Exhibit No. 10.12
Investment Banking Agreement
This Agreement is made as of December 1, 1997, by and between Crown
Energy Corp, a Utah Corporation ("Crown") with its principal offices at 000
Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx, 00000, and Fortress Financial
Group, Ltd., a Delaware Corporation ("FORTRESS") with its principal offices at
0000 Xxxx Xxxxxxxxx, Xxxxx X, Xxxx Xx Xxxxx, Xxxxx Xxxxxxxx, 00000.
Witnesseth
WHEREAS, Crown requires expertise in the area of investment banking to
support its business and growth;
WHEREAS, FORTRESS has substantial contacts among the members of the
investment community, investment banking expertise, and desires to act as a
consultant to provide investment banking and advisory services;
NOW, THEREFORE, in consideration of the premise and the mutual promises
and covenants contained herein and subject specifically to the conditions
hereof, and intending to be legally bound thereby, the parties agree as follows:
12. Certain Definitions. When used in this Agreement, the following
terms shall have the meanings set forth below:
12.1 Affiliate - any persons or entities controlled by a
Party.
12.2 Crown - Crown Energy Corporation.
12.3 Contact Person - the person who shall be primarily
responsible for carrying out the duties of the parties hereunder. Crown and
FORTRESS shall each appoint a Contact Person to be responsible for their
respective duties. In the event that one party gives notice to the other party
in writing that, in their reasonable opinion, the other party's Contact Person
is not able to fulfill their duties and responsibilities hereunder, both parties
shall mutually agree upon a replacement Contact Person within 10 days of the
said notice.
12.4 Extraordinary Expenses - expenses that are beyond those
expenses that are usual, regular, or customary in the conduct of in-house
activities in fulfillment of the scope of this Agreement which are agreed to in
advance by Crown.
12.5 Payment or Payable in kind - distribution of the proceeds
of a transaction in the same type and form as was given as valuable
consideration for the transaction.
13. Contact Persons. The Contact Person for Crown is Xxx Xxxxxx,
President. The Contact Person for FORTRESS is Xxxxxxx X. Xxxxxx, President.
14. Services to be Rendered by FORTRESS. Services to be rendered, on a
best efforts basis, by FORTRESS are as follows:
14.1 Introduction to the Securities Brokerage Community.
FORTRESS has a close association with numerous broker/dealers and investment
professionals across the country and will enable contact between Crown to
facilitate business transactions among them. FORTRESS shall use their contacts
in the brokerage community to assist Crown in establishing relationships with
securities dealers and to provide the most recent corporate information to
interested securities dealers on a regular and continuous basis. FORTRESS
understands that this is in keeping with Crown's business objective to establish
a nationwide network of securities dealers who have an interest in Crown's
securities.
14.2 Market-making Intelligence. FORTRESS's clearing agent,
First Southwest Company, is a market-maker in numerous securities, and FORTRESS
has access to proprietary information through First Southwest Company's
market-making facilities and personnel. FORTRESS will monitor and react to
sensitive market information on a timely basis and provide advice and counsel
and proprietary intelligence (including but not limited to information on price,
volume and the identification of market-makers, buyers and sellers) to Crown in
a timely fashion and with substantial value-added interpretation of such
information. The foregoing notwithstanding, no information will be provided to
Crown with respect to the activities of any other FORTRESS customers or customer
accounts without such customer's prior consent.
14.3 Crown Transaction Due Diligence. Upon Crown's written
request FORTRESS will undertake due diligence on all proposed financial
transactions affecting Crown, of which FORTRESS is notified in writing in
advance, including investigation and advice on the financial, valuation and
stock price implications thereof.
14.4 Additional Duties. Crown and FORTRESS shall mutually
agree in writing upon any additional duties which FORTRESS may provide for
compensation paid or payable by Crown under this Agreement. Such additional
agreement(s) may, although there is no requirement to do so, be attached hereto
and made a part thereof by written amendments to be listed as "Exhibits"
beginning with "Exhibit A" and initialed by both parties.
14.5 Best Efforts. FORTRESS shall devote such time and best
efforts to the affairs of Crown as is reasonable and adequate to render the
consulting services contemplated by this Agreement. FORTRESS cannot guarantee
results on behalf of Crown, but shall pursue all avenues available through its'
network of financial contacts. At such time as an interest is expressed in
Crown's needs, FORTRESS shall notify Crown and advise it as to the source of
such interest and any terms and conditions of such interest. The acceptance and
consummation of any transaction is subject to acceptance of the terms and
conditions by Crown. It is understood that a portion of the compensation to be
paid hereunder is being paid hereunder by Crown to have FORTRESS remain
available to assist with transactions on an as-needed basis.
15. Initial Fee to FORTRESS. Crown shall pay FORTRESS an initial fee of
$25,000 (Twenty-Five Thousand Dollars) for FORTRESS' initial set-up activities
which are necessary for FORTRESS to provide the services herein. Such fee will
be paid as follows: $12,500.00 within ten days of the execution of this
Agreement, and $12,500.00 within 90 days of the execution of this Agreement.
16. Indemnification. Crown agrees to indemnify and hold harmless
FORTRESS, each of its officers, directors, employees and each person, if any,
who controls FORTRESS, (collectively the "FORTRESS IP") against any and all
liability, loss and costs, expenses or damages, including but not limited to,
any and all expenses whatsoever reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever or howsoever caused, by reason of any claim asserted against any
FORTRESS IP by reason, or allegedly by reason, of any act, neglect, default or
omission, or any untrue or alleged untrue statement of a material fact, or any
misrepresentation of any material fact or any breach of any material warranty or
covenant of Crown or any of its agents, employees, or other representatives
arising out of, or in relation to, this Agreement. Nothing herein is intended to
nor shall it relieve either party from liability for its own act, omission or
negligence. All remedies provided by law, or in equity shall be cumulative and
not in the alternative.
FORTRESS agrees to indemnify and hold harmless Crown, each of its
officers, directors, employees and each person, if any, who controls Crown
(collectively the Crown IP) against any and all liability, loss and costs,
expenses or damages, including but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever or howsoever
caused by reason of any claim asserted against any Crown IP by reason, or
allegedly by reason, of any act, neglect, default or omission, or any untrue or
alleged untrue statement of a material fact, or any misrepresentation of any
material fact or any breach of any material warranty or covenant by FORTRESS or
any of its agents, employees, or other representatives arising out of, or in
relation to, this Agreement. Nothing herein is intended to nor shall it relieve
either party from liability for its own act, omission or negligence. All
remedies provided by law, or in equity shall be cumulative and not in the
alternative.
17. Crown Representations. Crown hereby represents, covenants and
warrants to FORTRESS as follows:
17.1 Authorization. Crown and its signatories herein have full
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
17.2 No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate any provision of the charter or by-laws of Crown, or violate any terms
or provision of any other agreement or any statute or law.
17.3 Litigation. Except as set forth below, there is no
actions, suit, inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or commission pending
or to the best knowledge of Crown threatened against Crown or any of its
officers, directors, or agent, which questions or challenges the validity of
this Agreement and its subject matter or will impair Crown's ability to perform
hereunder and Crown does not know or have reason to know of any valid basis for
any such action, proceeding or investigation.
17.4 Consents. No consent of any person, other than the
signatories hereto, is necessary for consummation of the transactions
contemplated hereby, including, without limitation, consents from parties to
loans, contracts, lease or other Agreements and consents from governmental
agencies, whether federal, state, or local.
17.5 FORTRESS Reliance. FORTRESS has and will rely upon the
documents, instruments and written information furnished to FORTRESS by Crown's
officers or other designated employees. All representations and statements
provided by Crown are true and complete and accurate to the best of Crown's
knowledge.
17.6 Services NOT EXPRESSED OR IMPLIED.
A. FORTRESS has not agreed with Crown in this
Agreement or any other Agreement, verbal or written, to be a market-maker in
Crown's securities or in any specific securities or securities in which Crown
has an interest; and,
B. Any payments made herein to FORTRESS are
not, and shall not be construed as, compensation to FORTRESS for the purposes of
making a market, to cover FORTRESS out-of-pocket expenses for making a market,
or for the submission by FORTRESS of an application to make a market in any
securities; and,
C. No payments made herein to FORTRESS are
for the purpose of affecting the price of any security or influencing any
market-making functions, including but not limited to bid/ask quotations,
initiation and termination of quotations, retail securities activities, or for
the submission of any application to make a market.
18. FORTRESS Representations. FORTRESS hereby represents, covenants and
warrants to Crown as follows:
18.1 Authorization. FORTRESS and its signatories herein
have full power and authority to enter into this
Agreement and to carry out the transactions
contemplated hereby.
18.2 No Violation. Neither the execution and ------------
delivery of this Agreement nor the consummation of
the transactions contemplated hereby will violate any
provision of the charter or by-laws of FORTRESS or
violate any terms or provisions of any other
Agreement or any statute or law.
18.3 Litigation. Except as set forth below, there
---------- is no actions, suit, inquiry, proceeding
or investigations by or before any court or
governmental or other regulatory or administrative
agency or commission pending or to the best knowledge
of FORTRESS threatened against FORTRESS or any of its
officers, directors, or agents, which questions or
challenges the validity of this Agreement and its
subject matter or will impair FORTRESS's ability to
perform hereunder and FORTRESS does not know or have
reason to know of any valid basis for any such
action, proceeding or investigation.
18.4 Consents. No consent of any person, other than the
signatories hereto, is necessary for the consummation
of the transactions contemplated hereby, including
without limitation, consents from parties to liens,
contracts, lease or other Agreements and consents
from governmental agencies, whether federal, state or
local.
19. Confidentiality.
19.1 FORTRESS and Crown each agree to provide reasonable
security measures to keep information confidential where release may be
detrimental to their respective business interests. FORTRESS and Crown shall
each require their employees, agents, affiliates, subcontractors, other
licensees, and others who will have access to the information through FORTRESS
and Crown respectively, to first enter appropriate non-disclosure Agreements
requiring the confidentiality contemplated by this Agreement in perpetuity.
19.2 FORTRESS will not, either during its engagement by Crown
pursuant to this Agreement or at any time thereafter, disclose, use or make
known for its or another's benefit, any confidential information, knowledge, or
data of Crown or any of its affiliates in any way acquired or used by FORTRESS,
during its engagement by Crown. Confidential information, knowledge or data of
Crown and its affiliates shall not include any information which is, or becomes
generally available to the public other than as a result of a disclosure by
FORTRESS or its representatives.
20. Miscellaneous Provisions.
20.1 Amendment and Modification. This Agreement may be
amended, modified and supplemented only by written agreement of FORTRESS and
Crown.
20.2 Waiver of Compliance. Any failure of FORTRESS, on the one
hand, or Crown, on the other, to comply with any obligation, agreement, or
condition herein may be expressly waived in writing, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
20.3 Expenses: Transfer Taxes, Etc. Whether or not the
transaction, if any, contemplated by this Agreement shall be consummated,
FORTRESS agrees that all fees and expenses incurred by FORTRESS in connection
with this Agreement shall be borne by FORTRESS and Crown agrees that all fees
and expenses incurred by Crown in connection with this Agreement shall be borne
by Crown, including, without limitation as to FORTRESS or Crown, all fees of
counsel and accountants.
20.4 Other Business Opportunities. Except as expressly
provided in this Agreement, each party hereto shall have the right independently
to engage in and receive full bene(pound)its from business activities. In case
of business activities which would be competitive with the other party, notice
shall be given prior to this Agreement or, if such activities are proposed,
within ten (10) days prior to engagement therein. The doctrines of "corporate
opportunity" or "business opportunity" shall not be applied to any other
activity, venture, or corporation of either party.
20.5 Compliance with Regulatory Agencies. Each party agrees
that all actions, direct or indirect, taken by it and its respective agents,
employees and affiliates in connection with this agreement and any financing or
underwriting hereunder shall conform to all applicable Federal and State
securities laws.
20.6 Notices. Any notices to be given hereunder by any party
to the other may be effected by personal delivery in writing or in by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the "Contact Person" at the addresses appearing in
the introductory paragraph of this Agreement, but any party may change his
address by written notice in accordance with this subsection. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of five (5) days after mailing.
20.7 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any right, interest or obligations hereunder will be assigned by any of the
parties hereto without the prior written consent of the other parties, except by
operation of law.
20.8 Delegation. Neither party shall delegate the performance
of its duties under this Agreement without the prior written consent of the
other party.
20.9 Publicity. Neither FORTRESS nor Crown shall make or
issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement for dissemination to the general public without the
prior consent of the other party. This provision shall not apply, however, to
any announcement or written statement required to be made by law or the
regulations of any Federal or State governmental agency, except that the party
concerning the timing and consent of such announcement before such announcement
is made.
20.10 Governing Law. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of Utah, without regard to its conflict of law doctrine.
Crown and FORTRESS agree that if any action is instituted to enforce or
interpret any provision of this Agreement, the jurisdiction and venue shall be
Salt Lake City, Utah.
20.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
20.12 Headings. The heading of the sections of this Agreement
are inserted for convenience only and shall not constitute a part hereto or
affect in any way the meaning or interpretation of this Agreement.
20.13 Entire Agreement. This Agreement and the other documents
and certificates delivered pursuant to the terms hereto, sets forth the entire
Agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and supersedes all prior agreements, promise,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto.
20.14 Third Parties. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or corporation other than the
parties hereto and their successors or assigns, any rights or remedies under or
by reason of this Agreement.
20.15 Attorneys' Fees and Costs. If any action is necessary to
enforce and collect upon the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees and costs, in addition to any other
relief to which that party may be entitled. This provision shall be construed as
applicable to the entire Agreement.
20.16 Survivability. If any part of this Agreement is found,
or deemed by a court of competent jurisdiction to be invalid or unenforceable,
that part shall be severable from the remainder of the Agreement.
20.17 Further Assurances. Each of the parties agrees that it
shall from time-to-time take such actions and execute such additional
instruments as may be reasonably necessary or convenient to implement and carry
out the intent and purpose of this Agreement.
20.18 Right to Data After Termination. After termination of
this Agreement, each party shall be entitled to copies of all information
acquired hereunder as of the date of termination and not previously furnished to
it.
20.19 Relationship of the Parties. Nothing
--------------------------- contained in this Agreement shall be deemed to
constitute either party to become the partner of the other, the agent or legal
representative of the other, nor create any fiduciary relationship between them,
except as otherwise expressly provided herein. It is not the intention of the
parties to create nor shall this Agreement be construed to create any commercial
relationship or other partnership. Neither party shall have any authority to act
for or to assume any obligation or responsibility on behalf of the other party,
except as otherwise expressly provided herein. The rights, duties, obligations
and liabilities of the parties shall be separate, not joint or collective. Each
party shall be responsible only for its obligations as herein set out and shall
be liable only for its share of the costs and expenses as provided herein.
20.20 No Authority to Obligate the Contractor. Without the
consent of the Board of Directors of Crown, FORTRESS shall have no authority to
take, nor shall it take, any action committing or obligating Crown in any
manner, and it shall not represent itself to others as having such authority.
21. Term of Agreement and Termination. This Agreement shall be
effective upon execution, shall continue for one year unless terminated sooner,
by either party, upon giving to the other party thirty (30) days written notice,
after which time this Agreement is terminated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
CROWN ENERGY CORPORATION
By: Xxx Xxxxxx, President
FORTRESS FINANCIAL GROUP, LTD.
By: Xxxxxxx X. Xxxxxx, President
