EXHIBIT 10.9
October 12, 2001
PERSONAL & CONFIDENTIAL
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▇▇. ▇▇▇▇ ▇▇▇▇▇
President
Case Financial, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
The purpose of this letter is to confirm our discussions and agreement regarding
(i) Mosaic Capital LLC and its affiliate Mosaic Capital Securities LLC
(collectively, "Mosaic") serving as Case Financial, Inc's ("Case") exclusive
investment banker, (ii) Mosaic facilitating the restructuring of Case, (iii)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ joining the board of Case following the restructuring, (iv)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ extending their loans; (v) Mosaic encouraging
the other Bridge Financing lenders to extend their loans, (vi) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇ agreeing to convert their loans to equity if and when the
insiders of Case do so and subject to Case completing the restructuring, and
(vii) Mosaic modifying its compensation pursuant to its September 29, 2000
agreement with Case as set forth below.
The term of this exclusive relationship for both M&A and capital raising shall
be 3 years. However, the exclusive relationship for capital raising is subject
to minimum amounts of equity and /or mezzanine capital being raised for Case as
follows: the lesser of $3 million or a revised amount as determined by the board
of directors during the first year following execution of this modification; and
for each year thereafter, the amount set by the board of directors for that
year. In the event the minimum amount of capital is not raised for Case during
any year, this agreement shall continue except as to Mosaic being the investment
banker for Case for capital raising purposes.
In exchange of these services, Mosaic shall be compensated as follows:
o 4% fee on equity and mezzanine capital raised (irrespective of
who originates the financing), provided Mosaic will be
flexible on the amount of its fees when large fees are being
paid to third parties; plus
o 1% fee on institutional debt capital committed; plus
o the greater of $40,000 or 2% on private debt capital funded;
plus
o 1% fee on the total consideration of each M&A transaction
during the first 18 months following the restructuring;
thereafter 2%. Where a financing is structured as a reverse
merger, say into a public shell, the fees for this transaction
will be the same as for raising equity capital, not the lesser
amount specified in this subsection;
o 250,000 shares of Case, as follows: one-half will be issued to
Mosaic immediately, and the will vest quarterly over the next
3 years, provided ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ remains available to advice
Case during this period. In the event of a merger or sale of
Case, these shares shall fully vest immediately.
o All vested and prospective warrants provided pursuant to the
September 29, 2000 agreement with Case shall lapse.
Except for the deletion of Sections 1 (services), 3.1 (monthly retainer), 3.2
(only as to warrants), all other terms of our September 29, 2000 agreement not
inconsistent with these modifications shall be incorporated herein by reference
and be made a part of this agreement.
Please confirm your agreement to these modifications by executing and returning
a copy of this letter.
Sincerely,
Mosaic Capital LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
ACCEPTED AND AGREED ON THIS ___ DAY OF OCTOBER, 2001.
Case Financial, Inc.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇ /S/ ▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇, President ▇▇▇ ▇▇▇▇▇▇▇▇, Co-Chairman
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Co-Chairman