<PAGE>
Exhibit 10.10
[LETTERHEAD OF SMALLCAPS ONLINE GROUP LLC]
February 1, 2000
C Me Run Corporation
5501 Lakeview Drive
Kirkland, WA 98033
Attention: Cameron Chell
Title: Chairman
Dear Sirs:
The purpose of this letter is to confirm the appointment of SmallCaps
Online Group LLC ("SmallCaps" or the "Advisor") upon the terms and conditions
set forth herein as financial consultant and advisor to C Me Run Corp. ("the
Company") in connection with the Company's general corporate financial advisory
and investor and media relations needs. In this connection, SmallCaps, in its
capacity as financial advisor, will assist the Company by undertaking certain
activities, to the extent that such activities are required by the status of a
project, including the following:
1) Meet with appropriate Company management to discuss and help the
Company formulate an appropriate strategy, familiarization of
product and technology, milestones, etc.;
2) Advise the Company with respect to business development and
technology licensing, including appropriate structure of a proposed
transaction and assist in the negotiations;
3) Advise the Company with respect to mergers and acquisitions,
including identification of counterparties, approach strategy and
structure, and assist in the negotiations;
4) Advise the Company with respect to financing strategy, including
public and private equity and debt;
5) Advise the Company with respect to financial and trade media
relations, including development of presentation materials,
introduction to and scheduling of meetings with investment managers
and brokers, and analysis of ownership;
6) Assist in such other capacity as may be reasonably requested by the
Company to effect the foregoing.
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C Me Run Corp.
February 1, 2000
Page 2
It is the practice of SmallCaps to provide financial advice with respect
to corporate finance and investor and media relations partially on a retainer
basis. Our retainer for services to be rendered hereunder is $9,000 per month,
payable at the beginning of each month, and 115,000 warrants (with cashless
exercise provisions) to purchase the Company's common stock at $5.00, with
registration for 50% of the total by June 30, 2000, and the remaining 50% by
December 31, 2000.
In the event a corporate finance transaction contemplated in Items 2) or
3) above is completed with any party which SmallCaps identified, approached or
negotiated with on behalf of the Company, the Company will pay SmallCaps a
success fee for its advisory services in accordance with the following schedule:
Percentage Fee Applicable
Aggregate Value Level to Value Level (%)
-------------------------------- -------------------------
First $5 million 5.00%
From $5 million thru $10 million 3.75%
From $10 million and above 2.50%
In the event a corporate finance transaction contemplated in Item 4) above
is completed with any party which SmallCaps identified, approached or negotiated
with on behalf of the Company, the Company will pay SmallCaps a success fee of
7% (plus warrant coverage, at sale price of the common stock, of 10%) of the
Aggregate Value of the transaction.
For the purposes of this letter, the term Aggregate Value shall mean the
total amount of cash and the fair market value of all other property paid or
payable, directly or indirectly, to the Company and its security holders. In
addition, Aggregate Value shall include the net amount of any debt and/or
contingent liability repaid or assumed by the purchaser from the Company, both
directly or indirectly.
For purposes of this letter, a "transaction" shall mean any transaction or
series or combination of transactions, other than in the ordinary course of
trade or business, whereby, directly or indirectly, a significant portion of the
capital stock of the Company or a significant portion of its respective assets
is transferred for consideration, including without limitation, a sale or
exchange of capital stock or assets, a lease of assets with or without a
purchase option, a merger or consolidation, a tender or exchange offer, a
leveraged buy-out, the formation of a joint venture, minority investment or
partnership, a licensing deal or any similar transaction.
In addition to any fees payable to SmallCaps under the terms of this
letter, the Company agrees to reimburse the Advisor, upon a monthly basis, for
its out-of-pocket expenses and pro rata unallocated overhead incurred in
connection with the Advisor's activities under this letter.
The Company agrees to indemnify SmallCaps and each of its respective
affiliates and their respective directors, officers, employees, agents and
controlling persons (each such person being an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
to which such Indemnified Party may become subject under
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C Me Run Corp.
February 1, 2000
Page 3
any applicable federal or state law, or otherwise, related to or arising out of
any transaction contemplated by this letter or the engagement of the Advisor
pursuant to, and the performance by the Advisor of the services contemplated by,
this letter and will reimburse any Indemnified Party for all expenses (including
counsel fees and expenses, whether incurred in connection with third party
claims or direct claims against the Company) as they are incurred in connection
with the investigation of, preparation for or defense of any pending or
threatened claim or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party. The Company will not be liable under the
foregoing indemnification provision to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted primarily from the Advisor's bad faith or gross
negligence.
If a transaction is consummated by the Company with any party which the
Advisor identified, approached or negotiated with on behalf of the Company
within two years from the date of termination of this agreement, or any
amendment or extension thereto, the Company agrees to pay the Advisor a
transaction fee determined as provided in the foregoing paragraphs.
This advisor's engagement hereunder may be terminated by either the
Company or the Advisor after twelve months from the date hereof upon the first
day of any month upon thirty days written notice to that effect to the other
party, it being understood that the provisions relating to the payment of fees,
expenses and indemnification will survive any such termination.
This agreement shall be construed and interpreted in accordance with the
laws of the State of New York.
If the foregoing is in accordance with your understanding, please confirm
acceptance by signing and returning to us the duplicate of this letter attached
herewith.
SMALLCAPS ONLINE GROUP LLC
By: /s/ Steven H. Rouhandeh
--------------------------------
Name: Steven H. Rouhandeh
Title: Chairman
C ME RUN CORP.
By: /s/ Cameron Chell
--------------------------------
Name: Cameron Chell
Title: Chairman
<PAGE>
Subject: C ME RUN / SMALL CAPS ONLINE
Date: Tue, 14 Mar 2000 14:00:32-0700
From: Leslie - [email protected]
To: "Chell, Cameron" - [email protected], [email protected],
[email protected]
Please see attached memo and draft working copies of the warrant agreement
and registration rights agreement.
Name: Small Caps.memo.doc
Small Caps.memo.doc Type: Microsoft Word Document (application/msword)
Encoding: base64
Name: small capsWarrant3-15.doc
small capsWarrant3-15.doc Type: Microsoft Word Document (application/msword)
Encoding: base64
Name: RegRightsSmallCapsWarrant3-15.doc
RegRightsSmallCapsWarrant3-15.doc Type: Microsoft Word Document
(application/msword)
Encoding: base64
