financial Advisory Fee due MBVB.
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Page 3
Letter of Engagement
It shall be the Company's obligation to bear all of its expenses in
connection with any transaction, including, but not limited to the
following; filing fees, and mailing costs with respect to the
transmission of the business plan or other offering, material,
registrar and transfer agent fees, legal counsel and accounting fees,
issue and transfer taxes, if any, and Blue Sky counsel fees and
expenses (if any).
The Company agrees that MBVB shall be entitled to rely upon all reports
of the Company and/or information supplied to it by or on behalf of the
Company (whether written or oral), and MBVB shall not in any respect be
responsible for the accuracy or completeness of any such report or
information or for any obligation to verify the same, regardless of the
extent to which MBVB may have conducted an independent investigation.
Subject to applicable law, no advice given by MBVB in connection with
the services rendered by MBVB hereunder will be quoted, nor will any
such advice or the name of MBVB be referred to, in any report,
document, release or other communication, whether written (including
without limitation, the Company business plan) oral, prepared, issued
or transmitted by the Company or any affiliate, director, officer,
employee, agent or representative of any thereof, without, in each
instance, MBVB's prior consent.
The Company further represents, warrants, and agrees that (a) it is
authorized to enter into this agreement and to carry out the
transaction contemplated hereunder, and (b) this agreement constitutes
a "valid and binding obligation" of the Company.
In consideration of our agreement to act as the non-exclusive agent of
the Company, in connection with the private placement, you agree to indemnify
and hold harmless MBVB, each of our partners, officers, employees and agents,
and any person controlling our firm (each of MBVB), against any and all losses,
claims, damages or liabilities, joint or several, to which they may become
subject under any statute or at common law or otherwise, insofar as such losses,
claims, damages, liabilities, settlements, actions or proceedings are caused by
the release of information about the proposed financing to potential investors
arising from any untrue statement of a material fact contained in the reports,
either financial or narrative, or by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading except for statements and information or
omissions in regards to MBVB, provided however that there shall not be any
obligation to the extent that any loss, claim, damage or liability is finally
judicially determined recklessness or willful misconduct.
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Page 4
Letter of Engagement
III) SIGNATURES -
If the foregoing is satisfactory to you, please signify your approval
in the space provided below.
Very truly yours,
By: /s/ XXXX X. XXXXX
-------------------------------
Xxxx X. Xxxxx, Chairman
MAROON BELLS CAPITAL, INC
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Xxxxx X. Xxxxxxx
VENBANC, INC.
AGREED AND ACCEPTED THIS 10TH DAY, APRIL, 2000
By: /s/ XXXXX XXXXXXX
-------------------------------
Xxxxx Xxxxxxx
BOOTS & XXXXX GROUP
5
[BOOTS & XXXXX GROUP LETTERHEAD]
April 12, 2000
Mr. Xxxx Xxxxx, Chairman
Maroon Bells Capital Partners, Inc.
000 Xxxx Xxxxxxxxxxx Xx.
Lake Forest, Illinois 60045
Xx. Xxxxx Xxxxxxx, Chairman
VenBanc, Inc.
000 Xxxxxxx
Xxxxxx, Xxxxxxxx 00000
Mr. Xxxxx Xxxxxx, Managing Director
Interra Ventures
000 Xxxxx Xxxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Re: Superseding Agreement
Gentlemen,
This letter is intended to serve as an additional inducement to the issuance of
the commitment letter from Maroon Bells Capital Partners, Inc. as agent for a
syndicate including each of your companies, as well as possibly others, as
participants (Lenders) in the Traunche B loan participation to Boots & Xxxxx
International Well Control, Inc. ("Boots & Xxxxx"), a copy of which is
attached hereto. As such inducement, Boots & Xxxxx binds itself to the
additional terms set forth below:
1. Boots & Xxxxx will pay to Lenders as additional interest on the outstanding
balance of the Traunche B loan an amount equal to an additional four
percent (4%) of the loan balance in shares of the $.00001 par value common
stock of Boots & Xxxxx ("Common Stock"), based upon the closing bid price
per share, as of April 11, 2000, payable upon an increase in the
authorization therefor at the next meeting of the shareholders of Boots &
Xxxxx.
2. At funding of the Traunche B loan, Boots & Xxxxx shall issue to Lenders
warrants to purchase Common Stock of Boots & Xxxxx, (subject to and payable
upon an increase in the authorization therefore at the next meeting of the
shareholders of Boots & Xxxxx,) based on the closing bid price per share
as of April 11, 2000, on the basis of one (1) warrant for each Dollar
funded, when and as funded.
3. All Common Stock, whether issued, or underlying warrants, shall be subject
to a registration rights agreement which shall provide the holders thereof
with piggyback registration rights to participate in any subsequent
registration filed by Boots & Xxxxx with the Securities and Exchange
Commission, and shall provide for one (1) demand registration right at any
time after
