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EXHIBIT 10.9
FINANCIAL ADVISORY FEE AGREEMENT
This Financial Advisory Fee Agreement (the "Agreement") is made and entered into
as of the 29th day of March, 1999 (the "Effective Date"), by and among Probex
Corporation, a Colorado corporation ("Probex"), Silver Lake Industries, Inc., a
Texas corporation ("Silver Lake") and Brycap Investments, Inc., a Texas
corporation ("brycap").
WHEREAS, Probex is desirous of engaging Silver Lake and Brycap in the 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 of 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 Silver Lake and Brycap, 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 commitment made by an Approved Investor to
Probex at Closing (as defined below) regardless of whether such commitment 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.
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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 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 50% to Brycap and 50% to Silver Lake 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 three percent (3%) of the 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. It 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. Breakup Fees Payable to the Advisors. Probex agrees to pay the Advisors a
breakup fee in the event that Probex elects not to accept a firm commitment for
financing from a qualified financing source of the Approved Investors but does
enter into a financing with HSB Engineering Finance, Enron and/or an Affiliate
of either of these companies. Said breakup fee shall be equal to $5,000 per
month that the Advisors were engaged, up to a maximum of $20,000, and 5 year
warrants to purchase 10,000 shares of Probex common stock at a strike price
equal to the price paid per share by HSB and/or Enron.
5. 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.
6. 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
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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
judgment by a court to have resulted from Advisors' gross negligence or willful
misconduct.
7. Termination. Advisors' engagement hereunder my be terminated by either Probex
or the Advisors at any time after June 30, 1999 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.
8. 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 below:
If to Probex: If to Advisors:
Xx. Xxxxxx X. Xxxxxx Xx. Xxxx X. Xxxxxx
Probex Corporation Silver Lake Industries, Inc.
0000 XxXxx Xxxxx 000 0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Fax # (000) 000-0000 Fax # (000) 000-0000
(e) Entire Agreement. This Agreement constitutes the sole and only
agreement of the parties
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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 CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
---------------------------------
Tide: CEO
---------------------------------
BRYCAP INVESTMENTS INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: /s/ Xxxxxx X. Xxxxxx
-----------------------
Title: President
----------------------
SILVER LAKE INDUSTRIES, INC.
By: /s/ Hill X. Xxxxxx
-----------------------------------
Name: Hill X. Xxxxxx
---------------------------------
Title: President
--------------------------------
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EXHIBIT A
List of Approved Investors
Attached and made a part of that certain Financial Advisory Fee Agreement by and
between Probex Corporation and Silver Lake Industries, Inc. and Brycap
Investments, Inc,
Associated Energy Managers, Inc. Kisco Management Corporation
Bank One Leucadia National Corporation
Bank of America (NationsBank) Lim Rock Partners
Bank of Oklahoma MSD Capital Corporation
CIBC Xxxxxxxxxxx Corp. Madison Dearborn Partners
Calpine Corporation XxXxxxxx Group
Cambrian Capital Corporation Natural Gas Partners
Capital Resource Partners Prudential Capital
Capstone Capital Corporation Xxxx Resources, LLC
Chase Bank SCF Partners
The Common Fund Shell Capital, Inc.*
EOS Partners Southern Company Energy Marketing, L.P.
Energy Marketing, X.X. Xxxxx Securities, Inc,
ESL Investments Stratford Capital Partners LP/Stratford Equity
Encap Investments, Inc, (El Paso Energy) Partners, LP
Energy Spectrum Advisors, Inc. Stratford Industries
First Union Capital Markets Corp. TGF Management
Flemings, Inc. Texas Pacific
G. E. Capital Corp. The Beacon Group
Xxxxxxx, Xxxxx Capital Partners The Crossroads Group*
Harbourton Corporation Torch Energy Finance
Harvest Fund Partnership, LP Trust Company of the West
Highgate Holdings Union Bank of California
Xxxx Financial Corporation Warburg Pincus
ING Barings Yorktown Partners, LLC
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxxxxxx & Xxxxx
* To be addressed later.
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Amendment to Financial Advisory Fee Agreement
This Amendment is made and entered into as of this 10th day of June, 1999, by
and among Probex Corporation, a Colorado corporation ("Probex"), Silver Lake
Industries, Inc., a Texas corporation ("Silver Lake"), Brycap Investments, Inc.,
a Texas corporation ("Brycap") and Xxxxx X. Xxxxxxxxxx, a Texas resident
("Xxxxxxxxxx").
Whereas Probex is desirous of Xxxxxxxxxx assisting Silver Lake and Brycap in
their financing activities under that certain Financial Advisory Fee Agreement
dated as of March 29, 1999 (the "Agreement"),
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 hereto
agree as follows:
The Agreement shall be amended as provided below:
1. The definition of "Advisors" shall be amended to read in its entirety
as follows:
"Advisors" shall mean Silver Lake, Brycap, and Xxxxx X. Xxxxxxxxxx,
their affiliates, successors and assigns,
2 Section 2 shall be amended to read in its entirety as follows:
Fees Payable to Advisors Upon Closing of the Proposed Investment
(a) Except as provided in paragraph (b) below, as consideration for the
services rendered by the Advisors, should any one or more of the 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 in equal shares of 1/3
each to Brycap, Silver Lake and Xxxxxxxxxx at Closing. The total fees to be
paid to the Advisors by Probex under this paragraph (a) shall be equal to the
following:
(i) an amount of cash equal to six percent (6%) of the Capital
Provided by the Approved Investor(s); and
(ii) Five year warrants to purchase a number of shares of Probex common
stock equal to six percent (6%) 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 shall 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
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conversion feature and registration rights commensurate with those of the
investors participating in the Proposed Investment.
(b) Should Financial Security Assurance Inc. ("FSA"), or any other Approved
Investor to be listed on an Exhibit "B" to be appended hereto subject however to
the appearance of Probex Corp. for each such Approved Investor guarantee or
insure Probex's obligations to pay principal or interest with respect to any
issuance of debt by Probex, then in lieu of the fees payable under paragraph (a)
above, the fees described in subparagraphs (i) and (ii) 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 in equal shares of 1/3 each to Brycap, Silver Lake
and Xxxxxxxxxx at Closing. The total fees to be paid to the Advisors by Probex
under this paragraph (b) shall be equal to the following:
(i) an amount of cash equal to four and one-half percent (4.5%) of
the Capital Provided by the Approved Investor(s); and
(ii) Five year warrants to purchase a number of shares of Probex common
stock equal to four and one-half percent (4.5%) 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 shall 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. Clauses (a) and (b) of Section 3 of the Agreement are amended to read
in their entirety as follows:
"(a) a cash fee equal to one and one-half percent (1.5%) of the Capital
Provided by the Approved Investor(s), and (b) five year warrants equal to three
percent (3.0%) of the Capital Provided with shares issued based upon the formula
outlined in Section 2(a)(ii) above."
4. Section 4 of the Agreement is amended to read in its entirety as
follows:
Consulting Fees Payable to the Advisors Probex agrees to pay each of
the Advisors a consulting fee in the event that Probex enters into a financing
with a person other than an Approved Investor. Said consulting fee shall be
equal to $2,500 per month per Advisor for each month that an Advisor was
engaged, up to a maximum of $ 10,000 per Advisor, and 5 year warrants payable to
each Advisor granting each advisor the right to purchase 10,000 shares of Probex
common stock at a strike price equal to the price paid by the entity or person
providing the aforementioned financing.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of
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the date first written above.
Probex Corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: CEO
Brycap Investments
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
Silver Lake Industries, Inc.
By: /s/ Hill X. Xxxxxx
---------------------
Name: Hill X. Xxxxxx
Title: President
/s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
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EXHIBIT "A"
List of Approved Investors
Attached and made a part of that certain Financial Advisory Fee Agreement by and
between Probex Corporation and Silver Lake Industries, Inc. and Brycap
Investments, Inc.
Associated Energy Managers, Inc. Kisco Management Corporation
Bank One Leucadia National Corporation
Bank of America (NationsBank) Lime Rock Partners
Bank of Oklahoma MSD Capital Corporation
CIBC Xxxxxxxxxxx Corp. Madison Dearborn Partners
Calpine Corporation XxXxxxxx Group
Cambrian Capital Corporation Natural Gas Partners
Capital Resource Partners Prudential Capital
Capstone Capital Corporation Xxxx Resources, LLC
Chase Bank SCF Partners
The Common Fund Shell Capital, Inc.*
EOS Partners Southern Company Energy Marketing, L. P.
ESL Investments Starr Securities, Inc.
Encap Investments Inc. (El Paso Energy) Stratford Capital Partners LP/Stratford Equity
Energy Spectrum Advisors, Inc. Partners, LP
First Union Capital Markets Corp. Stratford Industries
Flemings, Inc. TGF Management,
G. E. Capital Corp. Texas Pacific
Xxxxxxx, Sachs Capital Partners The Beacon Group
Harbourton Corporation The Crossroads Group*
Harvest Fund Partnership, LP Torch Energy Finance
Highgate Holdings Trust Company of the West
Xxxx Financial Corporation Union Bank of California
ING Barings Warburg Xxxxxx
Xxxx Xxxxxxx Mutual Life Insurance Company Yorktown Partners, LLC
Xxxxxxxx & Xxxxx
* To be addressed later.
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SECOND AMENDMENT TO FINANCIAL ADVISORY FEE AGREEMENT
This Amendment is made and entered as of this 15th day of July, 1999, by and
among Probex Corporation, a Colorado corporation ("Probex"), Silver Lake
Industries, Inc., a Texas corporation ("Silver Lake"), Brycap Investments, Inc.,
a Texas corporation ("Brycap") and Xxxxx X. Xxxxxxxxxx, a Texas resident ("DES")
(hereinafter Silver Lake, Brycap and DES are collectively referred to as "SBS").
Whereas, SBS and Probex wish to add certain parties as Approved Investors
included to Exhibit A of that certain Financial Advisory Fee Agreement by and
among SBS and Probex, as amended (the "Agreement"); and
Whereas, DES desires to register and list on Exhibit A such other investors who
may wish participate in Probex's financing:
Now therefore, in consideration of the premises and 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 hereto
agree as follows:
1. The following entities are hereby added to Exhibit A of the Agreement:
Xxxx Xxxxxxxx
JVW Investments
MBIA
Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Partners
Chase Capital Partners
SG Capital Partners, LLC
First Reserve Corporation
Xxxxx Xxxxxxxx Energy Fund, L.P.
Quantum Energy Partners
Relational Investors, LLC
2. For the purposes of this Second Amendment, all capitalized terms not defined
in this Second Amendment shall have the meanings assigned to them in the
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Second
Amendment as of the date first written above.
Probex Corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
-----------------------------
Title: CEO
-----------------------------
Brycap Investments
By: By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxx Xxxxxxxxxx
Title: President
Silver Lake Industries, Inc.
By:
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Name: Hill X. Xxxxxx
Title: President
