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EXHIBIT 10.22
XxxXxxxx.xxx, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Xxxx X. XxXxxxxxxx
President and Chief Executive Officer
February 11, 2000
Xx. Xxxxxxx Xxxxxxxx
TownsendTarnell, Inc.
Dear Xx. Xxxxxxxx,
This letter will evidence our mutual understanding and agreement with
respect to the strategic alliance (the "Strategic Alliance") between
XxxXxxxx.xxx, Inc., a Delaware corporation (the "Company") and TownsendTarnell,
Inc., ("Purchaser").
1. Purchase of Company Common Stock by Purchaser.
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(a) Purchaser hereby agrees to purchase 61,288 shares of the
Company's common stock, par value $.01 per share (the "Common
Stock"), pursuant to a Subscription Agreement (in the form
attached hereto as Exhibit A) for $612.88 in cash and the
execution of a promissory note (the "Note") (in the form attached
hereto as Exhibit B) in favor of the Company in aggregate
principal amount of $599,396.64 with interest accruing thereon at
the rate of 8% per annum. All of the shares of Common Stock
purchased by Purchaser pursuant to the Subscription Agreement
will be subject to a Security Agreement (in the form attached
hereto as Exhibit C).
(b) The Note will be payable in twelve consecutive monthly principle
installments of $49,949.72 payable, commencing February 1, 2000.
Additionally, each monthly payment will include all outstanding
interest due on the outstanding principle balance.
2. Other Obligations and Agreements.
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(a) Use of Names. Neither party to this agreement may reference the
other party to this agreement in presentations, advertising,
promotions or other published information without the other
party's prior consent (which consent shall not be unreasonably
withheld); provided, however, that either party may make such
disclosure if in the reasonable opinion of such party's counsel
such disclosure is required by law under the circumstances.
(b) Company and Purchaser agree to a Consulting and Support Services
Agreement (hereinafter "Consulting Agreement") to reflect the
following:
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(i) The Company will pay Purchaser a fee of $70,000.00 per
month beginning February 1, 2000, for a term of nine
consecutive months, in return for the commitments of
Purchaser, provided below. The parties hereto may cancel
this Consulting Agreement by mutual consent on six months
notice.
(ii) During the first six months of this Consulting Agreement,
the best reasonable efforts of Purchaser's personnel shall
be dedicated to promoting the use of the Company's trading
platform and website by potential buyers of thermoplastic
resins in North America and Europe. This effort will
include up to, but not be limited to, approximately 800
entities identified by the company as potential users of
its trading platform and related services. Purchaser will
maintain daily or weekly communications with the Company,
or its designated representative(s), regarding the status
of contacts with the list entities, qualifications of the
entities in terms of net worth, revenue, and credit
worthiness, and discussion with each entity toward
establishing them as members and traders on the trading
platform and users of related services.
(iii) Purchaser will commit its best reasonable efforts to
provide information from its North American and European
databases and resources of Purchaser, or any affiliated
company, including, but not limited to, the Plastics Market
Monthly, the Tarnell Buyer Profiles (of approximately
14,000 North American buyers), the Tarnell Financial
Resumes (of 6,000 buyers), the Tarnell Purchasing and
Paying Records (of 10,000 buyers) and access to
approximately 50 employees of Purchaser (or Purchaser's
related consultants and/or contract hires) who create and
operate these services on an unrestricted and timely basis
to furnish the Company the necessary information in order
to enable the Company to secure the listed entities as
members and traders on the trading platform and
specifically to fulfill the obligations under paragraph
(ii) above.
(iv) Purchaser and Company agree to use reasonable commercial
efforts to negotiate a separate agreement to install
interface to access new users for both parties.
3. Company investment in Purchaser's website.
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(a) Purchaser will provide Company with a mutually acceptable
business plan for the creation and development of
XxxxxxxxXxxxxxx.xxx ("XX.xxx"). This business plan will include
the design and implementation strategy for XX.xxx, the sources
and uses of funds, milestones, budgets, and projections all to
the sole satisfaction of Company. Upon such satisfaction, Company
will extend a line of credit evidenced by a Promissory Note,
Security Agreement, License Agreement, and related documents.
This line of credit will make available funds up to five hundred
thousand dollars ($500,000.00), with any funds drawn being due
and payable at the end of one year. Interest will accrue at the
rate of 12% per annum and the payable monthly on the outstanding
principle balance. If the Company
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elects not to extend a line of credit within 30 days of receipt
of Purchaser's business plan, the Company will relinquish the
option of investing in XX.xxx in their first round of private
placement.
(b) If, prior to January 1, 2002, XX.xxx conducts a private offering
of any of its securities, whether debt or equity, for an
aggregate amount of at least five million dollars
($5,000,000.00), XX.xxx shall offer to Company the opportunity to
invest at least one million dollars ($1,000,000.00) in the first
such offering (but not in any subsequent offering) made by XX.xxx
on the same financial terms offered to other Strategic Investors
in such offering; provided, however, that the Company's
participation in such offering shall be limited to a maximum of
ten percent (10%) of such offering, unless XX.xxx otherwise
agrees in writing.
4. Miscellaneous.
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(a) The Strategic Alliance, this letter agreement and all
documentation contemplated by this letter shall be governed by
the laws of the State of Texas, without regard to any conflict of
laws principles.
(b) Each of Purchaser and the Company will bear its own costs and
expenses of the preparation of the documentation and performance
of the obligations set forth in this letter.
If this letter correctly sets forth our understanding, please indicate your
acceptance by executing this letter in the space provided below.
Very truly yours,
/s/ XXXX X. XXXXXXXXXX
Xxxx X. XxXxxxxxxx
ACCEPTED AND AGREED TO
THIS 11th DAY OF FEBRUARY, 2000:
TOWNSENDTARNELL, INC.
By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: President
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