EXHIBIT 10.1
FINANCIAL ADVISORY AND
INVESTMENT ADVISING AGREEMENT
This Agreement is made and entered into as this ____ day of __________,
1999 by and between Crown Capital Advisors, Inc. ("the Investment Adviser") and
iCrown Corporation ("the Company"), for the purpose of defining and
acknowledging the terms of this Agreement.
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EXCLUSIVITY. The Company hereby engages the Investment Adviser on an
exclusive basis for the term specified in Paragraph Two (2) hereof to
render services to the Company as its corporate finance consultant,
financial advisor and investment adviser upon the terms and conditions
set forth herein.
2. TERM. This Agreement shall be effective for a period of one year,
commencing upon the date this contract is executed by both parties and
may be extended as the parties shall mutually agree in writing, subject
to the establishment of arrangements for additional compensation and
other appropriate terms for such extension.
3. SERVICES TO BE PROVIDED. During the term of this Agreement, the
Investment Adviser shall provide the Company with such regular and
customary consulting advice as is reasonably requested by the Company,
provided that the Investment Adviser shall not be requested to
undertake duties not reasonably within the scope of the financial
advisory or investment advising services contemplated by this
agreement. It is understood and acknowledged by the parties that the
value of Investment Adviser's advice is not readily quantifiable, and
that Investment Adviser shall be obligated to render advice upon the
request of the Company, in good faith, and shall use its best efforts
to perform the contemplated duties as set forth herein. Investment
Adviser's duties may include, but will not necessarily be limited to,
providing recommendations and assisting in the following:
1. disseminating information about the Company to the investment
community at large;
2. rendering advice and assistance in connection with the
preparation of annual and interim reports and press releases;
3. assisting in the company's financial public relations;
4. arranging, on behalf of the Company, at appropriate times,
meetings with securities analysts of investment banking firms;
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5. rendering advice with regard to internal operations, including, but not
limited to:
1. the formation of corporate goals and their implementation;
2. the Company's financial structure and its divisions or
subsidiaries;
3. securing, when and if necessary and possible, additional
financing through banks, insurance companies or other
institutions; and
4. corporate organization and personnel;
6. rendering advice with regard to any of the following corporate finance
matters:
1. changes in the capitalization of the Company;
2. changes in the corporate structure;
3. redistribution of shareholdings of the Company's stock;
4. sales of securities in public or private transactions and the
structuring thereof;
5. alternative uses of corporate assets; and
6. structure and use of debt;
7. rendering advice or assistance with regard to any of the following
merger or acquisition activities:
1. the acquisition and/or merger of or with other companies;
2. divestiture or any other similar transaction; and
3. the sale of the Company itself (or any significant percentage,
assets, subsidiaries or affiliates thereof);
8. rendering advice and/or assistance with regard to bank financing or any
other financing from financial institutions or individuals (including
but not limited to revolving credit facilities, lines of credits, term
loans, rediscounted credit facilities, senior and junior loans, whether
collateralized or unsecured, etc.);
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9. acting as an information agent and electronic media agent in connection
with any tender offers or share exchange offers;
10. it is understood by both parties that Investment Advisor will not act
as an underwriter or placement agent for the Company's securities.
4. UNDERTAKINGS OF THE COMPANY. In order to facilitate financing, the
Company shall afford to the Investment Adviser and its representatives
full and complete access to all of its properties and records and the
full cooperation of management in the prompt preparation of a
confidential placement memorandum containing all of the information the
Investment Adviser may deem necessary to effect the successful
placement of the transaction.
5. COMPENSATION. In consideration for the services rendered by Investment
Advisers to the Company pursuant to this agreement (and in addition to
the expenses provided for in Paragraph Seven hereof), the Company shall
compensate the Investment Adviser as follows:
1. INITIAL RETAINER. None.
2. INITIAL WARRANTS. At closing of the first transaction, credit
facility or equity financing transaction, as contemplated
herein, the Company shall issue to the Investment Adviser
and/or its designees Warrants to purchase two percent (2%) of
the Company's fully diluted common stock at a nominal purchase
price (the "Warrant Option"). All Warrants shall expire five
(5) years from the date of issuance and shall have "piggy
back" and demand registration rights and anti-dilution
provisions acceptable to the Investment Adviser.
1. CASHLESS EXERCISE . In lieu of paying the shares
purchase price in cash, the Investment Adviser may,
at its option, deliver to the Company for
cancellation shares of common stock or other
outstanding securities of the Company convertible
into the Company's common stock (including rights
represented by this Warrant) that have a value equal
to the shares purchase price. The determination of
value shall be made by agreement between the Holder
and the Company, but, failing such agreement, by
reference to the trading price of the Company's
common stock on the date of exercise.
3. MERGER AND ACQUISITION FEE. If any transaction (as hereinafter
defined) is consummated during the Term of this Agreement with
any parties, whether introduced or contacted by the Company or
Investment Advisers during the term of this agreement, the
Company shall pay at the closing of each such transaction a
cash fee equal to the sum of:
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1. Five percent (5%) of the first ten million dollars
($10,000,000) of the aggregate consideration (as herein
defined) of a transaction;
2. Four percent (4%) of the second ten million dollars
($10,000,000) of the aggregate consideration of a transaction;
3. Three percent (3%) of the third ten million dollars
($10,000,000) of the aggregate consideration of a transaction;
and
4. Two percent (2%) of the aggregate consideration over thirty
million dollars ($30,000,000).
4. AGGREGATE CONSIDERATION is defined and computed as follows:
1. The total sale proceeds and other consideration received
(which shall be deemed to include amounts paid into escrow) by
the Company and/or its shareholders or by a target and/or its
shareholders upon the consummation of the transaction
(including payments made in installments), inclusive of cash,
securities, notes, consulting agreements and agreements not to
compete, plus the total value of liabilities assumed.
2. If a portion of such consideration includes contingency
payments (whether or not related to future earnings or
operations), aggregate consideration will include 75% of the
face value of such payment without regard to whether the
conditions for the payment of such contingent amounts have
been or may be satisfied.
3. If the aggregate consideration for the transaction consists in
whole or in part of securities, for the purposes of
calculating the amount of aggregate consideration, the value
of such securities will be the value thereof on the day
preceding the consummation of the transaction as the company
and investment adviser agree; provided, in the case of
securities for which there is a public trading market,
however, the value will be determined by the average last
sales price for such securities for the last twenty (20) days
prior to such consummation as determined by Investment Adviser
and communicated by Investment Adviser to the Company. If
there is no public trading market for such securities but
securities have been sold in a private placement within the
past twenty-four (24) months, the fair market value shall be
based upon the gross sales price in the last such private
placement. For other property received or receivable as a part
of the aggregate
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consideration and the parties are unable to agree, then each
of Investment Adviser and the Company will select an
investment banking firm respected in the merger and
acquisition field to determine a value and the midpoint
between the two values established by the two independent
experts will be the fair market value for the purpose hereof.
4. For purposes of this agreement, any of the following
transactions shall constitute a "transaction":
(1) the sale, outside of the ordinary course of business,
of the Company or any of its assets, securities, or
business by means of a merger, consolidation, joint
venture, exchange offer or purchase or sale of stock
or assets, or any transaction resulting in any change
of control of the Company or its assets or business;
or
(2) the purchase by the Company, outside of the ordinary
course of business, or another company or any of its
assets, securities or business by means of a merger,
consolidation, joint venture, exchange offer, tender
offer or purchase or sale of stock or assets.
(3) Notwithstanding the above, the proposed initial
transaction involving the public offering of the
Company's Securities as described by the Form S-4
filed by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., shall be aggregated
as a single transaction.
5. THIRD-PARTY DEBT PLACEMENTS. In the event Investment Adviser
is involved in originating a debt facility, inclusive of
revolving credit facilities, lines of credits, term loans,
rediscounted credit facilities, senior and junior loans,
whether collateralized or unsecured, etc., (the "credit
facility") with a bank or other institutional lender (the
"lending source"), the Company will pay Investment Adviser a
fee of two percent (2%) of the maximum amount of the Credit
Facility. In the event Investment Adviser is involved in
arranging an increase in a Credit Facility, the Company will
pay Investment Adviser a fee of two percent (2%) of the
increase from the maximum amount of the existing Credit
Facility to the maximum amount of the new Credit Facility.
6. STRATEGIC ALLIANCES AND PARTNERSHIPS. In the event Investment
Adviser introduces the Company to a joint venture partner or
customer and sales develop as a result of the introduction,
the Company agrees to pay a fee of two percent (2%) of total
sales generated directly from this introduction during the
first two (2) years following the date of the first sale.
Total sales shall mean cash receipts less any applicable
refunds,
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returns, allowances, credits and shipping charges and monies
paid by the Company by way of settlement or judgment arising
out of claims made or threatened against the Company.
Commission payments shall be paid on the 15th day of each
month following the receipt of customers' payment. In the
event any adjustments are made to the total sales after the
commission has been paid, the Company shall be entitled to an
appropriate refund or credit against future payments due under
this Agreement.
7. FAIRNESS OPINIONS, VALUATIONS AND OTHER SERVICES. Fees and
expenses payable to Investment Adviser with regard to fairness
opinions, valuations, and services not specifically set forth
herein will be determined by mutual agreement in writing at
such time as the nature and terms of such transactions are
determined.
6. PAYMENT OF FEES. All fees to be paid pursuant to this Agreement are due
and payable to the Investment Adviser in cash at the closing or
closings of any transaction as specified in Paragraph Three hereof. The
Company hereby irrevocably authorizes and instructs third party funding
sources, including Lending Sources and private equity groups, (the
"Funding Sources"), to pay directly to Investment Adviser cash sums
provided for in Paragraph Five above and further authorizes Investment
Adviser to notify the Funding Sources of this provision and the terms
of this agreement for purposes of this provision and payment of the
sums due under Paragraph Five of this Agreement. The Company agrees
that Investment Adviser is a direct beneficiary of any eventual
financing agreement between the Company and the Funding Sources. The
Company hereby expressly agrees that in the event any dispute or
disagreement arises with respect to the payment to Investment Adviser
under this agreement, that the Financing Sources shall immediately
place all disputed sums in an interest bearing Escrow account pending
resolution of the dispute. The Company hereby irrevocably authorizes
and instructs the Funding Sources to escrow such disputed sums. The
Company further agrees that any sums due under this agreement which are
not in dispute shall not be escrowed, but shall be paid upon closing to
Investment Adviser by the Funding Sources as provided for under the
terms of this Agreement.
7. CONTINUING OBLIGATION. In the event that this agreement shall not be
renewed or if terminated for any reason notwithstanding any such
renewal or termination, Investment Adviser shall be entitled to a full
fee as provided under Paragraph Five hereof, for any transaction for
which the discussions were initiated during the term of this agreement
and which is consummated within a period of twelve (12) months after
non-renewal or termination of this agreement.
8. EXPENSE REIMBURSEMENT. In addition to the compensation payable
hereunder, and regardless whether any transaction set forth in
Paragraph Three or Five hereof is proposed or consummated, the Company
shall reimburse Investment Adviser for all fees and disbursements of
Investment Adviser's counsel, travel and out of pocket expenses
incurred
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in connection with the services performed by Investment Adviser
pursuant to this Agreement, including without limitation, hotel, food
and associated expenses, telephone calls and legal expenses. Any
travel, accommodations or consultant fees in excess of $2,000 shall be
approved in advance by the Company.
9. CONFIDENTIALITY. The Company acknowledges that all opinions and advice
(written or oral) given by the Investment Adviser to the Company in
connection with Investment Adviser's engagement are intended solely for
the benefit and use of the Company in considering the transaction to
which they relate, and the Company agrees that no person or entity
other than the Company shall be entitled to make use of or rely upon
the advice of the Investment Adviser to be given hereunder, and no such
opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for
any purpose, nor may the Company make any public references to
Investment Adviser, or use Investment Adviser's name in any annual
reports or any other reports or releases of the Company without
Investment Adviser's prior written consent.
10. INDEPENDENT CONTRACTOR. The Company acknowledges that the Investment
Adviser is in the business of providing financial services and
consulting advice to others. Nothing herein contained shall be
construed to limit or restrict Investment Adviser in conducting such
business with respect to others, or in rendering such advice to others.
Investment Adviser shall perform its services hereunder as an
independent contractor and not as an employee of the Company or an
affiliate thereof. It is expressly understood and agreed to by the
parties hereto that the Investment Adviser shall have no authority to
act for, represent or bind the Company or any affiliate thereof in any
manner, except as may be agreed to expressly by the Company in writing
from time to time.
11. RELIANCE. The Company recognizes and confirms that, in advising the
Company and in fulfilling its engagement hereunder, the Investment
Adviser will use and rely on data, material and other information
furnished to Investment Adviser by the Company. The Company
acknowledges and agrees that in performing its services under this
engagement, Investment Adviser may rely upon the data, material and
other information supplied by the Company without independently
verifying the accuracy, completeness or veracity of same.
12. NOTICES. Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent (i) postage prepaid by registered mail, or (ii)
by facsimile, to the respective parties as set forth below, or to such
other address as either party may notify the other of in writing:
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iCrown Corporation Crown Capital Advisors, Inc.
Admiralty Tower Two Admiralty Tower Two
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13. INDEMNIFICATION. Investment Adviser and the Company have entered into a
separate letter agreement dated the date hereof ("the indemnity
letter") proving for the indemnification of Investment Adviser by the
Company in connection with Investment Adviser's engagement hereunder.
14. COUNTERPARTS. This agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same
original document.
15. ASSIGNABILITY AND MODIFICATION. This agreement is not assignable and
cannot be modified or changed, nor can any of its provisions be waived,
except by the mutual agreement in writing of all parties.
16. GOVERNING LAW. This agreement shall be governed by the laws of the
State of Florida.
17. SEVERABILITY. Each paragraph, term or provision of this agreement shall
be considered severable and if, for any reason, any paragraph, term or
provision is determined to be invalid or contrary to any existing or
future law or regulation, such will not impair the operation, or effect
the remaining portions, of this agreement.
18. DISPUTE RESOLUTION. The parties shall attempt amicably to resolve
disagreements by negotiating with each other. In the event that the
matter is not amicably resolved through negotiation, any controversy,
dispute or disagreement arising out of or relating to this agreement (a
"controversy") shall be submitted to a nationally recognized
arbitration association, such as the American Arbitration Association,
for final binding arbitration, which shall be conducted by a single
arbitrator (the "arbitrator") in ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, pursuant to
the American Arbitration Association Rules ("the rules").
Notwithstanding anything to the contrary contained in the Rules, the
Arbitrator shall not award consequential, exemplary, incidental,
punitive or special damages.
If any part shall desire relief of any nature whatsoever from any other
party as a result of any Controversy, such party will initiate such
arbitration proceedings within a reasonable time, but in no event more
than one (1) year after the facts underlying said Controversy first
arise or become known to the party seeking relief (whichever is later).
The failure of such party to institute such proceedings within said
period shall be deemed a full waiver of any claim for such relief.
Arbitrator may award the prevailing party its costs for the arbitration
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proceeding; including its reasonable attorneys' fees and costs. The
parties agree that the decision and award of the Arbitrator shall be
taken, but that such award or decision may be entered as a judgement
and enforced in any court having jurisdiction over the party against
whom enforcement is sought. Any equitable relief awarded under this
paragraph shall be dissolved upon issuance of the Arbitrator's decision
and order.
Notwithstanding the provisions for dispute resolution, in the event of
a breach or threatened breach by any party to this agreement, either
party shall be entitled in order to maintain the status quo and pending
the outcome of any arbitration pursuant to this agreement, seek an
injunction or similar equitable relief restraining either party, as the
case may be, from committing or continuing any such breach or
threatened breach or granting specific performance of any act required
to be performed without the necessity of showing that money damages
would not afford an adequate remedy and without the necessity of
posting any bond or other security. The parties hereto hereby consent
to the jurisdiction of the Federal district courts for the Southern
District of Florida, and the Florida state courts located in 15th
Circuit Court for any proceedings under this paragraph. The parties
agree that the availability of arbitration in the agreement shall not
be used by any party as grounds for the dismissal of an injunctive
action instituted by the other party.
Agreed to and accepted by:
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For iCrown Corporation For Crown Capital Advisors, Inc.
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Date Date
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