October 28, 2004 John Batton, CEO OptiCon Systems Suite 750
October
28, 2004
▇▇▇▇
▇▇▇▇▇▇, CEO
9001
Airport Freeway
Suite
750
N.
Richland Hills TX, 76180
Dear
▇▇▇▇:
This
is
to confirm the agreement between OptiCon Systems and the Officers/Directors
(collectively and individually referred to herein as the “Company”) and Abacus
Capital LLC (“AC”) under which AC agrees to provide services to the Company in
accordance with the terms and conditions set forth herein.
For
the
purposes of this Agreement, “Services” is defined as acting as consultant/finder
in the effort to source acquisition targets and to obtain capital for the
Company, or otherwise arrange for the Company to receive capital, through any
and all means, including without limitation (1) equity financing, (2) debt
financing, (3) merger, acquisition, business combination, or purchase and sale
of assets, or (4) a joint venture, strategic contract; provided, however, that
AC provides no assurances that its efforts will be successful.
For
the
purposes of this Agreement, “Consideration” is defined as the aggregate amount
of all cash, debt assumed, plus the fair market value of all securities and
other property, received by the Company, its agents, employees, stockholders,
affiliates, and subsidiaries, in connection with a transaction, of any nature,
arising from AC rendering of Services hereunder. For the purposes of this
Agreement: (i) the fair market value of any share or unit of any stock or other
security in which a public market exists shall be based on the selling price
of
the stock or security on the applicable public market as of the day of closing
of the transaction; and (ii) the fair market value of any share or unit of
any
stock or other security in which no public market exists and of all other
property shall be the value as agreed to by the parties or as determined by
an
independent appraiser chosen by the parties hereto.
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1.
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For
the term of this Agreement, the Company hereby engages AC to be its
non-exclusive agent to provide Services to the Company and AC agrees
to
furnish Services to the Company on a “best efforts” basis in consideration
of which the Company agrees to pay AC the following
compensation:
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| a. |
If
the Company consummates a transaction involving equity financing
or
convertible debt financing of any nature with a party who was introduced
to the Company through AC within twenty-four (24) months prior to
the
closing of such transaction, the Company shall pay a cash fee equal
to ten
percent (10%) of the aggregate Consideration to AC upon the actual
transfer of Consideration to the
Company.
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| b. |
If
the Company consummates a merger, acquisition, business combination
or
sale or purchase of substantially all assets with a party who was
introduced to the Company through AC within twenty-four (24) months
prior
to the closing of the transaction, then the Company shall pay a cash
fee
equal to five percent (5%) of the value of the first one million
dollars
($1,000,000), plus; 4% of the value of the second one million dollars
($1,000,000), plus; 3% of the value of the third one million dollars
($1,000,000), plus; 2% of the balance of the aggregate Consideration
to AC
upon the actual transfer of Consideration to the Company or its
stockholders, affiliates or
subsidiaries.
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| c. |
If
the Company enters into a joint venture, partnership, research or
development contract, or other contractual arrangement with a party
who
was introduced to the Company through AC within twenty-four (24)
months
prior to the execution of the contractual arrangement, then the Company
shall pay a fee to AC at such time or times as Consideration arising
from
such contractual arrangement is actually received by the Company,
equal to
ten percent (10%) of the Consideration received during a period of
ten
years following the execution of such contractual arrangement, and
five
percent (5%) of the Consideration received by the Company thereafter
to a
maximum of five hundred thousand dollars
($500,000).
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| d. |
If
the Company consummates a transaction involving non-convertible debt
financing of any nature with a party who was introduced to the Company
through AC within twenty-four (24) months prior to the closing of
such
transaction, the Company shall pay a cash fee equal to five percent
(5%)
of the aggregate Consideration to AC upon actual transfer of Consideration
to the Company.
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| e. |
If
the Company consummates a Transaction with a party who was introduced
to
the Company through AC that charges a fee not covered under the AC
Agreement, the Company shall pay a transaction fee to AC upon the
actual
transfer of Consideration to the Company equal to Two percent (2%)
of the
aggregate Consideration.
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| f. |
The
Company agrees to issue AC common share warrants of the Company in
an
amount equal to two (2) times the cash fees earned based on the selling
price of the common shares on the public market as of the day of
closing
of any transaction. The warrants shall have a two (2) year term and
be
convertible to registered common
shares.
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| g. |
The
Company shall pay to AC a non-refundable retainer fee equal to ten
thousand dollars ($10,000) per month during the term of this agreement
and
any extensions thereafter. The first month’s retainer fee is due upon the
first actual transfer of Consideration to the Company. Cumulative
monthly
retainer fees shall be deducted from cash fees
earned.
|
| h. |
The
Company agrees to issue AC non-restricted common shares of the Company
in
an amount equal to twenty percent (20%) of the issued and outstanding
common shares of the Company post merger upon acceptance of a minimum
of
five hundred thousand dollars ($500,000) in aggregate Consideration
or
upon acceptance of an agreement to merge.
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2.
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For
the purposes of this Agreement, a party shall be considered to have
been
“introduced to the Company through AC” if such a party was introduced to
the Company either directly or indirectly by AC, its agents or employees,
or if the transaction between the Company and such party arose from
or was
made possible by, in whole or in part, any efforts of AC, its agents
or
employees.
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| 3. |
This
Agreement shall continue until the later of six (6) months from the
date
of this Agreement or until terminated by either party, with or without
cause, upon delivery of written notice by one party to the others;
provided, however, that termination shall not limit, modify, or otherwise
affect the rights of AC to receive its entire compensation pursuant
to the
terms of Paragraph 1 above in connection with any transaction executed
by
the Company with a party who was introduced to the Company through
AC
prior to termination; provided further, that the Agreement shall
be
automatically renewed for successive three (3) month periods six
(6)
months after the date of this Agreement unless either party terminates
this Agreement by delivery of written notice from one party to the
other.
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4.
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The
Company agrees to furnish all information and documents to potential
investors and otherwise take all actions necessary to comply with
all
applicable federal and state securities laws and other
laws.
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5.
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In
providing Services to the Company under this Agreement, AC shall
be an
independent contractor, and no party to this Agreement shall make
any
representations or statements indicating or suggesting that any joint
venture, partnership, or other such relationship exist between AC
and the
Company. AC shall not be entitled to make any commitments or create
any
obligations on behalf of the Company without the Company’s written
consent.
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-2-
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6.
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Each
party hereto (the “indemnifying party”) agrees to indemnify and hold
harmless the other parties hereto, their agents, employees, officers,
stockholders, and affiliates, and each person who controls any such
indemnified parties from and against any and all losses, claims,
damages,
liabilities and expenses (including reasonable costs of investigation
and
attorneys fees) arising out of or based upon any actual or alleged
breach
or default of, misrepresentation in, or failure under, any warranty,
representation, or obligation made by or imposed upon the indemnifying
party in this Agreement or in connection with any transaction contemplated
hereunder.
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7.
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Each
party to this Agreement hereby represents and warrants to the other
that
the execution of and performance under this Agreement by such party
shall
not violate, conflict with, or result in a breach or default under,
any
agreement, understanding or commitment of any nature, or any state,
federal or local ordinance, statute or other law to which such party
is
bound or subject.
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8.
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The
Company will not make any representation, statement, or warranty
in any
instrument or document executed or furnished in connection with a
transaction referenced herein, which contains or will contain any
untrue
statement of material fact, or omit to state a material fact which
is
necessary to make the statements and information contained therein
not
misleading.
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9.
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The
representations, warranties, and obligations contained in this Agreement
shall survive the closing of any transaction referenced herein, and
the
termination of this Agreement pursuant to the terms of Paragraph
3.
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10.
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If
any party hereto shall bring any suit or action against another for
relief, declaratory or otherwise, arising out of this Agreement,
the
prevailing party shall have and recover against the other party,
in
addition to all court costs and disbursements, such sum as the court
may
adjudge to be a reasonable attorney’s
fee.
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11.
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The
Company shall reimburse AC whether or not any transaction contemplated
hereunder is consummated, for all of its reasonable and necessary
pre-approved out-of-pocket expenses incurred that are related to
its
efforts hereunder. Invoices for out-of-pocket expenses shall be supported
by appropriate documentation. Expenses shall be promptly reimbursed
to AC
upon presentation of invoices to the Company by AC. ▇▇▇▇ earned shall
be
paid out of the funds received at
closing.
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12.
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All
obligations of Company and Shareholders, or either of them, hereunder
are
joint and several.
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13.
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This
Agreement shall inure to the benefit of and be binding upon AC and
the
Company and any of their respective heirs, successors and assigns.
This
Agreement is intended to be and is for the sole and exclusive benefit
of
the parties hereto and their respective heirs, successors and assigns
and
for the benefit of no other person, and no other person shall have
any
legal or equitable right, remedy or claim under or in respect of
this
Agreement. This Agreement may not be assigned without the prior written
consent of all parties hereto.
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If
this
letter correctly sets forth the entire understanding between AC and the Company
with respect to the foregoing, please so indicate by signing below, at which
time this letter shall become a binding contract.
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Sincerely,
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Accepted
and agreed as of the date first above written:
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ABACUS
CAPITAL LLC
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▇▇▇▇▇
▇. ▇▇▇▇▇, Manager
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▇▇▇▇
▇▇▇▇▇▇, CEO
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