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EXHIBIT 10.4

 

EXCLUSIVE INVESTMENT BANKING AGREEMENT

 

THIS AGREEMENT (the “Agreement”) dated as of June 4, 2008 by and between Hawk Biometric Technologies, Inc.  with its principal address at 777 South Flagler Dr. STE. 800, West Palm Beach, FL 33401 (hereafter the “Company”) and Cresta Capital Strategies, LLC, with its principal address at 1175 Walt Whitman Road Ste 100 Melville, NY 11747 USA (the “Banker”).

 

W I T N E S S E T H:

 

WHEREAS , the Company desires to retain the Banker and the Banker desires to be retained by the Company pursuant to the terms and conditions hereinafter set forth:

 

NOW, THEREFORE , in consideration of the foregoing and the mutual promises and covenants herein contained, it is hereby agreed as follows:

 

SECTION 1.   Retention .  

 

(a)

The Company hereby retains the Banker to perform the services set forth in Section 1 (b) below during the one year period commencing on the date hereof, on an exclusive basis.  This exclusive Agreement shall automatically renew for additional ninety (90) days unless terminated in writing not less than thirty (30) days prior to the original or any subsequent expiration date (the original one-year period and any renewals thereof shall collectively hereafter be referred to as the “Term”). The Banker hereby accepts such retention and shall perform for the Company the duties described herein, faithfully and to the best of its ability.  During the Term, the Banker shall report directly to the President or to any other senior officer designated in writing by the President of the Company.

 

(b)

The Banker shall serve as the investment banker to the Company and render such advice and services to the Company as may be reasonably requested by the Company concerning equity and/or debt financings, strategic planning, merger and acquisition possibilities and business development activities including, without limitation, the following:

 

(i)

Study and review of the business, operations, and historical financial performance of the Company (based upon management’s forecast of financial performance) so as to enable the Banker to provide advice to the Company;

 

(ii)

Assist the Company in attempting to formulate the best strategy to meet the Company’s working capital and capital resource needs;

 

(iii)

Introduce the Company to potential lenders of funds as well as to potential investors (whether such investment is in the form of debt and/or equity financing or some combination thereof).  

 

(iv)

Assist in the formulation of the terms and structure of any reasonable proposed business combination transaction involving the Company, including without limitation, any merger or consolidation, sale of assets, or sale or exchange of stock (a “Business Combination”);

 

(v)

Assist in the presentation to the Board of Directors of the Company of any proposed transaction;

 

(vi)

Advise the Company in the preparation of press releases and other communications with the financial and investment communities;

 

(vii)

If applicable, assist the Company in its efforts to have its securities listed on a nationally listed stock exchange.

 

 

 

1

 



 

 

 

SECTION 2.

Compensation .

 

(a)

If during the Term (and for three (3) years after the Term with a “Banker Source” listed in Exhibit A) the Company completes an equity financing, including any securities convertible into equity (the “Equity Financing”), the Company shall pay the Banker at closing (i) commissions in cash in an amount equal to ten percent (10%) of the total gross cash proceeds of the Equity Financing (ii) a non-accountable expense allowance in cash equal to three percent (3%) of the total gross cash proceeds of the Equity Financing and (iii) warrants to purchase such number of shares of the Company’s common stock (the “Common Stock”) as shall equal ten percent (10%) of the shares of the Common Stock issued at closing or to be issued thereafter upon conversion of any convertible securities and/or exercise of any derivative securities (including, without limitation, warrants or options) issued in the Equity Financing on a post-financing, fully-diluted basis at an exercise price per share equal to the lowest per share price paid or payable on conversion by the Banker Source or at the same valuation as Banker Source and exercisable, in whole or in part, during the five (5) year period commencing on the issuance date of such warrants (the “Warrant Fee”).    

 

(b)

If during the Term (and for three (3) years after the Term with a “Banker Source” listed in Exhibit A) the Company completes a Business Combination with a public or private company, the Company shall pay the Banker at closing  (i) banking fees in cash in an amount equal to ten percent (10%) of the total gross cash proceeds and all other non-cash consideration of the Business Combination paid or received by the Company, (ii)  a non-accountable expense allowance in cash equal to three percent (3%) of the total gross cash proceeds and all other non-cash consideration of the Business Combination paid or received by the Company, and (iii) a Warrant Fee equal to ten percent (10%) of the shares of the Common Stock issued at closing or to be issued upon conversion of any convertible securities and/or exercise of any derivative securities (including, without limitation, warrants or options) issued in the Business Combination. The Warrant Fee, at the option of the Banker, may be exercised in cash or by an exchange of the “value” thereof as a “cashless exercise.”  For this purpose, the “value” of the Warrant Fee with respect to the right to acquire one share of common stock shall be the amount equal to the closing bid price of the Common Stock on the date of exercise less the exercise price. In the event the Company is not the surviving entity of the Business Combination, then the Warrant Fee shall be issued and convertible into the common stock of such surviving entity.  In the event such Banker Source exercises any warrants and/or options which were issued as part of said financing, Banker shall be paid a fee of five percent (5%) of the total gross proceeds of such warrant and/or option exercise.    

 

(c)

If during the Term (and for three (3) years after the Term with a “Banker Source” listed in Exhibit A) the Company completes any of the following capital related instruments (each a “Transaction”), the Company shall pay the Banker a cash fee at closing based upon the total face value of the Transaction in accordance with the following schedule:  (i) an amount equal to six percent (6%) of any and all consideration received by the Company in any debt financing not convertible into equity and a non-accountable expense allowance in an amount equal to one percent (1%) of any and all consideration received by the Company in such debt financing (“Senior Financing”); (ii) three percent (3%) of any revolving credit line; (iii) two percent (2


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