EXHIBIT
10.2
DOYLE
CAPITAL
LIMITED
1 March
2004
Strictly Private &
Confidential
The
Directors
American
Southwest Holdings Incorporated
4225 N. Brown
Ave
Scottsdale, AZ
85251
Dear
Sirs,
As a result of
changes to the overall structure of the transaction and the issues
raised by the SEC in relation to the inability to have a
“claw back” arrangement with proposed Warrants, we
submit an update to our mandate for your approval. We also wish to
confirm our confidence in American South West Holdings
Incorporated (“ ASW ” or
“the Company ”) and the long-term
commitment of Doyle Capital Limited (“ DCL
”) to the success of the Company. We set out below the scope
of our work, the basis of our remuneration and additional terms of
our engagement.
Preamble
DCL put a
proposal to the Company that it acquire all of the assets of an
Australian mineral sands company named Metal Sands Limited via a
Takeover Offer. The acquisition has since, with the considerable
assistance and involvement of DCL, been completed and ASW now owns
100% of the issued capital of Metal Sands. DCL has also provided
interim funding in the form of loans. To date DCL has not received
any fees other than the warrants proposed in the original mandate
and the loans have not been repaid.
DCL has
continued to work on the project on the basis that the substance of
the original mandate letter would be honoured by ASW after making
adjustments required by the SEC. We therefore write this letter,
setting out the fee arrangement for both work completed and in
progress.
Scope
of our work and work completed
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DCL acted as
corporate adviser to ASW in connection with the acquisition of the
shares of Metal Sands Limited (“MSA”). The scope of our
role is set out as Annexure 1.
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Doyle Capital Limited ABN 52 094 250
352
Level 30, 20 Bond Street Sydney NSW
2000 Phone + 61 2 9239 6000 Fax + 61 2 9239 6060
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DCL acted as
lead capital raiser to ASW. To date, DCL raised all the equity
capital required to complete the acquisition and has provided loans
to the Company for working capital purposes.
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DCL will act as
corporate adviser in respect of any other future capital raising
transactions with which ASW is involved, while the DCL mandate is
in place and on terms negotiated from time to time. DCL is
currently working on a capital raising which will fund the company
so that it can complete a pre-feasibility and feasibility study.
Our terms to complete this are contained herein.
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DCL will act as
the ongoing corporate adviser to ASW, unless this mandate is
terminated by ASW, which it may do by not less than three
months’ written notice to DCL effective at any time after
August 2007. Details of this role are set out in Annexure
2.
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DCL will act in
the capacity as the Company’s management until such time as
adequate capital has been raised and a complete management team is
put in place.
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Basis
of remuneration
For initiating
the MSA transaction, acting as corporate advisor in its completion,
the managing ASW and investor relations; DCL will be; or has been
remunerated as follows:
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A total fee of
6% to be paid on all equity raised. DCL will issue an invoice on
acceptance of this letter for the amount due hereunder, but is
happy for the amount due to remain unsettled until the capital
raising currently being contemplated is completed.
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A monthly
retainer of US$20,000 per month for four years commencing on 1
st January 2004 payable monthly in advance or in the
event that ASW is unable to pay this fee, this decision to be made
by DCL, the fee will be accrued until such time as ASW can pay the
retainer. The retainer will therefore have no impact on the cash
flow of ASW during the early stages of the company’s
development. In presenting these terms, we ask that you recognize
that DCL commenced work on this project some six months before 1
st January 2004.
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In recognition
of the successful takeover, our advice support and assistance to
date, we confirm that DCL has been issued with 15,000,000 warrants
in ASW at an exercise price of US4c per warrant. Each warrant will
convert into one ordinary share in ASW.
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For acting as
lead arranger in the raising of capital required to complete
pre-feasibility we will be remunerated as follows:
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A total fee of
6% to be paid on all capital raised. This fee will be paid on
completion of the capital raising.
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ASW will
reimburse DCL, on invoice, for
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the fees and
disbursements of legal and other advisers retained by DCL on
ASW’s behalf (provided that DCL will consult in good faith
with ASW before engaging any such advisers),
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the costs of
any printing and proofing of documents prepared and
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any other out
of pocket expenses incurred in connection with the any of the above
transactions (provided that DCL will seek ASW’s authorisation
before incurring any such expenses which individually amount to
more than AUD$15,000), together in each case with an amount equal
to any GST incurred thereon which is not otherwise recoverable by
GST.
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No fee payable to any other adviser by ASW or by
any other business in connection with the acquisition of MSA or the
events described above reduce or otherwise affect any fee or
commission payable hereunder.
Confidentiality
DCL undertakes
to keep confidential any confidential information which is provided
to it by ASW or MSA and which is not publicly available and not to
disclose su
