FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 7, 1997
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Date of Report (Date of earliest event reported)
ILX Incorporated
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(Exact name of Registrant as specified in its charter)
ARIZONA
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(State or other
jurisdiction of
incorporation)
33-16122 86-0564171
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(Commission File (I.R.S. Employer
Number) Identification No.)
2111 E. Highland, Suite 210, Phoenix, AZ 85016
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(Address of principal executive offices) (Zip Code)
(602) 957-2777
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Registrant's telephone number, including area code
Item 5. Other Events.
Effective January 7, 1997, ILX Incorporated ("ILX") and Texas Capital
Securities ("TCS") entered into a Letter Agreement regarding financial advisory
services (the "Letter Agreement") and an Option Agreement regarding options on
up to 500,000 shares of ILX common stock (the "Option Agreement"). The Letter
Agreement is dated January 7, 1997 and was executed on or about January 7, 1997,
and the Option Agreement is dated as of January 7, 1997 and was executed on or
about January 27, 1997. The Letter Agreement is attached to this Form 8-K as
Exhibit 10A and the Option Agreement is attached as Exhibit 10B.
Under the terms of the Letter Agreement, TCS is to assist ILX in
identifying potential sources of capital, including equity investors, develop a
business plan for ILX's subsidiary, Red Rock Collection Incorporated, advise ILX
as to structure, form and valuation of proposed business combinations and common
ventures and financing, counsel ILX regarding, and participate in, negotiations
and discussions with potential investors and regarding definitive acquisition
agreements or letters of intent, if any, and render other financial advisory
services to which the parties may agree. The Letter Agreement has a one-year
term, although at ILX's election, it may be extended for a longer period, on a
month-to-month basis.
In exchange for the above services under the Letter Agreement, ILX
granted TCS options to acquire 500,000 shares of ILX's common stock (the "Common
Stock") pursuant to the Option Agreement. The Option Agreement provides that TCS
receives options for up to 250,000 shares of the Common Stock exercisable at a
price of $1.25 per share on or before June 30, 1997 (the "First Option"). If TCS
exercises the First Option in full prior to its expiration date, TCS may
exercise options for up to 125,000 shares of the Common Stock exercisable at a
price of $1.75 per share on or before September 30, 1997 (the "Second Option").
If TCS then exercises the Second Option in full prior to its expiration date,
TCS may exercise options for up to 125,000 shares of the Common Stock
exercisable at a price for $2.00 per share on or before December 15, 1997 (the
"Third Option"). The term of the Third Option will be extended to the extent
that ILX extends the term of the Letter Agreement.
Concurrently with the execution of the Letter Agreement, an affiliate
and shareholder of ILX, Martori Enterprises Incorporated ("MEI"), also entered a
letter agreement with TCS regarding financial advisory services (the "MEI Letter
Agreement"). The MEI Letter Agreement is dated and was executed as of January 7,
1997. The MEI Letter Agreement is attached to this Form 8-K as Exhibit 10C.
Under the terms of the MEI Letter Agreement, TCS is to assist MEI to, among
other things, assess and evaluate MEI's existing and prospective investments and
identify business opportunities and investors, advise MEI as to form and
valuation of proposed business combinations and common ventures and financing,
counsel MEI regarding, and participate in, negotiations and discussions with
potential investors, render investment advice to MEI and its Defined Benefit
Pension Plan and such other financial advisory services to which the parties may
agree. The MEI Letter Agreement has a one year term, although at MEI's election,
it may be extended for a longer period, on
a month-to-month basis. In exchange for the above services under the MEI Letter
Agreement, MEI provided TCS with 50,000 shares of ILX common stock then owned by
MEI.
The above descriptions of the Letter Agreement, the Option Agreement
and the MEI Letter Agreement are qualified in their entirety by reference to
those Agreements.
Item 7. Financial Statements and Exhibits.
The Exhibits required by Item 601 of Regulation S-K have been supplied
as follows:
Exhibit
Numbers Description of Exhibit Page No.
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10A Letter Agreement 5
10B Option Agreement 7
10C MEI Letter Agreement 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ILX Incorporated,
an Arizona corporation
/s/ Nancy J. Stone
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Nancy J. Stone
President
Date: February 10, 1997