Exhibit H
[On Xxxxx Xxxxxxx Companies Letterhead]
April 6, 1995
Syntro Corporation
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
Attention: X. Xxxxxx Xxxx, President & CEO
This letter confirms and sets forth the agreement between Syntro Corporation
(the "Company") and Xxxxx Xxxxxxx Inc. ("Xxxxx Xxxxxxx") regarding the
engagement of Xxxxx Xxxxxxx by the Company, on the terms and conditions set
forth herein, to act as the exclusive financial advisor (the "advisor") to the
Board of Directors of the Company (the "Board of Directors") in connection with
the consideration by the Board of Directors of a possible Transaction (as
defined below) and, if the Board of Directors elects to pursue any Transaction,
in connection with the execution of such Transaction. For the purposes of this
agreement, a Transaction refers to any sale, exchange or other disposition of
20% or more of the ownership of the Company, or any sale, exchange or other
disposition by the Company of 20% or more of its assets or earning power
including, but not limited to, a license or exchange of the Company's product or
technology rights, and shall include a merger, consolidation or other similar
transaction
Xxxxx Xxxxxxx will have the exclusive right to act as the Company's advisor in
connection with the consideration of a possible Transaction for a period of two
months (the "Exclusive Period") from the date you sign this letter unless the
exclusive period is extended by the mutual consent of both parties.
This engagement notwithstanding, Xxxxx Xxxxxxx understands that at this time the
Board of Directors is only investigating certain specific Transactions and that,
beyond such investigation, the Board of Directors has not determined to
undertake any course of action and that it may elect not to implement any
recommendation of Xxxxx Xxxxxxx. Furthermore, Xxxxx Xxxxxxx understands that at
this time the Board of Directors has not authorized Xxxxx Xxxxxxx to conduct a
search of possible alternative transactions or to solicit any new third parties
with respect to determining their interest in acquiring any of the business or
assets of the Company or engaging in a Transaction.
As advisor to the Company, Xxxxx Xxxxxxx will provide the following services:
(i) Review the financial condition and prospects of the Company on the basis
of such information as is made available to them by the Company.
(ii) As requested, arrange and participate in meetings with any potential
parties that have previously expressed interest in a possible Transaction
("Potential Parties") and otherwise perform such services as Xxxxx Xxxxxxx
believes desirable to develop Potential Parties' interests.
(iii) Assist in negotiations with Potential Parties to a Transaction as
reasonably requested by the Company.
(iv) Advise the Company on the structure of any proposed Transaction.
(v) In the event requested by the Company, render an opinion to the Board of
Directors of the Company as to the fairness, from a financial point of
view, of the consideration to be paid to the stockholders of the Company
pursuant to a Transaction. The fee for such opinion shall be $100,000
payable to Xxxxx Xxxxxxx upon delivery of the opinion by Xxxxx Xxxxxxx to
the Board of Directors, it being understood that such a fee shall be
credited against the payment set forth below. The Company and Xxxxx
Xxxxxxx understand the opinion will be intended only for the benefit of
the Company, will not be used by any other party, nor, except as
contemplated in the following sentence, will the opinion be publicly
disseminated or distributed without Xxxxx Xxxxxxx'x prior written consent.
Xxxxx Xxxxxxx understands that its fairness opinion may be described in
and annexed to proxy materials distributed to the Company shareholders.
The Company hereby agrees that Xxxxx Xxxxxxx will have the right to review
and approve the form and content of any reference to Xxxxx Xxxxxxx or its
opinion in such proxy materials or in other written materials distributed
by the Company or filed by the Company with any governmental agency,
securities exchange or the NASD.
The Company will cooperate fully with Xxxxx Xxxxxxx in connection with our
financial review and analysis and the rendering of our opinion and advising with
respect to the Transaction, and will provide Xxxxx Xxxxxxx with such information
concerning the Company as Xxxxx Xxxxxxx deems necessary for our financial review
and analysis and the rendering of our opinion and advising with respect to the
Transaction. All such information provided by the Company will be complete and
accurate and not misleading. The opinion shall state that Xxxxx Xxxxxxx will
rely upon the information furnished to it by the Company or upon information
which is publicly available, and that Xxxxx Xxxxxxx assumes the accuracy and
completeness of such information and has not attempted independently to verify
any of such information.
The terms of any Transaction will be subject to the Company's approval and Xxxxx
Xxxxxxx will not make any agreement or commitment for the Company without prior
authorization from the Company.
Any expansion of the services provided by Xxxxx Xxxxxxx to the Company beyond
those included in (i) through (v) above would require a separate agreement
between Xxxxx Xxxxxxx and the Company.
In the event a Transaction is consummated pursuant to an agreement or commitment
which is entered into (i) during the Exclusive Period or (ii) during the 12
months following termination of the Exclusive Period to any person who engages
in serious discussions with either Xxxxx Xxxxxxx or the Company relative to a
Transaction during the Exclusive Period, which persons will be identified
on Appendix A attached to this letter as Appendix A may be modified from time to
time, the Company agrees to pay Xxxxx Xxxxxxx a cash fee equal to (a) $500,000
plus (b) 2.0% of the total transaction value greater than $45,000,000 and less
than $55,000,000, plus (c) 2.5% of the total transaction value equal to or
greater than $55,000,000. It is expressly understood that Xxxxx Xxxxxxx will not
be paid a fee if the Company enters into a relationship which is not a
Transaction with any person (including those identified in Appendix A.
In the event all or a portion of the total Transaction value is paid in the form
of stock or other securities of the purchaser, or other non-cash consideration,
the fee payable to Xxxxx Xxxxxxx shall be determined on the basis of the cash
equivalent of such stock and/or other securities and/or non-cash consideration
as of the date that the payments are received by the Company or its
shareholders. If Xxxxx Xxxxxxx and the Company are unable to agree on the cash
equivalent of such stock and/or other securities and/or other non-cash
consideration within thirty days after the closing date, the determination of
the cash equivalent shall be made by an investment banker or other person
experienced in valuing such securities and/or other non-cash consideration
mutually acceptable to both Xxxxx Xxxxxxx and the Company. The determination of
such investment banker or other person shall be binding on both Xxxxx Xxxxxxx
and the Company, and Xxxxx Xxxxxxx and the Company shall each be responsible for
paying one-half of the fees of any such investment banker or other person.
It is the intention of the parties that the fee payable to Xxxxx Xxxxxxx
pursuant to (b) above will be computed based upon the total consideration
regardless of how allocated or the form of consideration. Therefore, the "total
Transaction value" referred to above shall include but is not limited to (A) the
cash value of any outstanding stock options or warrants whether vested or not
that are "rolled over" or "cashed out" as part of this Transaction, (B) any and
all deferred installments of the Transaction, (C) any portion of the Transaction
value held in escrow subsequent to closing, (D) payments to be made in the
future upon the occurrence of certain contingencies or meeting certain
performance objectives, and (E) any assets of the Company which are paid in the
form of dividends or otherwise to its shareholders or owners, subsequent to the
date hereof.
The entire fee payable pursuant to item (a) and (b) above shall be paid in cash
to Xxxxx Xxxxxxx at closing or with respect to non-cash consideration at such
time as the cash equivalent of the total transaction value is determined.
Upon receipt of an invoice, the Company will also reimburse Xxxxx Xxxxxxx for
its reasonable out-of-pocket expenses, including fees and disbursements of
counsel, whether or not a Transaction is consummated, provided that Xxxxx
Xxxxxxx will seek the consent of the Company prior to expanding in excess of
$10,000 on reimbursable counsel fees which consent shall not be unreasonably
withheld.
In the event Xxxxx Xxxxxxx personnel shall be required to prepare for, or attend
or participate in judicial or other proceedings relating to the fairness opinion
referred to above, Xxxxx Xxxxxxx shall be entitled to receive an additional, per
diem payment, per person, together with reimbursement of all out-of-pocket
expenses and disbursements, including reasonable attorneys' fees incurred by
Xxxxx Xxxxxxx in respect of its preparation for, or attendance or participation
at such proceedings. The per diem payment shall, at such time, be in the amount
then customarily charged for similar services.
The Company also agrees to indemnify and hold Xxxxx Xxxxxxx ((which term
includes its directors, controlling persons (as such term is defined under the
Securities Act of 1933), officers, employees and agents)) harmless against and
from all losses, claims, damages or liabilities, and all actions, claims,
proceedings and investigations in respect thereof, arising out of or in
connection with this engagement or Xxxxx Xxxxxxx'x services rendered in
connection with this engagement, and to reimburse Xxxxx Xxxxxxx for all
reasonable legal and other out-of-pocket expenses as incurred by Xxxxx Xxxxxxx
in connection with investigating, preparing or defending any such action, claim,
proceeding or investigation, provided, however, the Company shall not be so
liable to the extent that any such loss, claim, damage or liability is finally
judicially determined to have resulted primarily and directly from Xxxxx
Xxxxxxx'x xxxxx negligence or wilful misconduct.
If for any reason the foregoing indemnification or reimbursement is unavailable
to Xxxxx Xxxxxxx or insufficient to hold it harmless (except by reason of Xxxxx
Xxxxxxx'x xxxxx negligence or wilful misconduct), then the Company shall
contribute to the amount paid or payable by Xxxxx Xxxxxxx as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and Xxxxx Xxxxxxx
on the other hand, the relative fault of the Company and of Xxxxx Xxxxxxx and
any relevant equitable considerations, provided that, in no event, will the
aggregate contribution of Xxxxx Xxxxxxx hereunder exceed the amount of fees
actually received by Xxxxx Xxxxxxx pursuant to this agreement.
The reimbursement, indemnity and contribution obligations of the Company under
this agreement shall be in addition to any liability which the Company may
otherwise have, shall survive any termination of this agreement and shall be
binding upon and extend to the benefit of any successors, assigns, heirs and
personal representatives of the Company and Xxxxx Xxxxxxx.
The Company agrees that Xxxxx Xxxxxxx has the right to place advertisements in
financial and other newspapers and journals at their own expense describing
their services to the Company hereunder for any completed transactions, provided
that Xxxxx Xxxxxxx will submit a copy of any such advertisements to the Company
for its approval, which approval shall not be unreasonably withheld or delayed.
Our agreement represented by this letter shall be governed by the laws of
Minnesota. Any dispute or controversy arising out of this agreement shall be
determined by arbitration conducted in accordance with the rules of the New York
Stock Exchange or the National Association of Securities Dealers, Inc. then in
effect. Any arbitration award shall be final and binding upon the Company and
Xxxxx Xxxxxxx, and judgment upon the award may be entered in any court having
jurisdiction.
If this letter correctly sets forth the understanding between us, please so
indicate by signing on the designated space below and returning a signed copy to
us, whereupon this letter shall constitute the agreement between us.
Sincerely,
XXXXX XXXXXXX INC.
By /s/ Xxxxx X. Xxxxxxx
______________________________________________
Agreed this 6th day of April, 1995.
SYNTRO CORPORATION
By /s/ Xxxxx X. Xxxxxxx
______________________________________________
Title Vice President, Finance & Administration
___________________________________________
