EXHIBIT 10.1
Letter of Agreement between Xxxxxxx Xxx, Inc. and CMI Capital LLC
July 15, 2004
Xx. Xxxx Xxxxxxx
Xxxxxxx Xxx, Inc.
000 Xxxx Xxx Xxxxx
Xxxxx X
Xxxxxx Xxxxx, XX 00000
Dear Xxxx:
CMI Capital, LLC understands that Xxxxxxx Xxx, Inc. is seeking a strategic
partner, strategic alliances, merger and acquisition candidates and consulting
services. Xxxxxxx Xxx, Inc. wishes to engage CMI Capital, LLC and CMI Capital,
LLC desires to assist Xxxxxxx Xxx, Inc. with respect to these transactions. A
suitable transaction is one that is accepted by Xxxxxxx Xxx, Inc. based on the
following terms:
1. CMI Capital, LLC will use its best efforts to introduce Xxxxxxx Xxx,
Inc. to potential sources for the transaction, on both a domestic and
international basis (the "Transaction Source"). The terms of any
transaction shall be as negotiated between Xxxxxxx Xxx, Inc. and the
Transaction Source, with no assistance by CMI Capital, LLC in effecting
any transaction(s). CMI Capital, LLC cannot guarantee a successful
conclusion to the negotiations with any such sources. CMI Capital, LLC
represents that no actions taken by it pursuant to this agreement shall
cause CMI Capital, LLC to be required to be registered as a
broker-dealer with the SEC, NASD, or any applicable State agency.
2. In order to better enable Xxxxxxx Xxx, Inc. to accomplish the
transaction, CMI Capital, LLC will assist Xxxxxxx Xxx, Inc. by
establishing and maintaining a list of parties who are prospective
Transaction Sources and review such list with Xxxxxxx Xxx, Inc. as
required.
In connection with this agreement, Xxxxxxx Xxx, Inc. represents and warrants
that all information given to CMI Capital, LLC, shall be complete and correct in
all material respects, to the best of Xxxxxxx Xxx, Inc.'s knowledge, information
and belief.
3. In consideration of the foregoing:
(a) Xxxxxxx Xxx, Inc. shall pay and/or reimburse to CMI Capital,
LLC promptly any out-of-pocket costs reasonably incurred by
CMI Capital, LLC with respect to this agreement, provided that
such out-of-pocket costs (individually or in the aggregate) in
excess of Xxxxxxx Xxx, Inc. approves $50 in advance.
(b) CMI Capital, LLC shall receive upon the execution of this
agreement a warrant to purchase 666,666 shares of Xxxxxxx
Xxx'x common stock at an exercise price of $0.25 per share.
CMI Capital, LLC shall be restricted from exercising the
warrant until January 15, 2005 and the warrant shall expire on
January 15, 2010. Xxxxxxx Xxx, Inc. will register the
underlying shares by July 15, 2005 and grants to CMI Capital,
LLC unlimited piggyback registration rights.
July 15, 2004
Xx. Xxxx Xxxxxxx
Page 2
4. This engagement may be terminated by either party at any time after 90
(ninety) days, by written notice. Provided however paragraph (3b)
remains in effect. CMI Capital, LLC agrees at such termination to
furnish Xxxxxxx Xxx, Inc. a list of sources brought in during the time
of this engagement.
5. Xxxxxxx Xxx, Inc. shall indemnify and hold harmless CMI Capital, LLC to
the full extent permitted by law from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable
attorneys' fees and expenses) arising out of or based upon this
engagement or any transaction, including without limitation, any
misstatement or omission, or alleged misstatement or omission, in any
offering memorandum or any other materials supplied or approved by
Xxxxxxx Xxx, Inc.. CMI Capital, LLC also agrees to indemnify and hold
harmless Xxxxxxx Xxx, Inc. under the same terms and conditions,
including any issues or claims arising out of CMI Capital, LLC's status
with the NASD, SEC, or any State agencies.
6. In the unlikely event that any legal action may be instituted with
respect to this engagement, such action shall only be instituted in a
court in the County of Orange, State of California, which court shall
have venue of a jurisdiction over any such action, and the parties
hereby stipulate to such venue and jurisdiction. With respect to any
such action, the prevailing party shall be entitled to recover all
costs of suit, including reasonable attorneys' fees.
7. This agreement shall inure to the benefit of and be binding upon the
parties hereto and their successors and assigns.
8. This agreement supersedes and replaces any previous agreements, whether
written or verbal between CMI Capital, LLC and Xxxxxxx Xxx, Inc.,
and/or it's subsidiaries or affiliates, including but not limited to
the agreement dated September 18, 2003 and its amendment dated June 30,
2004, and any liabilities under such agreements are considered
satisfied and any rights under such agreements terminated and
agreements cancelled. The warrant issued in the Amendment To Agreement
Dated September 18, 2003 is hereby canceled and replaced by the warrant
referred to in paragraph 3(b) hereinabove.
If the above engagement and agreement relating thereto are acceptable, would you
please execute the acceptance and acknowledgment hereinafter provided.
Very truly yours,
CMI Capital, LLC
Dated: July 15/04 By: Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
ACCEPTANCE AND ACKNOWLEDGMENT: Xxxxxxx Xxx, Inc. hereby accepts the above
engagement and agrees to the terms and provisions herein above set forth with
respect to such engagement.
XXXXXXX XXX, INC.
Dated: 7/15/04 By: Xxxx Xxxxxxx
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Xxxx Xxxxxxx
CEO
