Exhibit
10.1
8725
West Higgins Road, Suite 900
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Capstone
Investments Advisory Agreement
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This letter
agreement (this “Agreement”) will confirm the
arrangements under which CapStone Investments
(“CapStone”) is authorized to act as placement agent
(“Agent” or “Agency”) for Enable
Holdings, Inc., an entity formed under the laws of Delaware,
and its affiliates and subsidiaries (“ENAB”) in
connection with a proposed offering of debt
and/or equity securities of ENAB (the
“Securities”). The terms of the offering
will be set forth in a separate term sheet upon completion of due
diligence. The terms of this letter will expire at 5:00 p.m. on
Friday, May 22, 2009 , unless fully executed by duly authorized
representatives of both parties.
The services provided by CapStone are separated
into the following basic areas: advisory and deal
financing. A description of CapStone’s functions
and activities in each of these areas and the applicable
compensation to CapStone are described as follows:
ENAB agrees to
provide the Agent with certain information which may also include
confidential informational, including up-to-date financial data on
its operations. This information shall be furnished in a timely
manner and shall be complete and accurate to the best of
ENAB’s knowledge. ENAB authorizes the Agent to commence such
due diligence investigations which in the Agent’s reasonable
good faith judgment would be required to verify ENAB’s
ability to complete the transactions, make the required
representations, perform its obligations under the proposed
covenants and cause the projected payments to be made under the
terms of the Securities. ENAB and its management will allow the
entities set forth on Exhibit A the opportunity to ask ENAB
questions concerning the operations and financial statements of
ENAB. ENAB will also represent and warrant that the information
provided by ENAB and the Offering Materials do not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated or necessary to make any statement not
misleading.
The Agent will: (a) review the due diligence
files prepared by ENAB, its counsel and/or other 3
rd parties for the transaction, including any and
all required opinion letters; (b) provide ENAB with a commercially
reasonable due diligence checklist to assist in the preparation of
the required due diligence files; (c) make comments where
appropriate and may request additional documentation and, (d)
provide other advisory services upon written request.
It is recognized and understood that there is no
assurance that the Agent’s due diligence review process will
confirm that ENAB should, in the Agent’s judgment, proceed
with the proposal. If the Agent decides not to proceed with the
proposal based on its due diligence review, it will discuss those
factors supporting this conclusion. Before a negative conclusion is
arrived at, the Agent will discuss its concerns with ENAB to
determine if the proposal can be modified or adjusted in order to
allow the Agent to proceed with this engagement. If the Agent or
ENAB determines not to proceed with the proposal, than this
Agreement will automatically terminate and ENAB and the Agent have
no further obligations hereunder.
Should ENAB elect to engage CapStone and in
order to begin the Due Diligence portion of this engagement, please
execute this Agreement and remit non refundable retainer fees in
the amount of TEN THOUSAND DOLLARS ($10,000) due and payable by
wire transfer according to the wire transfer instructions
below. Also, please send a signed original to Scott
O’Sullivan, CapStone Investments, 12760 High Bluff Drive, San
Diego, California 92130.
Depending on the type of financing facility
finally agreed to, ENAB and/or the investor(s) will prepare or have
prepared all necessary offering, transaction, and/or loan
documents. This transaction may consist of a single or multiple
tranches and may have one or more closing dates.
As compensation for the services of CapStone
hereunder, ENAB shall pay to CapStone the following cash fees
pursuant to the following wire transfer instructions:
• Capstone
shall receive a cash fee equal to seven percent (7%) of the total
cash invested in any form of equity or equity-linked
financing.
• Capstone
shall receive a cash fee equal to four percent (4%) of the maximum
possible drawdown amount of any debt or debt-related
financing
• Capstone
shall receive a cash fee equal to two and one half percent (2.5%)
of the total cash consideration or transaction amount of any form
of debt repurchase or restructuring.
In addition to
the cash fees set forth above, ENAB shall also issue the following
to CapStone as additional compensation under the terms of this
Agreement:
• ENAB
shall issue to Capstone a warrant to purchase common shares of ENAB
common stock equal to seven percent (7%) of the maximum number of
shares that could be issued pursuant to any financing, including
investor warrants or, in the absence of any equity-linked issuance,
seven percent (7%) of the maximum amount of cash that could be
received under the financing divided by the closing price of
ENAB’s common stock per a reputable information resource
(i.e.: Bloomberg) on the day the financing is
closed. This warrant will have an exercise price equal
to the minimum exercise price of any warrants received by investors
in such Financing or in the absence of any warrant issuance, the
closing price for the common stock of ENAB on the day of the
closing of the financing.
All cash fees will be due and payable at Closing
and shall be a condition of Closing. All shares and
warrants shall be issued at Closing and shall be a condition of
Closing.
ENAB hereby retains CapStone, and CapStone
agrees to act, in accordance with the provisions of this paragraph,
as an exclusive representative and exclusive placement agent in
connection with the private issuance or sale of the Securities
during the term of this Agreement. Capstone from time to
time will present to ENAB a limited number of Potential Investor
names whom Capstone believes might be interested in investing in
ENAB and if ENAB approves the name, such names will be added into
the Exhibit A. In connection with this engagement,
CapStone’s services may include, upon ENAB’s request,
(i) assistance in preparation materials (which may include a
private offering memorandum or institutional group selling
document) describing ENAB, its business, operations, assets and
prospects (the “Offering Materials”) and (ii)
identifying and contacting potential purchasers of the Securities.
ENAB will remain the sole owner of all Offering Materials,
including, without limitation, all project related information, all
contracts, revised or otherwise, all legal opinions and/or
documents, and all other materials associated with the
project. Notwithstanding the forgoing, CapStone agrees
that ENAB may continue to pursue its efforts to raise equity
capital from retail investors including those listed on Exhibit
B. In addition, CapStone agrees to reduce its fees by
50% for any investments made by Victory Park and its related
funds.
CapStone acknowledges and agrees that ENAB shall
retain the sole and exclusive right to accept or reject any
proposed sale of Securities and ENAB shall not incur any liability
to CapStone for such rejection. ENAB may terminate the
offer and sale of the Secur
