Exhibit 10.37
PHOENIX INVESTORS, LLC
March 15, 2003
Ventures-National Incorporated
Dba Titan General Holdings, Inc.
00000 Xxx Xxxx Xxxxxxx Xxxx
Xxxxxxx XX 00000
Attention: XX Xxxxx
CEO
Dear JP:
We are pleased to set forth the terms to the Agreement (the
"Agreement") between Phoenix Investors, LLC (hereinafter "PHOENIX" or the
"Consultant") and Ventures-National Incorporated (hereinafter referred to in
this Agreement collectively as the "Company"). All capitalized terms used, but
not otherwise defined, herein shall have the respective definitions assigned
thereto in the Titan Agreement.
1 PHOENIX will assist the Company as the Company's non-exclusive
consultant in connection with the following proposed activities:
(a) providing advice as to the structure of debt and equity
financing of the Company;
(b) assisting the Company in the identification and selection of
appropriate members of management, Board of Directors, and
advisory board members;
(c) otherwise assisting the Company with advancing its business
objectives, including analyzing the Company's business and
capital structure models; and
(d) Assisting in the management of the daily business affairs of
the Company as needed from time to time.
2) In connection with XXXXXXX's activities on the Company's behalf, the
Company will cooperate with PHOENIX and will furnish PHOENIX with all
information and data concerning the Company, any Transaction, and, to
the extent available to the Company (the "Information") which PHOENIX
deems appropriate and will provide PHOENIX with access to the Company's
officers, directors, employees, independent accountants, and legal
counsel. To the extent that the Company has access to the officers,
directors, employees, independent accountants, and legal counsel of the
Target, it will provide such access to PHOENIX. The Company represents
and warrants that all Information (a) made available to PHOENIX by the
Company or (b) contained in any filing by the Company with any court or
governmental regulatory agency, commission, or instrumentality with
respect to any Transaction will, at all times during the period of the
engagement of PHOENIX hereunder, be complete and correct in all
material respects and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading. The Company further
represents and warrants that any projections provided by it to PHOENIX
will have been prepared in good faith and will be based upon
assumptions, which, in light of the
PHOENIX Investors, LLC
March 15, 2003
Page 2
circumstances under which they are made, are reasonable. The Company
acknowledges and agrees that, in rendering its services hereunder,
XXXXXXX will be using and relying on the Information (and information
available from public sources and other sources deemed reliable by
PHOENIX) without independent verification thereof by PHOENIX or
independent appraisal by PHOENIX of any of the Company or the Company's
assets or of the Target or the Target's assets. XXXXXXX does not assume
responsibility for the accuracy or completeness of the Information or
any other information regarding the Target, the Company, or any
Transaction. Any advice rendered by PHOENIX pursuant to this Agreement
may not be disclosed publicly without XXXXXXX's prior written consent.
3) In consideration of our services pursuant to this Agreement, PHOENIX
shall be entitled to receive, and the Company agrees to pay PHOENIX
aggregate fees as follows:
(a) Consultant's fees as follows: (i) cash in an amount equal to
$18,000 per month for a period of one year (the "Period")
beginning April 1, 2003 and automatically renewable for six
month Periods thereafter unless any party hereto shall deliver
to the other notice of termination within 60 days prior to the
termination of the Period (or the Period as theretofore
extended).
(b) Warrants to purchase 200,000 (two-hundred-thousand) shares of
common stock. Said Warrants shall be issued to PHOENIX within
thirty days of signing this Agreement and shall be considered
due in full upon the signing of this Agreement.
(c) Such Warrants shall be exercisable at a price of $2.00
(two-dollar) per share of common stock and for a period of
five years commencing on the date of this Agreement. Such
Warrants shall provide for adjustment of the exercise price
thereof and the number of shares of Common Stock issueable
upon the exercise thereof in the event of (i) the declaration
of dividends on the outstanding Common Stock payable in shares
of its capital stock; (ii) subdivision of the outstanding
Common Stock; (iii) combination of the outstanding Common
Stock into a smaller number of shares; or (iv) issuance of any
shares of its capital stock by reclassification of the Common
Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the
continuing corporation). Such Warrants shall also have a
cashless exercise provision or a net-issuance provision
attached to each exercise of the Warrants and the choice of
the provision described herein shall be made by PHOENIX.
(d) All consultant fees described in section `(a)' above shall be
due on the first of the current month and paid to PHOENIX no
later than the fifth of said month. In addition, the balance
of each Period (one year for the initial Period [April 2003
thru March 2004] and six months for each subsequent Period)
shall be due in full in the event that the Company terminates
PHOENIX for any reason during said period.
(e) In the event that the Company fails to pay PHOENIX as
described herein for a period in excess of forty days without
XXXXXXX's written permission, then PHOENIX shall have the
right to use any means necessary including filing a lien
against the Company or any of its subsidiaries and the Company
shall be responsible for the cost of any means taken to obtain
the consideration due PHOENIX under this Agreement or any
other PHOENIX Agreement with the Company. In the event that,
for any reason, the Company shall fail to pay to PHOENIX all
or any portion of the compensation otherwise due thereto
pursuant to this Agreement, interest shall accrue on such
amount and shall be payable on the unpaid balance due
hereunder from the date such amount was due through and
including the date actually received by XXXXXXX at the rate of
interest equal to two points over the prime rate of interest
as determined by Citibank, N.A. in New York, New York,
computed on a daily basis and adjusted as announced from time
to time.
PHOENIX Investors, LLC
March 15, 2003
Page 3
(f) It is understood that significant work has already been done
by XXXXXXX in arrears to this Agreement and, therefore,
considered additional efforts to be covered through the
consideration described herein.
All monetary fees shall be made payable to the order of Phoenix
Investors, LLC and mailed to 0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxxxx
00000.
In addition to the fees described in paragraph 3 above, the Company
agrees to promptly reimburse PHOENIX upon request for all out-of-pocket expenses
incurred by PHOENIX (including fees and disbursements of counsel, and of other
consultants and advisors retained by PHOENIX which are approved by the Company)
in connection with the matters contemplated by this Agreement or in collection
of consideration described herein.
4) The Company agrees to indemnify PHOENIX in accordance with the
indemnification provisions (the "Indemnification Provisions") attached to
this Agreement, which Indemnification Provisions are incorporated herein
and made a part hereof.
5) The term of this Agreement shall commence on the date hereof and expire as
described in section 3(a) herein. Notwithstanding the foregoing, either
party hereto may terminate this Agreement at any time upon sixty days
written notice, without liability or expenses incurred or continuing
obligation, except as otherwise set forth herein. Neither termination of
this Agreement nor completion of the assignment contemplated hereby shall
affect: (i) any compensation earned by PHOENIX or any other finder up to
the date of termination or completion, as the case may be, (ii) any
compensation to be earned by XXXXXXX or any other finder after termination
pursuant to paragraph 3 hereof, (iii) the reimbursement of expenses
incurred by PHOENIX or any other finder up to the date of termination or
completion, as the case may be, (iv) the provisions of Sections 3 through
11, inclusive, of this Agreement, and (v) the attached Indemnification
Provisions which are incorporated herein, all of which shall remain
operative and in full force and effect.
6) The validity and interpretation of this Agreement shall be governed by the
law of the State of New York applicable to agreements made and to be fully
performed therein, without reference to conflicts of laws. The Company and
PHOENIX irrevocably submit to the jurisdiction of any court of the State of
New York located in New York City, new York for the purpose of any suit,
action, or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated hereby, which is brought by or
against the Company, and (i) hereby irrevocably agrees that all claims in
respect of any such suit, action, or proceeding may be heard and determined
in any such court and (ii) to the extent that the Company has acquired, or
hereafter may acquire any immunity from jurisdiction of such court or from
any legal process therein, the Company hereby waives, to the fullest extent
permitted by law, such immunity. The Company hereby waives, and agrees not
to assert in any such suit, action, or proceeding, in each case, to the
fullest extent permitted by applicable law, any claim that (a) the Company
is not personally subject to the jurisdiction of any such court, (b) the
Company is immune from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution,
execution, or otherwise) with respect to the Company's property, or (c) any
such suit, action, or proceeding is brought in an inconvenient forum.
PHOENIX Investors, LLC
March 15, 2003
Page 4
7) Each such counterpart shall be, and shall be deemed to be, an original
instrument, but all such counterparts taken together shall constitute one
and the same Agreement. This Agreement may not be modified or amended
except in writing signed by the parties hereto.
8) The Consultant may disclose any Confidential Information that is required
to be disclosed by law, government regulation, or court or administrative
order or process. If disclosure is required, the Consultant will give the
Company advance notice so that the Company may seek a protective order or
take other action reasonable under of the circumstances. The Company also
understands the Consultant must release all types of information in
performance of the duties for the Company and requests to be informed upon
request for a list of which confidential information has been dispersed.
9) Upon termination of this Agreement, the Consultant will promptly return to
the Company at the Company's cost and request or destroy all materials
containing Confidential Information, including, but not limited to, data,
records, reports, and other property furnished by the Company to the
Consultant.
10) Each of the parties hereto represents and warrants that execution,
delivery, or performance of this Agreement does not conflict with, or
violate the terms of, any other agreement to which it is a party or by
which it is bound.
11) Any notice provided under this Agreement shall be in writing and shall be
deemed to have been effectively given when delivered personally, sent by
private express mail service (such as Federal Express), or sent by
registered or certified mail (return receipt requested) to the address set
forth herein (or to such other address as any party has furnished in
writing to the other parties).
12) The invalidity or unenforceability of any particular provision of this
Agreement or portion thereof shall not affect the validity or
enforceability of any other provision thereof or portion thereof. If any
provision of this Agreement is adjudicated to be so broad as to be
unenforceable, it shall be interpreted to be only as broad as is
enforceable.
13) The benefits of this Agreement shall inure to the respective successors and
assigns of the parties hereto and of the indemnified parties hereunder and
their successors and assigns and representatives, and the obligations and
liabilities assumed in this Agreement by the parties hereto shall be
binding upon their respective successors and assigns.
14) For the convenience of the parties, any number of counterparts of this
Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all of
such counterparts taken together shall constitute one and the same
Agreement. This Agreement may not be modified or amended, except in writing
signed by the parties hereto.
15) This Agreement shall not detract or lessen or otherwise affect any previous
Agreement between PHOENIX and the Company or its subsidiaries or
predecessors unless specifically mentioned herein. This Agreement is meant
to add to the terms and duties of PHOENIX's other Agreements with the
Company as described herein.
PHOENIX Investors, LLC
March 15, 2003
Page 5
If the foregoing correctly sets forth our Agreement, please sign the
enclosed copy of this letter in the space provided and return it to us.
Very truly yours,
Phoenix Investors, LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Confirmed and Agreed to
this 15 day of March, 2003:
VENTURES-NATIONAL INCORPORATED
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: President and CEO
PHOENIX Investors, LLC
March 15, 2003
Page 6
INDEMNIFICATION PROVISIONS
The Company (as such term is defined in the Agreement (as such term is
defined below)) agrees to indemnify and hold harmless PHOENIX against any and
all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses, and disbursements (and all actions, suits,
proceedings, and investigations in respect thereof and any and all legal or
other costs, expenses, and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including, without
limitation, the costs, expenses, and disbursements, as and when incurred, of
investigating, preparing, or defending any such action, proceeding, or
investigation (whether or not in connection with litigation in which PHOENIX is
a party), directly or indirectly, caused by, relating to, based upon, arising
out of, or in connection with (a) PHOENIX's acting for the Company, including,
without limitation, any act or omission by PHOENIX in connection with its
acceptance of or the performance or non-performance of its obligations under
this agreement, dated march 15, 2003 between PHOENIX and the Company, as such
agreement may be amended from time to time (the "Agreement"), or (b) any
Transaction (as such term is defined in the Agreement); provided, however, such
indemnity shall not apply to any portion of any such loss, claim, damage,
obligation, penalty, judgment, award, liability, cost, expense, or disbursement
to the extent it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from the gross negligence or willful misconduct of PHOENIX. The Company
also agrees that PHOENIX shall not have any liability (whether direct or
indirect in contract or tort or otherwise) to the Company for or in connection
with the engagement of PHOENIX, except to the extent that any such liability is
found in a final judgment by a court of competent jurisdiction (not to subject
to further appeal) to have resulted primarily and directly from XXXXXXX's gross
negligence or willful misconduct.
These Indemnification Provisions shall be in addition to any liability
which the Company may otherwise have to PHOENIX or the persons indemnified below
in this sentence and shall extend to the following: PHOENIX, its affiliated
entities, directors, officers, employees, counsel, agents, and controlling
persons (within the meaning of the federal securities laws). All references to
PHOENIX in these Indemnification Provisions shall be deemed to include any and
all of the foregoing.
If any action, suit, proceeding, or investigation is commenced as to
which XXXXXXX proposed to demand indemnification, it shall notify the Company
with reasonable promptness; provided, however, that any failure by PHOENIX to
notify the Company shall not relieve the Company from its obligations hereunder.
PHOENIX shall have the right to retain counsel of its own choice to represent
it, and the Company shall pay the fees, expenses, and disbursements of such
counsel; and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Company and any counsel designated by the
Company. The Company shall be liable for any settlement of any claim against
PHOENIX made with its written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the prior written consent of PHOENIX,
settle or compromise any claim, or permit a default or consent to the entry of
any judgment in respect thereof, unless such settlement, compromise, or consent
includes, as an unconditional term thereof, the giving by the claimant to
PHOENIX of an unconditional release from all liability in respect of such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these Indemnification Provisions is made, but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and PHOENIX, on the other hand, shall
contribute to the losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses, and disbursements to which the
indemnified persons may be subject in accordance with the relative benefits
received by the Company, on the one hand, and PHOENIX, on the other hand, in
connection with the statements, acts, or omissions which resulted in such
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses, and disbursements and the relevant equitable considerations
shall also be considered. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for such fraudulent misrepresentation. Notwithstanding the
foregoing, PHOENIX shall not be obligated to contribute any amount hereunder
that exceeds the amount of fees previously received by PHOENIX pursuant to the
Agreement.
Neither termination nor completion of the engagement of PHOENIX
referred to above shall affect these Indemnification Provisions, which shall
then remain operative and in full force and effect.
