Exhibit 10.4
May 29, 2003
Jackson Walker L.L.P.
2435 N. Central Expressway, Suite 600
Richardson, Texas 75080
Attn: Richard F. Dahlson, Partner
Dear Rick:
Mobility Electronics, Inc., a Delaware corporation (the "Company"),
currently owes Jackson Walker L.L.P. ("JW") the sum of $361,265.55 for legal
services and fees with respect to JW's invoice numbers: (i) 741252 (dated
February 18, 2003) - $90,490.63; (ii) 744559 (dated March 13, 2003) -
$95,454.89; and (iii) $175,320.03 for the invoice for March legal fees and
services to be delivered this month (collectively, the "Owed Fees"). In
addition, the Company has incurred legal fees and expenses for the month of
April 2003 and for the month May 2003 to date in excess of $288,734.45 (for the
purposes hereof, such incurred fees, up to $288,734.45, are referred to as the
"Convertible Fees"). The Company acknowledges and agrees that it owes the Owed
Fees and the Convertible Fees to JW and has no dispute or claim against JW with
respect to the Owed Fees or the Convertible Fees. Previously, the Company
requested that JW consider converting the Owed Fees and the Convertible Fees
into shares of common stock, par value $0.01 per share, of the Company (the
"Common Stock"). JW indicated to the Company that it was willing to agree to the
proposed conversion, subject to due authorization by JW and the Company. After
discussions between JW and a representative of the Board of Directors of the
Company duly authorized to do so, JW and the Company have agreed to the
conversion of the Owed Fees and the Convertible Fees into an aggregate of
416,582 shares of Common Stock (collectively, the "Shares") in accordance with
the following terms.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and agreed, the Company and JW hereby agree as follows:
Conversion of Fees
1. Effective immediately, the Owed Fees are converted into 289,012 shares
of Common Stock and the Convertible Fees are converted into 127,570 shares of
Common Stock.
2. The Company will cause its transfer agent to deliver to JW a
certificate or certificates, as JW shall elect, representing the Shares (or, at
JW's discretion, the transfer agent will cause the Shares to be DTC transferred
into JW's brokerage account).
3. The Company hereby agrees to use its best efforts to file as soon as
possible after the date hereof to file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") which registers the resale of the Shares by JW under the
Richard F. Dahlson
April 4, 2003
Page 2
Securities Act of 1933, as amended (the "Act"), and to use its best efforts to
cause such Registration Statement to be declared effective by the SEC as soon as
possible thereafter. The Company will use its best efforts to maintain the
effectiveness of the Registration Statement for twenty-four calendar months from
and after the effectiveness thereof, and JW represents and warrants that it has
a present intention to sell all of the Shares within such period. The Company
and JW will cooperate with one another, and shall cause their respective agents
to cooperate, in any fashion reasonably necessary and consistent with applicable
law to facilitate the sale by JW of the Shares pursuant to the Registration
Statement or otherwise.
4. The Company acknowledges and agrees that if JW's fees and expenses
during April and May 2003 for all matters exceed $288,734.45, then such excess
shall be paid in cash according to JW's normal billing practice.
5. The Company and JW agree that they do not expect to convert additional
fees into shares of the Company's Common Stock, or any other security, in the
future.
General
1. This letter may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which shall constitute one and the
same instrument. Each of the party's represents and warrants to the other that
this letter and the transactions contemplated hereby have been duly authorized
and are the legal, valid and binding obligation of such party. The Company
understands and agrees that JW is representing itself and not the Company in the
negotiation of this letter and the transactions giving rise thereto, and that
the Company has been advised that it is entitled to seek counsel in connection
therewith, and may be best advised to do so.
2. The Company and JW have each given careful consideration, over an
extended period of time, to the transactions contemplated herein, and each
represents and warrants to the other that it is authorized to execute, deliver
and perform its respective obligations hereunder. Each of JW and the Company
represents and warrants to the other that it has determined, after careful
consideration, that the consummation of the transactions contemplated herein are
in its own best interest and consistent with the prudent conduct of its
business.
3. Neither JW nor the Company is relying upon the advice of the other with
respect to any matter related to the transactions contemplated hereby, and in
particular, JW is not relying upon the Company for advice with respect to the
advisability of making an investment in the Shares and the Company is not
relying upon JW for legal advice regarding the negotiation of this letter
agreement or the business transactions contemplated hereby.
4. JW is an "accredited investor" as that term is defined in Rule 501
promulgated under the Act and is acquiring the Shares with the understanding
that it will not resell or otherwise distribute such Shares in any transaction
not contemplated in the Registration Statement unless it can demonstrate to the
reasonable satisfaction of the Company that an
Richard F. Dahlson
April 4, 2003
Page 3
exemption from the registration provisions of the Act, and any applicable state
securities laws, is available therefor. Until the Registration Statement is
effective, JW intends to hold the Shares for investment and not with a view to
selling or distributing same except as contemplated in the preceding sentence.
If the terms set forth in this letter agreement are acceptable to you,
please sign and date the enclosed copy of this letter and return it to the
Company.
MOBILITY ELECTRONICS, INC.
By: /s/ Joan W. Brubacher
---------------------------------
Joan W. Brubacher,
Chief Financial Officer
AGREED TO AND ACCEPTED
JACKSON WALKER L.L.P.
By: /s/ Richard F. Dahlson
-----------------------------
Richard F. Dahlson, Partner