EXHIBIT 10.1
CONSYGEN, INC.
10201 SOUTH 51ST STREET, SUITE 140
PHOENIX, ARIZONA 85044
Carriage House Capital May 19, 1997
2530 South Rural Road
Tempe, AZ 85282
Attn: Howard Baer, President
Dear Howard:
We have received your proposal that we issue you 300,000 shares of
stock. We appreciate the services you have rendered to ConSyGen over the last
year.
We shall issue to you 300,000 shares, as you have requested, upon the
following terms and conditions:
1. These shares shall be in full satisfaction of all amounts due now or in
the future under any existing arrangement between Carriage House
Capital, Inc. and/or its affiliates ("CHC"), and ConSyGen, Inc., a
Texas corporation, and/or its wholly-owned subsidiary, ConSyGen, Inc.,
an Arizona corporation, and their respective affiliates (together, the
"Company"), including, without limitation, $1,153,000 of indebtedness
of ConSyGen, Inc., an Arizona corporation, to CHC, acquired by CHC from
certain persons who loaned money to ConSyGen, Inc., an Arizona
corporation.
2. All agreements between CHC and the Company shall terminate, except that
CHC shall until June 14, 1998 (i) have a right of first refusal with
respect to any debt or equity financing of the Company and (ii) without
further compensation provide such consulting services to the Company as
the Company may reasonably request. The terms of the CHC first refusal
right shall be as set forth below. The Company shall provide written
notification to CHC of the terms and conditions of the proposed
financing (the "Notice"). If CHC does not agree in writing within five
(5) business days of receipt of the Notice from the Company, to provide
the Company with financing in the amount set forth in the Notice and on
terms and conditions at least as favorable to the Company as those set
forth in the Notice, then the Company shall be free to proceed with the
financing which is the subject of the Notice. In addition, if any
individual previously introduced to the Company by CHC makes an
investment in the Company after the date hereof, CHC shall be entitled
to reasonable compensation in an amount to be agreed by CHC and the
Company.
3. CHC shall execute and deliver to Wolinetz, Gottlieb and Lafazan, P.C.,
the Company's independent accountants, such documents as they require
in connection with their audit of the financial statements of the
Company.
4. CHC shall execute such further documents as are reasonably required by
the Company to give effect to this letter agreement.
If these terms are acceptable to you, please sign where indicated below
and return to me.
AGREED AND ACCEPTED BEST REGARDS,
Carriage House Capital
ConSyGen, Inc.
/s/Howard Baer
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Howard Baer, President
/s/Robert L. Stewart
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Robert L. Stewart, Chairman
CARRIAGE HOUSE CAPITAL
1223 E. BROADWAY, SUITE #1
TEMPE, AZ 85282
(602) 731-9100
FAX 731-9565
June 14, 1996
Mr. Robert Stewart
International Data Systems
10201 S. 51st Street
Phoenix, AZ 85044
Dear Bob:
As per our conversations, Carriage House Capital (CHC) and
International Data Systems (IDS) have agreed to fund IDS as follows:
1. CHC will seek loans up to $500,000 for IDS subject to IDS filing a 504K
public offering, which will be arranged by CHC. The lenders will
receive one warrant to purchase additional shares of IDS after one
year, at $5 per share for each two dollars loaned to the company.
2. CHC will orchestrate a 504K public offering, to be filed in New York,
for $1,000,000, which is the maximum allowed under the 504
registration. This will be for 2,000,000 shares at $.50 per share.
These shares will have warrants attached to purchase one warrant for
each two shares purchased. The warrants will not be exercisable for one
year and will be at $5 per share.
3. All warrants issued for the above will be exercisable at $5.00, will
not be exercisable for one year unless registered by the company at a
later date, will be callable after the first year, and will be good for
two years.
4. CHC will arrange for meetings in New York with brokers and investors to
assist in the selling of the 2,000,000 shares. CHC will also arrange
for at least three NASD member firms to maintain a market in the shares
of IDS.
The final capitalization would be as follows:
Presently issued (rounded off) 6,750,000 shs 57.5%
Employee Options 1,725,000 14.7%
IPO 2,000,000 17.05%
OPTIONS @ $5.00 (Maximum) 1,250,000 10.66%
TOTAL-Fully diluted 11,725,000 100.00%
TOTAL FUNDS WHEN EXERCISED:
IPO $1,000,000
WARRANTS 6,250,000
TOTAL FOR 28% $7,250,000
FEES and COSTS (approx) 200,000
June 14, 1996
Page 2
IDS Agreement
COMPENSATION
1. CHC will receive the balance of the original 300,000 shares at $.01
per share.
2. Ten (10%) per cent of the funds raised will be held for brokers fees.
This would be $100,000.
3. CHC would receive $50,000 in compensation and expenses of $7,500 upon
completion of the IPO.
4. CHC would receive 300,000 warrants at $5.00. Part of these would be
retained by CHC and the remainder paid to brokers for their assistance.
These warrants would be transferable.
AGREEMENT BY IDS
IDS agrees that if for any reason the 504K cannot be completed, but a minimum of
$200,000 has been raised in loans, CHC would be allowed to proceed with a
reverse merger into a public company.
IDS agrees that loans previously given to IDS by CHC or HOWARD BAER can be
converted into loans on the 504K and further converted into the IPO.
Upon completion of the 504K, IDS agrees to retain CHC as a non-exclusive
financial consultant at the monthly rate of $3,500 per month for a period of 24
month. CHC will provide continued market support, broker and shareholder
relations, and additional equity funding when and if required by IDS. The
company also agrees to give CHC the right of first refusal on any future
financing the company may need during a period of two years from the date of
this agreement.
IDS agrees that CHC will have the exclusive right to finance IDS for 90 days
subject to a minimum of $100,000 being received by IDS by the close of business
Friday, June 21, 1996.
If you are in agreement with the terms of our working relationship, please sign
where appropriate and return one duplicate original of this letter. We will
begin working upon completion of a signed agreement.
Sincerely, Consented and agreed to:
INTERNATIONAL DATA SYSTEMS
/s/Kevin C. Baer /s/Robert L. Stewart
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Kevin C. Baer, Vice President Robert L. Stewart, President
CARRIAGE HOUSE CAPITAL, INC.
351 Newbury Street 1223 East Broadway, Suite #1
Boston, MA 02115 Tempe, AZ 85282
(617) 536-1920 (602) 731-9100
Fax (617) 536-6062 Fax (602) 731-9565
October 26, 1995
Mr. Robert Stewart
International Data Systems
10201 S. 51st Street
Suite 140
Phoenix, AZ 85044
Dear Bob:
Based on our conversations, Carriage House Capital, Inc., (CHC) is
prepared to assist IDS in securing the funds presently needed by IDS in a two
step process. The first would be to raise funds needed immediately for monthly
expenses on an "as needed" basis, while at the same time arranging for more
substantial, long term financing via a public offering or private Investors.
After making several inquiries around Wall Street as to the
availability of firms to participate in an IPO, I firmly believe that a reverse
merger into a blind pool, followed by a secondary offering in the spring of next
year would be much more beneficial to you in order to retain the greater amount
of equity in the company. I will explain the benefits of this the next time we
meet.
It is my understanding that the company needs approximately $100,000
per month to meet its negative cash flow. Our goal would be to raise this amount
monthly while giving up as little equity as possible.
Based on these assumptions, CHC is prepared to assist you in the following:
1. Raise equity financing at the rate of a minimum of $100,000 per month
for at least six months (IDS determines the length of time), while
seeking permanent, long term financing of approximately $5 to $7
million. The first raising of at least $100,000 is to be completed
within 60 days of the effective date of this agreement. The minimum
term may be reduced if proportionately larger raisings are achieved
within the term.
2. Locate and acquire an existing public company to merge with, if that is
the direction that we (CHC and IDS) decide to go in.
3. Locate an underwriter to do an IPO for $5 million or more, or, if
merged with an existing public company, to do a secondary offering of
$5 million or more.
In consideration of the consulting services to be provided in conjunction with
all of the above, CHC would be entitled to compensation as follows:
4. An option to purchase a maximum of 300,000 IDS shares at $0.01 per
share on the following basis:
a. upon the signing of this agreement - 100,000 shares;
b. upon the raising of each successive $100,000 until a total
raising of $400,000 is reached, a further 50,000 shares until
the balance of 200,000 shares is reached.
In the event that IDS completes its financing independently of CHC, CHC
will have the right to purchase the remainder of this share entitlement at $0.01
per share.
5. A cash payment of 10% of the gross proceeds of any equity financing
received by the company by any party introduced by CHC, other than an
underwriter, upon receipt of such financing.
6. A cash payment of 5% of the gross proceeds of any equity financing
received by the company by any party whose investment is made with
CHC's direct involvement.
7. A cash payment of 3% with a minimum of $150,000 upon completion of the
above-noted public offering arranged by CHC.
It is agreed that if the company completes a full equity financing as set forth
above by any source first introduced by CHC within two years, then IDS will be
obligated to pay CHC, at the closing of such financing, an amount equal to the
compensation outlined herein.
Upon completion of a full equity financing as set forth above, IDS agrees to
retain CHC as a non-exclusive financial consultant at the monthly rate of $3,500
per month for a period of 24 months. CHC will provide continued market support,
broker and shareholder relations, and additional equity funding when and if
required by IDS. The company also agrees to give CHC the right of first refusal
on any future financing the company may need during a period of two years from
the date of this agreement.
IDS is to retain the right to purchase, within one year of the date of this
agreement, the initial allotment of 100,000 IDS shares for a sum of $25,000 if
CHC has not been able to obtain at least $100,000 in equity financing for IDS.
If you are in agreement with the terms of our working relationship, please sign
where appropriate and return one duplicate original of this letter to us. We are
prepared to begin working as soon as the agreement is signed.
We look forward to working with you and if you have any questions please do not
hesitate to call us.
Sincerely,
CARRIAGE HOUSE CAPITAL, INC. Consented and agreed to:
INTERNATIONAL DATA SYSTEMS
/s/Howard R. Baer /s/Robert L. Stewart
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Howard R. Baer, President Robert L. Stewart, President