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