INVESTMENT BANKING AGREEMENT
This Agreement is made as of this day September 31, 2001 by and between
Universal Automotive Industries, Inc., having its business office at 00000 Xxxxx
Xxxxxxx Xxx., Xxxxx, XX (the "Company") and Global Capital Securities Corp.,
with its principal office located at 0000 Xxxxx Xxxxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxx, 00000 (the "Consultant").
WHEREAS, the Company desires to retain the Consultant and the Consultant desires
to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth:
NOW THEREFORE, in consideration of the foregoing and the mutual promises and
covenants herein contained, it is agreed as follows:
1. Retention - The Company hereby retains the Consultant to perform
non-exclusive consulting services related to corporate finance and
other matters, and the Consultant hereby accepts such retention and
shall perform for the Company and the duties described herein,
faithfully and to the best of its ability. In this regard, subject to
paragraph 7 hereof, the Consultant shall devote such time and attention
to the business of the Company, as shall be determined by the
Consultant, subject to the direction of the President or Chief
Executive Officer of the Company.
a) The Consultant agrees, to the extent reasonably required in
the conduct of the business of the Company, and at the
Company's request, to place at the disposal of the Company its
judgment and experience and to provide business development
services to the Company including the following:
(i) Review business plans and projections.
(ii) Review financial data as its relates to financing.
(iii) Advise on the Company's capital structure and on
alternative for raising capital.
(iv) Review and advise on prospective mergers and
acquisitions, and on any financing required to
complete such transactions.
(v) Advise on issues relating to public offerings.
(vi) Review managerial needs.
(vii) Advise on issues relating to public relations.
(viii) Review feasibility of Online advertising for business
transactions.
2. Term - The Consultant's retention hereunder shall be for a term of
twelve months commencing on the date of this Agreement.
3. Compensation. The Consultant shall be compensated in accordance with
the following schedule:
(a) The Company shall pay to the Consultant a one-time fee of
$25,000.
(b) The Company shall grant to the Consultant a warrant (the
"Warrant"); to purchase 150,000 shares of the common stock of
the Company for a period of thirty-six (36) months at an
exercise price of $2.75 per share with a cashless exercise
provision.
The Warrant, shall possess anti-dilution provisions for stock
dividends, splits, mergers, sale of substantially all of the Company's
assets, sale of stock at below the then current exercise price of the
consultant's Warrant and for the other events (other than employee
benefit and stock option plans for the employees and advisors of the
Company and other than for all existing warrants or stock options).
The Company also agrees, to grant to the Consultant, subject to the
conditions listed below, the right to demand registrations of the
Common Stock issueable upon exercise of the Warrant referred to above,
on up two (2) occasions with all expenses of the first registration to
be borne by the Company and all expenses of
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the second registration to be borne by the Consultant; provided,
however, that such demand registration rights shall be exercisable
after twelve (12) months from the date of the Agreement.
The Company will, subject to the conditions listed below, to the extent
necessary to permit the sale of such shares, grant "piggy back"
registration rights to include the shares of the Common Stock issueable
upon exercise of the Warrant in any registration statement filed by the
Company under the Securities Act of 1933 relating to any underwriting
of the sale of Common stock or other security. Inclusion of such shares
is subject to the willingness of the managing underwriter(s) to include
said shares of Common Stock. In the event that the Company after the
date hereof grants registration rights to any other shareholder on
terms and conditions the Consultant deems to be more favorable than
these granted hereunder, the Company agrees to grant the same rights to
the Consultant.
4. Expenses - The Company agrees to reimburse the Consultant for
reasonable expenses incurred by the Consultant in connection with the
services rendered hereunder, including but not limited to the
Consultant's due diligence activities with respect to the Company. Any
such expenses shall require the prior written approval of the Company.
5. Indemnification - Since the Consultant will be acting on behalf of the
Company in connection with its engagement hereunder, the Company and
Consultant have entered into a separate indemnification agreement
substantially in the form attached hereto as Exhibit A and dated the
date hereof, providing for the indemnification of Consultant by the
Company. The Consultant has entered into this Agreement in reliance on
the indemnities set forth in such indemnification agreement.
6. Status of Consultant - The Consultant shall be deemed to be an
independent contractor and, except as expressly provided or authorized
in this Agreement, shall have no authority to act for or represent the
Company.
7. Other Activities of Consultant - The Company recognizes that the
Consultant now renders and may continue to render financial consulting
and other investment banking services to other companies, which may or
may not conduct business and activities similar to those of the
Company. The Consultant shall not be required to devote its full time
and attention to the performance of its duties under this Agreement,
but shall devote only so much of its time and attention as it deems
reasonable or necessary for such purposes. The Consultant shall give
written notice to the Company upon acceptance of any investment banking
agreement with other companies in similar industries and businesses.
The Consultant agrees to maintain as confidential any information it
procures in rendering consulting services hereunder regarding the
Company that is not generally known to the public, and agrees to not
transmit any of such information to: (i) any employees of Consultant
engaged in the trading of the Company's securities; or (ii) any
competitors of the Company for whom Consultant performs consulting
services. Consultant agrees that for so long as it provides services
under this Agreement or owns warrants or common stock of the Company
either directly or through affiliates, that neither Consultant nor its
affiliates will sell short any of the Company's securities, except to
maintain and orderly market as a market maker.
8. Control - Nothing contained herein shall be deemed to require the
Company to take any action contrary to its Certificate of Incorporation
or By-Laws, or any applicable statute or regulation, or to deprive its
Board of Directors of their responsibility for any control of the
conduct of the affairs of the Company.
9. Notices - Any notices hereunder shall be sent to the Company and the
Consultant at their respective addresses above set forth. Any notice
shall be given by registered or certified mail, postage prepaid, or
overnight receipted delivery service (such as Federal Express) and
shall be deemed to have been given when deposited in the United States
mail. Either party may designate any other address to which notice
shall be given, by giving written notice to the other of such change in
address in the manner herein provided.
10. Governing Law - This Agreement has been made in the State of Georgia
and shall be construed and governed in accordance with the laws thereof
without regard to conflicts of laws.
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11. Entire Agreement - This Agreement contains the entire agreement between
the parties, may not be altered or modified, except in writing and
signed by the party to be charged thereby and supersedes any and all
previous agreements between the parties.
12. Binding Effect - This Agreement shall be binding upon the parties
hereto and their respective heirs, administrators, successors, and
assigns.
13. Termination - Either party may terminate this Agreement in writing. In
the event of termination, compensation paid to Consultant, as outlined
above, will have been fully earned by Consultant for services rendered
as described herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
By: ___________________________
Title: ___________________________
GLOBAL CAPITAL SECURITIES CORPORATION
____________________________________ ____________________________________
Xxx Xxxxxx Xxxxxxxx X. Xxxxxx
Executive Vice President Executive Vice President
Corporate Finance
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