(Letter Head)
MARTORI ENTERPRISES INCORPORATED
January 7, 1997
Gentlemen:
It is understood that Texas Capital Securities will act as nonexclusive
financial advisor to Martori Enterprises Incorporated, an Arizona corporation
(the "Company") . Texas Capital Securities will assist the Company in assessing
and evaluating the Company's existing investments and prospective investments
(including those of the Company's Defined Benifit Pension Plan) and in
identifying potential business opportunities, partners and/or sources of
capital. Texas Capital's fees as described below, shall be payable whether or
not all of the above-stated activities are performed on behalf of the Company.
In this regard, Texas Capital Securities will undertake certain
activities on the Company's behalf, including the following:
(1) working with ILX Incorporated, a company with respect to which
the Company is the controlling shareholder and its
subsidiaries and affiliates, including but not limited to, Red
Rock Collection Incorporated;
(2) advising the Company as to structure, form and valuation of
proposed business combinations and common ventures and
financing;
(3) counseling with the Company as to strategy and tactics for
initiating discussions and negotiating with respect to
prospective investments, partners and/or sources of capital,
and, if requested by the Company, participating in such
negotiations and discussions;
(4) rendering investment advice to the Company and its Defined
Benefit Pension Plan and such other financial advisory
services as may from time to time be agreed upon by Texas
Capital Securities and the Company.
The Company agrees to pay Texas Capital Securities 50,000 shares of
common stock of ILX Incorporated, an Arizona corporation, which shall be free
trading shares currently traded on the NASDAQ Stock Exchange. Such shares
payable to Texas Capital shall be delivered to 5085 Westheimer #4520, Houston,
Texas 77056 within thirty days from the date of this agreement.
In addition to any fees that may be payable to Texas Capital under this
letter, the Company agrees to reimburse Texas Capital, upon request made from
time to time, for its actual out-of-pocket expenses, including reasonable legal
and other professional expenses incurred after the date hereof in connection
with Texas Capital's activities under this letter. Texas Capital will obtain the
Company's consent in writing before incurring any out-of-pocket expenses in
excess of $500.
The Company will furnish Texas Capital with such information as the
Company and Texas Capital believe appropriate to the assignment contemplated
hereunder (all such information so furnished being the "Information"). The
Company recognizes and confirms that Texas Capital (a) will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services contemplated by this letter
without independently verifying the same, (b) does not assume responsibility for
the accuracy or completeness of the Information and such other information, and
(c) will not make an appraisal of any assets of the Company, or any prospective
partner.
Texas Capital's engagement hereunder shall be for the initial term of
one year commencing upon the date hereof, subject to extension beyond such
initial one (1) year term on a month-to-month basis at the option of the
Company, it being understood that the provisions relating to the payment of fees
and expenses (to the extent such expenses are incurred prior to termination)
will survive the termination of Texas Capital's engagement for any reason
whatsoever.
It is understood and agreed to by Texas Capital that the services of Al
Garfield will be available to the Company in conjunction with services rendered
to ILX Incorporated for a minimum of four days per month, more or less, for the
term of the agreement contemplated hereunder.
Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to Texas Capital Securities the duplicate copy of this
letter enclosed herewith.
Very truly yours,
Texas Capital Securities
By:/s/ Mike McGinnis
-------------------------------------
Name: Mike McGinnis
----------------------------------
Title: Chief Operating Officer
---------------------------------
Accepted and Agreed to as of the date
first written above:
- -------------------------------------
Martori Enterprises Incorporated
By: /s/Joseph P Martori
--------------------------------
Name: Joseph P Martori
-------------------------------
Title: Chairman
------------------------------
/s/ Albert Garfield
- -------------------------------------
Albert Garfield