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EXHIBIT 10.16
FINANCIAL ADVISORY FEE AGREEMENT
This Financial Advisory Fee Agreement (the "Agreement") is made and entered
into as of the 20th day of August, 1999 (the "Effective Date"), between Probex
Corp., a Colorado corporation ("Probex"), and Cambridge Strategies Group, LLC, a
Texas limited liability corporation ("Cambridge").
WHEREAS, Probex is desirous of engaging Cambridge in the non-exclusive capacity
of financial advisors specifically for the purpose of identifying and assisting
Probex in obtaining funding for the expansion of its operations, including but
not limited to, funding for the acquisition of certain sources of feedstock
supplies and the construction of one or more Probex plants (the "Proposed
Investment").
NOW, THEREFORE, in consideration of the premises and the covenants, agreements
and obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
covenant and agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
meanings indicated below:
"Advisors" means Cambridge, their affiliates, successors and assigns.
"Affiliate" of a person shall mean any other person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such person. For the purposes of this definition, "control"
means the power to direct the management and policies of a person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Additional Securities" means any debt or equity securities of Probex and/or any
of its Affiliates, issued after the Proposed Investment by any person included
on Exhibit "A" attached hereto and in accordance with the provisions set forth
in Section 3 of this Agreement.
"Approved Investor(s)" means those persons and their Affiliates listed on
Exhibit "A" attached hereto.
"Capital Provided" means the entire funding made by an Approved Investor to
Probex at Closing (as defined below) regardless of whether such funding is for
debt or equity.
"Closing" means the execution by Probex and an Approved Investor of binding
documentation evidencing the investment by an Approved Investor in the Proposed
Investment or in any Subsequent Transaction, regardless of whether such
investment takes the form of debt or equity.
"Subsequent Transaction" means any investment made by an Approved Investor in
Probex following and/or in addition to but under no circumstances including the
initial Proposed Investment and prior to March 29th, 2004.
2. Fees Payable to Advisors Upon Closing of the Proposed Investment.
(a) As consideration for services rendered by the Advisors, should any
one or more of the
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Approved Investors provide funding for the Proposed Investment then the fees
described below shall be due and payable to the Advisors at Closing. The cash
fees and warrants described in (i) and (ii) below shall be paid to Advisors at
Closing. The fee to be paid to the Advisors by Probex shall be equal to the
following:
(i) an amount in cash equal to five percent (5%) of the first one
million dollars, four percent (4%) of the second million
dollars, three percent (3%) of the third million dollars, 2%
of the fourth million dollars, and one percent (1%) of each
additional million dollars of Capital Provided by the Approved
Investor(s); and
(ii) Five year warrants to purchase a number of shares of Probex
common stock equal to five percent (5%) of the Capital
Provided divided by the price per common share paid by the
equity investors participating in the Proposed Investment. The
Advisors' exercise price for the warrants shall be the price
per common share paid by the equity investors participating in
the Proposed Investment. These warrants will be subject to a
Warrant Holder's Agreement which will be negotiated by the
parties in good faith and will contain among other things, a
cashless conversion feature and registration rights
commensurate with those of the investors participating in the
Proposed Investment.
3. Fees payable to the Advisors for Additional Capital Raised From
Approved Investors. If prior to March 29, 2004, Probex issues any Additional
Securities to an Approved Investor, regardless of whether or not such investor
participated in the Proposed Investment, then the Advisors shall be deemed to
have earned and Probex shall be obligated to pay to Advisors (a) a cash fee
equal to one percent (1%) of the Capital Provided by the Approved Investor(s);
and (b) five year warrants equal to two percent (2%) of the Capital Provided
with shares issued based upon the formula outlined in 2(a)(ii) above. The
Advisors' exercise price for these warrants shall be the price per common share
paid by the equity investors participating in the Subsequent Transaction. Such
fees and warrants will be due and payable to Advisors at the closing of such
Subsequent Transactions.
4. Expenses. Probex agrees to reimburse Advisors, upon request made from
time to time, for its reasonable out-of-pocket expenses incurred in connection
with Advisors' activities under this Agreement.
5. Indemnification Probex agrees to indemnify Advisors, and their
respective directors, officers, partners, employees, agents, and controlling
persons (Advisors and each such person being an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
related to the Proposed Investment or any transaction contemplated by this
Agreement and will reimburse any Indemnified Party for all expenses (including
fees and expenses of counsel) as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding arising therefrom, whether or not such Indemnified
Party is a party and whether or not such claim, action or proceeding is
initiated or brought by Probex. Probex will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage or
liability is found in a final judgement by a court to have resulted from
Advisors'
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gross negligence or willful misconduct.
6. Termination. Advisors' engagement hereunder may be terminated by
either Probex or the Advisors at any time after the close of the initial project
financing upon written notice to that effect to the other party, it being
understood that the provisions relating to the payment of fees (including
breakup fees) and expenses, indemnifications, contribution, settlements and the
role and duties of the Advisors and Probex shall survive any such termination.
7. Miscellaneous Provisions.
(a) Relationship. This agreement does not create, and shall not be
construed to create, any joint venture or partnership between the parties. No
officer, employee, agent, servant, or independent contractor of the Advisors nor
their Affiliates shall at any time be deemed to be an employee, agent, servant,
or broker of Probex for any purpose whatsoever solely as a result of this
Agreement, and Advisors shall have no right or authority to assume or create any
obligation or liability, express or implied, on Probex's behalf, or to bind
Probex in any manner or thing whatsoever.
(b) Waiver. Notwithstanding anything to the contrary contained herein,
the failure of either party to seek a redress for violation, or to insist upon
the strict performance, of any covenant, agreement, provision, or condition
hereof shall not constitute a waiver of the terms of such covenant, agreement,
provision, or condition at subsequent times or of the terms of any other
covenant, agreement, provision, or condition, and each party shall have all
remedies provided herein with respect to any subsequent act which would have
originally constituted the violation hereunder.
(c) Governing Law. This Agreement and all questions relating to its
validity, interpretation, performance, and enforcement (including without
limitation, provisions concerning limitations of action), shall be governed by
and construed in accordance with the internal laws of the State of Texas,
notwithstanding any conflict-of-laws. doctrines of such state or other
jurisdiction to the contrary.
(d) Notices. Any notice, request, demand, consent or authorization
(hereinafter referred to as "Notice") required or permitted to be given under
this Agreement shall be in writing and shall be delivered either personally, by
courier or by facsimile to the address or facsimile number listed below:
If to Probex: If to Advisors:
Xx. X. Xxxx Sage Xx. Xxxxx Xxxxxxxx
Probex Corporation Cambridge Strategies Group, LLC
0000 XxXxx, Xxxxx 000 X.X. Xxx 000000
Xxxxxxxxxx, Xxxxx 75007 Xxxxxx Xxxxx, Xxxxx 000000-0000
Fax # (000) 000-0000 Fax # (000) 000-0000
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(e) Entire Agreement. This Agreement constitutes the sole and only
agreement of the parties hereto and supersedes any prior understandings or
written or oral agreements between the parties respecting the subject matter
herein.
(f) Multiple Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed to be
an original, but all of which together constitute one and the same instrument.
(g) Amendments. This Agreement shall not be amended, changed or
modified or any provision thereof waived or discharged except in writing by both
parties.
(h) This Agreement shall be binding upon and inure to the benefit of
the heirs, personal representatives, successors and assigns of the parties
hereto.
(i) Advisors may add names to Exhibit "A" from time to time, provided
all such additions must be approved by Probex in writing.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the Effective Date.
PROBEX
By: ____________________________
Name: __________________________
Title: _________________________
CAMBRIDGE STRATEGIES GROUP
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: CEO
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