ex10_9.htm


    

    



     

    Investment Banking
Agreement

     

    This
Investment Banking Agreement (the "Agreement") is made and entered into as of
August 1, 2006 by and among, Capital City Petroleum, LLC
(the "Company") having its place of business at 1335 Dublin Road, Suite 122-D,
Columbus, OH 43215; with and Capital City Partners Southeast
LLC, (“CCPSE”) having its place of business at 1550 Madruga Avenue, Suite
305, Coral Gables, Flordia 33146.

     

    Engagement of
Services

     

    The
Company hereby retains CCPSE, for the purpose of providing to the Company
Consulting and Investment Banking services, specifically with the mandate
to:

     

    
      	
              A)  

            	
              Assist
      the Company in developing a business plan, financial model and
      capitalization plan, to be utilized by the Company for a
      financing,

            


    

    
      	
              B)  

            	
              Lead
      the merger and acquisition efforts on behalf of the
    Company,

            


    

    
      	
              C)  

            	
              Assist
      the Company in "going public" and in the roll-up/conversion to equity of
      current Capital City Energy Fund investors into the
    Company,

            


    

    
      	
              D)  

            	
              Complete
      a meaningful institutional/strategic financing of growth capital for the
      Co., and

            


    

    
      	
              E)  

            	
              Create
      an exit strategy for the Company's investors through a liquidity event
      and/or the strategic sale of part or all of the
  Company.

            


    

    


    CCPSE
agrees to be retained to provide such services described in Section One below on
an exclusive basis pursuant to the terms and conditions set forth
herein.

     

    Section One: Statement of
Work

     

    CCPSE
will, on behalf of the Company, perform the following Investment Banking and
Advisory Services:

     

    (a)                 CCPSE
shall be available for advice, and shall advise the Company with respect to such
financial matters relating to: capital raising, whether from institutional and
other investors or lenders or from the private placement of debt instruments or
equity securities; public offerings of debt or equity; structure of debt or
equity financings; acquisitions and other business ventures; stockholder and
securities dealer relations;

     

    (b)                 CCPSE
will become educated in the business of the Company, with an emphasis on the
Company's business model, corporate structure and equity ownership. CCPSE will
be available to perform advisory services including; general business and
financial analysis, corporate strategy development, transactional feasibility
analysis, and to assist the Company in the preparation of any descriptive
materials to be issued by the Company.

     

    (c)                 CCPSE
will act as investment banker in executing the approved business plan. In this
capacity, CCPSE will identify potential investors, strategic partners and or
acquisition or merger candidates. CCPSE will contact these firms and investors,
on behalf of the Company, and will qualify them as appropriate partners. CCPSE
will assist the Company in structuring and negotiating the transactions. The
Company agrees not to solicit any of CCPSE's strategic partner introductions for
capital, without the appropriate written approval by CCPSE.

    


    
      
        
           


        

        
           

          
            

          

        

        
           


        

      

    

     

    

     

     

    For the
duration of this Agreement, on an exclusive basis, CCPSE will have the ability
to engage in substantive discussions with potential investors, acquirers, merger
or acquisition candidates, strategic partners and/or joint venture partners on
behalf of the Company. CCPSE will provide the Company with the names of parties
to whom it intends to disclose proprietary information, which will be required
to enter into a Confidentiality Agreement with the Company and CCPSE prior to
receiving any proprietary or confidential information of the Company. In
performing its services herein, CCPSE shall be entitled to rely without
investigation upon all information that is provided by the Company, which
information the Company hereby warrants that to the best of its knowledge and
information shall be complete and accurate in all material respects, and not
misleading. CCPSE in no way guarantees that the Company will successfully raise
capital.

     

    Section
Two

    Work
Responsibilities

     

    It is
understood that CCPSE's services will be rendered both on and off-site of the
Company. Subject to CCPSE providing reasonable prior notice, the Company agrees
to provide an office, secretarial support, and time of key employees while CCPSE
is on-site performing the services described in Section One. In the performance
of the services covered by this Agreement, the services and the hours CCPSE
works, will be entirely within CCPSE's control. CCPSE will share that
information if the Company requests it.

     

    Section
Three

    Duration

     

    The
duration of this Agreement (the "Term") shall extend for a period of eighteen (18) months from the
execution date first written above, and/or signed. The Company may extend the
term of this agreement for three (3) additional six (6) month
increments.

     

    Section
Four

    Payment

     

    The
Company will pay a non-refundable initial retainer of
Ten-Thousand Dollars ($10,000) with the signing of this agreement, and
agrees to pay monthly
consulting fees of Ten-Thousand Dollars ($10,000) for services to be
performed by CCPSE, commencing with the signing of this agreement. The monthly
consulting tees shall be due and payable every thirty (30) day period that this
agreement is in full force.

     

    Upon the
execution by the Company and CCPSE of any of the following mandates: A) assist
the Company in developing a business plan, financial model and capitalization
plan to be utilized by the Company for a financing, B) lead the merger and
acquisition efforts on behalf of the Company, C) assist the Company in "going
public" and in the rol1~up/conversion to equity of current Fund investors into
the Company, D) complete a meaningful institutional/strategic financing of
growth capital into the Company, and E) create an exit strategy for the
Company's investors through a liquidity event and/or the strategic sale of part
or all of the Company, the Company will grant CCPSE a warrant to acquire the equivalent
of five percent (5%) of the shares of the Company's fully diluted common stock
exercisable at the value of the aforementioned transaction price or as mutually
determined. The warrants can be exercised at any time during the duration
of this contract for up to five (5) years from the issuance of these warrants.
The Company shall grant CCPSE standard piggyback registration rights to the
common stock underlying the Warrants. The Company also agrees to a cashless
exercise feature, in the event of the sale or merger of the Company (as defined
by change of control definitions)

    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    

    


     

    Section
Five

    Additional
Transactions

     

    For
purposes of this Agreement, Additional Transaction(s) shall mean any additional
"Debt Financing", "Subordinated Debt Financing", "Private Placement, Capital
Infusion, Equity Investment or Financing", or a "Purchase, Merger or Sale
Transaction", which may occur during this engagement, or within eighteen (18)
months after the termination or expiration of this agreement. These additional
transaction(s) are for default purposes only. It is anticipated that any
additional transactional fees will be negotiated separately with the company, to
retlcct any unique circumstances that may exist. CCPSE will utilize one of its
broker-dealer relationships in order to be engaged, and to receive any potential
success fees above and beyond the consulting and advisory services contemplated
herein.

     

    Debt
Financings. For the purpose of this Agreement. a "Debt Financing" shall
include any transaction (or series of transactions) which directly or indirectly
results in: (i) senior and working capital lines, or other similar borrowings of
the Company normally undertaken by businesses in the course of operations which
includes capital received in consideration for notes, bonds, equipment leasing
transactions, or debentures not expressly defined as "junior" or "subordinated"
(discussed below), (ii) a combination of any such debt described above together
with the issuance and warrants/options, or (Hi) convertible "debt, as described
above, to equity" securities. In the case of a "Debt Financing" where the source
of debt financing, excluding subordinated debt financing, closes during the Term
of this Agreement, or within eighteen (18) months after the termination or
expiration of this agreement, CCPSE or its broker-dealer nominee shall receive
upon closing of the transaction, a lump-sum fee computed by taking the total
amount of the Debt Financing multiplied by two (2%) percent.

     

    Subordinated
Debt Financings. For the purpose of this Agreement, a "Subordinated Debt
Financing" shall mean any transaction (or series of transactions) which directly
or indirectly results in the Company receiving proceeds from any debt financing
junior or subordinated to other debt, Le., repayable in the case of liquidation
only after senior debt with a higher claim and priority has been satisfied. This
type of debt may be but not necessarily characterized by such features as
interest only payments for a specified period of time, equity participation
through warrants/options and other instruments, and convertible features. In the
case of a "Subordinated Debt Financing" where the source of subordinated debt
t1nancing closes during the Term of this Agreement, or within eighteen (18)
months after the termination or expiration of this agreement, CCPSE or its
broker-dealer nominee shall receive upon closing of the transaction, a lump-sum
fee computed by taking the total amount of the Subordinated Debt Financing
multiplied by four (5%) percent.

     

    Equity
Raise. For the Purpose of this Agreement, a "Private Placement, Equity Capital
Infusion, or any Equity Investment or Financing" which directly or indirectly
results in the transaction closing during the Term of this Agreement, or within
eighteen (18) months after the termination or expiration of this agreement,
CCPSE or its broker-dealer nominee shall receive upon closing of the
transaction, a lump-sum consulting fee computed by taking the total gross
proceeds from the Private Placement, Equity Capital Infusion, or any Equity
Investment or Financing multiplied by ten (10%) percent. If the Equity component
is in the form of a Private Placement Memorandum (PPM), CCPSE or its
broker-dealer nominee shall receive upon closing of the transaction, a lump-sum
fee computed by taking the total gross proceeds from the Private Placement
multiplied by ten (10%) percent, plus a non-­accountable expense allowance
of three (3%) percent multiplied by the total gross proceeds from the Private
Placement.

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    

     

    Purchase,
Merger or Sale Transaction If an Purchase, Merger or Sale Transaction is
consummated by the Company during the Term of this Agreement, or a period of
eighteen (18) months after the termination or expiration of this Agreement,
CCPSE or its broker-dealer nominee shall receive upon closing of the transaction
a fee computed by taking the Total Consideration received multiplied by a
percentage determined pursuant to the following schedule, assuming the minimum
fee will be One ­Hundred Thousand dollars ($100,000) per
transaction:

     

    
      	
              Total
      Consideration

            	
              Fee

            
	
              $0
      to $1,999,999

            	
              6.0%

            
	
              $2,000,000
      to $3,999,999

            	
              5.0%

            
	
              $4,000,000
      to $5,999,999

            	
              4.0%

            
	
              $6,000,000
      to $7,999,999

            	
              3.0%

            
	
              $8,000,000
      or greater

            	
              2.0%

            


    

    


    A
Purchase, Merger or Sale Transaction (or series of transactions) which directly
or indirectly results in (i) the acquisition by the Company of all or any part
of the existing capital stock of such third party or all or any part of the
assets of such third patty (or any securities convertible into or exchangeable
for or other rights to acquire all or any part of such capital stock or assets),
or (ii) the acquisition by such third party of all or any part of the existing
capital stock of the Company or all or any part of the assets of the Company
(including any securities convertible into or exchangeable for or other rights
to acquire all or any part of such capital stock or assets), including in each
such case, without limitation, any sale or exchange of capital stock or assets
(including cash and other liquid assets), any merger or consolidation (including
any such transaction in which the third party is the surviving entity) or any
similar transaction outside of the ordinary course of the Company's
business.

     

    For the
purposes of this Agreement with respect to a Purchase, Merger or Sale
Transaction, Total Consideration shall mean and be computed as the total sale
proceeds and other consideration received by Company, its stockholders, directed
beneficiaries, or any newly formed entity owned or participated in by Company
("New Company") an including, but not limited to; cash, securities. notes,
debentures, agreements not-to-compete, including contingent and installment
payments; consideration for assets owned by subsidiaries or entities controlled
by the Company; the total value of liabilities specifically assumed by the
aequirer; and any other tangible net benefit to the Company, its shareholders or
directed beneficiaries aU as valued and set forth in the transaction documents,
unless otherwise agreed in writing.

     

    Payment
of Fees and Warrants All fees due to CCPSE or its broker-dealer nominee
pursuant to this Agreement arc payable in cash. All fees are payable to CCPSE at
the closing date of the subject transaction. To the extent amounts are payable
to Company after the closing date of a transaction, the Company shall pay CCPSE
or its broker-dealer nominee the applicable fee associated with such amounts at
the time such amounts arc actually received by Company. Any fees due and not
paid when due will accrue interest at the rate of six percent (6.0%) annually,
and the Company will be responsible for reasonable legal expenses, including
without limitation appellate expenses (at both the trial and appellate level)
incurred by the other in disputing such fees.

     

    In
addition, upon closing of a Transaction(s), including Debt Financing(s),
Subordinated Debt Financing(s), Private Placement, Capital Infusion, Equity
Investment, Financing or Purchase, Merger or Sale Transaction(s) CCPSE is
entitled to a fee as described herein above, the Company or any
successor

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    

     

    


    entity will grant to CCPSE a warrant to
purchase the common stock of Company (the "Warrant"), at a purchase price
per share (the "Purchase Price") equal to the higher of a) if a public company,
the average trailing 30 day closing bid price of the Company's stock as
calculated for the period ending on the day immediately prior to the closing
date of such Transaction(s), or b) the price per share paid by investors ill
such Transaction(s), or (c) the lesser of the most recent transaction price per
share paid by investors or an independent, third-party valuation. The formula
for determining the amount of warrants to be issued, convertible into voting
common shares, shall be calculated by taking the success fee paid to CCPSE in
such Transaction and dividing it by the Purchase Price, as described above.
Warrants shall be issued at the closing of the Transaction, and can be exercised
at any time by CCPSE in whole or part over five (5) years. The Company or its
successor entity agrees to reserve sufficient amount of common shares to cover
the exercise of the Warrant. Company shall grant CCPSE standard piggyback
registration rights for any common stock issued to CCPSE by the Company and any
common stock underlying the Warrants. The Company also agrees to a cashless
exercise feature. in the event of the sale or merger of the Company (as defined
by change of control definitions).

     

    The
Company will reimburse CCPSE tor all pre-approved business expenses ("Expenses")
incurred by CCPSE in the performance of the work as described in this Agreement,
to include all reasonable travel expenses for Company approved meetings, not to
exceed One-thousand ($1,000) dollars per month. Expenses will be billed and paid
on a monthly basis, beginning on the first of each month beginning with the
first calendar month following the date of this Agreement.

     

    Section
Six

    Status
of CCPSE; Indemnification

    


    CCPSE is
and shall be an independent contractor and is not and shall not be deemed or
construed to be an employee of the Company by virtue of this Agreement. Neither
CCPSE, nor the Company shall hold CCPSE out as an agent) partner, officer,
director, or other employee of the Company in connection with this Agreement or
the performance of any of the duties, obligations or performances contemplated
hereby and CCPSE further specifically disclaims any and all rights to an equity
interest in or a partnership with the Company by virtue of this Agreement or any
of the transactions contemplated hereby, except as specifically provided herein.
CCPSE specifically acknowledges and agrees that it shall have no authority to
exccute any contracts or agreements on behalf of the Company or any other person
that, directly or indirectly, through one or more intennediaries, controls, is
controlled by or is under common control with the Company (an "Affiliate") and
it shall have no authority to bind the Company or its Affiliates to any
obligation (contractual or otherwise). For purposes of this Agreement, (a) the
tcrm "control" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting interests, by contract or otherwise and
(b) the term "person" shall mean an individual, partnership, corporation,
limited liability company, limited liability partnership, tmst, joint venture or
other entity.

     

    In the
event that CCPSE becomes involved in any capacity in any action, proceeding or
investigation in connection with any matter referred to in this Agreement not
resulting from or relating to CCPSE's recklessness, negligence, bad faith or
intentional wrongful acts, the Company will reimburse CCPSE for reasonable legal
and other expenses as such expenses are incurred in connection therewith. The
Company will also indemnify and hold harmless CCPSE against losses, claims,
damages or liabilities to which CCPSE may become subject in connection with any
matter referred to in this Agreement, exccpt to the extent that any such loss,
claim, damage or liability results from the recklessness, negligence, bad faith
or intentional wrongful acts of CCPSE performing the services that are the
subject of this Agreement. The provisions of this Section 7 shall survive any
termination or expiration of this Agreement for a period of twenty-four (24)
months.

     

    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    

    
 

    Section
Seven

    Governing
Law

     

    The laws
of the State of Florida shall govern this Agreement. Any controversy or claim
arising out of, or relating to, this Agreement, to the making, performance, or
interpretation of it, shall be settled by arbitration in Columbus, Ohio unless
otherwise mutually agreed upon by the parties, under the commercial arbitration
rules of the American Arbitration Association then existing, and any judgment on
the arbitration award may be entered in any court having jurisdiction over the
subject matter of the controversy. If any legal action or any arbitflltion or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorney's fees and other costs
incurred in that action or proceeding, in addition to any other relief to which
it or they may be entitled. The Governing Law provisions shall survive any
termination of this Agreement.

     

    Section
Eight

    Integration

     

    This
Agreement contains the entire Agreement among the parties and supersedes all
prior oral and written agreements, understandings, and representations among the
patties. No amendments to this Agreement shall be binding unless executed in
writing by all the parties.

     

    Section
Nine

    Confidentiality

     

    Except as
otherwise required by law, the terms of this Agreement shall not be disclosed by
CCPSE to any third party, with the exception of potential investors as part of
their due diligence efforts, without the prior written consent of both parties
to this Agreement. CCPSE shall keep confidential and not disclose any non-public
information provided to it by or on behalf of the Company or by any third-party,
in relation to any of the services provided or to be provided by it to the
Company, except that it may disclose any such information to its advisors (which
persons shull be bound by similar confidentiality obligations and for which
CCPSE shall accept full responsibility in compliance with this Section) or as
required by law or with the prior consent of the Company. The restrictions in
the preceding sentence shall not apply to information that becomes publicly
available through no fault of CCPSE or information that CCPSE may be required by
law to disclose.

     

    IN
WITNESS WHEREOF, the parties to this Agreement have duly executed it on the day
and year first above written.

     

    
      	
              Capital
      City Partners Southeast LLC

            	
              Capital
      City Petroleum, Inc.

            
	
               

               

              /s/ Joseph A.
      Smith

              Joseph
      A. Smith

              Chief
      Executive Officer

            	
               

               

              /s/ Keith
      Kauffman

              Keith
      Kauffman

              President

            
	
              Date:
      August 1, 2006

            	
              Date:
      August 1, 2006