[LOGO APPEARS HERE]
EXHIBIT 10.9
Mr. Terry L. Colbert
Boles & Company, Inc.
Dulles Corporate Center
2323 Horse Pen Road, Suite 450
Herndon, Virginia 22071
Dear Terry,
This letter hereby extends the original term of the Investment Banking Agreement
("Agreement") dated December 14, 1995 between Boles & Company, Inc. ("BCI") and
American Telesource International, Inc. ("ATI") for one hundred twenty (120)
days from the date of execution of this letter.
The terms and conditions set forth in the Agreement apply to ATI and any
subsidiary, whether existing or created during the term of this Agreement. Any
and all references in the Agreement to ATI will be interpreted to include the
words "and/or its subsidiaries."
It is further understood that the Agreement is exclusive and prohibits any other
Investment Banking Agreement(s) to be executed by ATI or its subsidiaries
without express written consent from BCI during the term of the extension.
The Agreement allows BCI to be paid in shares of ATI stock in lieu of cash for
Engagement Fees. Shares of ATI stock are earned in the amount of $15,000 U.S.
per month calculated by taking the average previous 30-day trading price. ATI
will immediately arrange for shares to be issued to BCI in the amount of
$60,000 U.S. for Engagement Fees earned during the term of the original
Agreement.
This letter is understood and agreed to this 24 day of April , 1996, by and
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between:
[SIGNATURE ILLEGIBLE] [SIGNATURE ILLEGIBLE]
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Boles & Company, Inc. American Telesource Inc.
[SIGNATURE ILLEGIBLE] [SIGNATURE ILLEGIBLE]
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Its Its
[LETTERHEAD OF BOLES & COMPANY, INC.]
December 14, 1995
Mr. Craig K. Clement, Vice President
Corporate Development
American Telesource International, Inc.
12500 Network Boulevard, Suite 407
San Antonio, Texas 78249
Investment Banking Agreement
Dear Craig:
Following our recent meetings and conversations, you have requested that we
submit to you the terms and conditions (AGREEMENT") under which we are to
exclusively provide corporate finance and investment banking services to
American Telesource International, Inc. ("ATI"). Our assignment is to assist ATI
in the development of an overall financing strategy, raising capital, and
consummating strategic partnerships, and business development.
We will work with ATI management to: (i) assist in the development of a business
and financing strategy including the preparation of Financing Memorandum; (ii)
prepare supporting financial pro-formas and "use of proceeds" schedules under
differing scenarios, and (iii) perform such other services as are normal and
customary to facilitate the Financing/s. We may also be required to address
other matters including: (i) corporate organization and capital structure; (ii)
accounting treatment & presentation
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organization and capital structure: (ii) accounting treatment & presentation
of existing and projected revenues, backlog and profitability: (iii) tax & legal
structure options and other matters that may be identified from time to time.
Prior to approaching any potential partner, investor, or any other third party,
we will submit the name, as well as any written material to be used in
presentations, to ATI for its approval. ATI will have the unlimited right to
disapprove any party from receiving a presentation.
BCI shall identify and use its best efforts to structure and complete a
Financing/s transaction with one or more Financing/s sources and to develop
joint ventures and business relationships that harmonize with the business plan
of ATI. Such Financing/s sources may include a combination of potential
strategic partners and/or private capital institutions. We will arrange
meetings with interested parties, discuss and meet with prospective strategic
partners, assist management in negotiation of terms and conditions and otherwise
use our best efforts to arrange completion of one or more Financing/s under
terms and conditions acceptable to ATI.
ATI will use their best efforts to support and assist BCI in the execution of
its assignment, and shall provide BCI with full and timely disclosure of all
information, and shall not withhold from BCI any information, which may be
relevant including current financial data, changes in financial condition,
market information, litigation, pending litigation, management changes and other
information which might have a material effect on BCI performing its duties.
As compensation for providing its services, BCI shall receive an Engagement Fee
of $15,000 of ATI common stock for each month during the term hereof calculated
by taking the average previous 30-day trading price and Completion Fees as set
forth below:
A. PRIVATE CAPITAL TRANSACTIONS: Upon the successful negotiation and closing
of one or more equity Financing transaction initiated or arranged by BCI
with a PRIVATE CAPITAL source (under terms acceptable to ATI). BCI shall
receive certain COMPLETION FEES as follows:
(1) EQUITY FINANCING/S: A fee equal to 6.0% of the first $10.0 million of
each equity Financing/s and 4.0% of all amounts in excess of $10.0
million. Equity Financing/s are defined as the net proceeds to ATI
from the sale of common stock, preferred stock, subordinated and non-
subordinated debt instruments convertible into equity securities, or
other equity and participating instruments and/or the sale of assets
and/or liabilites of ATI.
(2) NON-CONVERTIBLE SUBORDINATED DEBT FINANCING: A fee equal to 4.0% of
the first $10.0 million of each non-convertible subordinated debt
Financing/s and 3.5% of all amounts in excess of $10.00 million. Non-
convertible subordinated debt Financing/s are defined as the total
face amount of credit facilities, guarantees or any non-convertible
debt instruments subordinated, or capable of being subordinated, to
any secured or unsecured creditors of ATI.
(3) SENIOR DEBT: A fee of 2.0% of all senior debt and non-subordinated
debt Financing/s with such senior debt and non-subordinated debt
Financing/s being defined as the total face amount of non-convertible
credit facilities, guarantees of debt instruments not subordinated to
any secured or unsecured creditors of ATI.
B. OTHER TRANSACTIONS: In the event that transactions and/or business
associations or arrangements are initiated by BCI and concluded with BCI's
active involvement, then BCI and ATI agree to negotiate in good faith the
amount of COMPLETION FEES due BCI under those circumstances as and when
they arise. In the event that a Financing transaction is concluded with
Paulson Investment Company. PULSAR. IPAC. Hantfen, Icahoff Inc./Cartyle
International Securities, and U.S. Securities and Futures during the Term
of this Agreement. BCI's success fee will be 30% of the fees enumerated in
paragraph A above.
C. WARRANTS TO PURCHASE STOCK. Upon the successful closing of each Financing/s
place pursuant to this AGREEMENT. ATI shall issue to BCI detachable
warrants to purchase up to 5% of the amount of stock of ATI associated with
each Financing (or equivalent securities of an equity Financing/s) with the
same registration rights. If any, per share paid by an investor
participating in the Financing/s If not exercised within a forty-eight
month period of following the closing of a Financing/s, the warrants shall
expire, all subject to private investment representations.
All Engagement Fees shall be credited to Completion Fees due BCI. Such
Completion Fees shall be due and payable within ten days of closing of any
Financing/s concluded by ATI: (I) during the term of this AGREEMENT, or (ii)
within twelve (12) months of the date of the termination, of this AGREEMENT,
with any institution, institution or other party with whom BCI has held
documented discussions pursuant to its assignment as set forth above.
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Upon the receipt of invoices, BCI shall promptly be reimbursed for all travel
expenses incurred by BCI in connection with its duties hereunder. BCI will not
incur any single item of expense in excess of $1,000 or total aggregate expenses
in excess of $5,000 without prior approval.
All non-public confidential information, and identified as such in writing,
provided the ATI to BCI or by BCI to ATI will be treated as confidential
information to any third party without first receiving written authorization
from the provider to make such disclosure.
This AGREEMENT shall commence on the date hereof and shall have an initial term
of one hundred twenty (120) days, and may be extended thereafter by the mutual
consent of the parties. Upon termination, all liabilities and continuing
obligations of each party to the other shall cease with the exception of those
provisions covering compensation due BCI and the treatment of each party's
confidential information.
If the above conforms with your understanding, kindly confirm your acceptance
and agreement by signing and returning a copy of this AGREEMENT to the
undersigned.
Sincerely,
/s/ J.Richard Knop
J. Richard Knop
Principal
AGREED & ACCEPTED By:
ATI, INC.
By: [SIGNATURE ILLEGIBLE]
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Date: 12-18-95
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