Exhibit 10.4
FINANCIAL ADVISORY AGREEMENT
This Agreement is made and entered into as of the day of ,
1998, between CropKing, Incorporated (the "Company") and Xxxxxx Xxxxx
Securities, Inc. (the "Financial Advisor").
W I T N E S S E T H :
WHEREAS, The Company has engaged the Financial Advisor to act as the
Underwriter in connection with the public offering of the Company's securities;
and
WHEREAS, the Financial Advisor has experience in providing financial and
business advice to public and private companies; and
WHEREAS, the Company is seeking and the Financial Advisor is willing to
furnish business and financial related advice and services to the Company on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of, and for the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:
1. Purpose. The Company hereby engages the Financial Advisor on a
non-exclusive basis for the term specified in this Agreement to render
financial advisory and consulting advice to the Company as an investment
banker relating to financial and similar matters upon the terms and
conditions set forth herein. However, the advisory will only be rendered if
specifically requested in writing by the CEO of the Company.
2. Representations of the Financial Advisor and the Company. The
Financial Advisor represents and warrants to the Company that (i) it is a
member in good standing of the National Association of Securities Dealers,
Inc. ("NASD") and that it is engaged in the securities brokerage business;
(ii) in addition to its securities brokerage business, the Financial Advisor
provides consulting advisory services; and (iii) it is free to enter into
this Agreement and the services to be provided pursuant to this Agreement are
not in conflict with any other contractual or other obligation to which the
Financial Advisor is bound. The Company acknowledges that the Financial
Advisor is in the business of providing financial services and consulting
advice (of the type contemplated by this Agreement) to others and that
nothing herein contained shall be construed to limit or restrict the
Financial Advisor in conducting such business with respect to others, or
rendering such advice to others.
1
3. Duties of the Financial Advisor. During the term of this
Agreement, the Financial Advisor will provide the Company with consulting
advice as specified below at the request of the Company, provided that the
Financial Advisor shall not be required to undertake duties not reasonably
within the scope of the consulting advisory service in which the Financial
Advisor is engaged generally. In performance of these duties, the Financial
Advisor shall provide the Company with the benefits of its best judgment and
efforts. It is understood and acknowledged by the parties that the value of
the Financial Advisor's advice is not measurable in any quantitative manner,
and that the amount of time spent rendering such consulting advice shall be
determined according to the Financial Advisor's discretion.
The Financial Advisor's duties may include, but will not necessarily be
limited to:
1) Advice relating to corporate financing activities;
2) Recommendations relating to specific business operations and
investments;
3) Advice relating to financial planning; and
4) Advice regarding future financings involving securities of the
Company or any subsidiary.
4. Term. The term of this Agreement shall be for twelve (12) months
commencing on the first day of the month following the Company's receipt of
the proceeds from the contemplated public offering (the "Commencement Date");
provided, however, that this Agreement may be renewed or extended upon such
terms and conditions as may be mutually agreed upon by the parties hereto.
5. Fee. The Company shall pay the Financial Advisor a fee of $108,000
for the financial services to be rendered pursuant to this Agreement, all of
which shall be payable at the Closing Date of the Company's proposed public
offering.
6. Expenses. In addition to the fees payable hereunder, the Company
shall reimburse the Financial Advisor, within five (5) business days of its
request, for any and all reasonable out-of-pocket expenses incurred in
connection with the services performed by the Financial Advisor and its
counsel pursuant to this Agreement, including (i) reasonable hotel, food and
associated expenses; (ii) reasonable charges for travel; (iii) reasonable
long-distance telephone calls; and (iv) other reasonable expenses spent or
incurred on the Company's behalf. All such expenses in excess of $500 shall
be pre-approved by the Company.
7. Introduction of Customers, Origination of Line of Credit and
Similar Transactions. In the event the Financial Advisor
2
originates a line of credit with a lender or a corporate partner, the Company
and the Financial Advisor will mutually agree on a satisfactory fee and the
terms of payment of such fee. In the event the Financial Advisor introduces
the Company to a joint venture partner or customer and sales develop as a
result of the introduction, the Company agrees to pay a fee of five percent
(5%) of total sales generated directly from this introduction during the
first two years following the date of the first sale. Total sales shall mean
cost receipts less any applicable refunds, returns, allowances, credits and
shipping charges and monies paid by the Company by way of settlement or
judgment arising out of claims made by or threatened against the Company.
Commission payments shall be paid on the 15th day of each month following the
receipt of customers' payments. In the event any adjustments are made to the
total sales after the commission has been paid, the Company shall be entitled
to an appropriate refund or credit against future payments under this
Agreement.
All fees to be paid pursuant to this paragraph, except as otherwise
specified, are due and payable to the Financial Advisor in cash at the
closing or closings of any transaction specified in this paragraph. In the
event that this Agreement shall not be renewed or if terminated for any
reason, notwithstanding any such non-renewal or termination, the Financial
Advisor shall be entitled to a full fee as provided under this paragraph for
any transaction for which the discussions were initiated during the term of
this Agreement and which is consummated within a period of twelve months
after non-renewal or termination of this Agreement. Nothing herein shall
impose any obligation on the part of the Company to enter into any
transaction or to use any services of the Financial Advisor offered pursuant
to this paragraph or this Agreement.
8. Use of Advice by the Company; Public Market for the Company's
Securities. The Company acknowledges that all opinions and advice (written
or oral) given by the Financial Advisor to the Company in connection with the
engagement of the Financial Advisor are intended solely for the benefit and
use of the Company in considering the transaction to which they relate, and
the Company agrees that no person or entity other than the Company shall be
entitled to make use of or rely upon the advice of the Financial Advisor to
be given hereunder, and no such opinion or advice shall be used for any other
purpose or reproduced, disseminated, quoted or referred to at any time, in
any manner or for any purpose, nor may the Company make any public references
to the Financial Advisor, or use of the Financial Advisor's name in any
annual reports or any other reports or releases of the Company without the
prior written consent of the Financial Advisor.
The Company acknowledges that the Financial Advisor makes no commitment
whatsoever as to making a public trading market in the Company's securities
or to recommending or advising its clients to purchase the Company's
securities. Research reports or corporate
3
finance reports that may be prepared by the Financial Advisor will, when and
if prepared, be done solely on the merits or judgment and analysis of the
Financial Advisor or any senior corporate finance personnel of the Financial
Advisor.
9. Company Information; Confidentially. The Company recognizes and
confirms that, in advising the Company and in fulfilling its engagement
hereunder, the Financial Advisor will use and rely on data, material and
other information furnished to the Financial Advisor by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, the Financial Advisor may rely upon the data, material and other
information supplied by the Company without independently verifying the
accuracy, completeness or veracity of same. In addition, in the performance
of its services, the Financial Advisor may look to such others for such
factual information, economic advice and/or research upon which to base its
advice to the Company hereunder as the Financial Advisor shall in good xxxxx
xxxx appropriate.
Except as contemplated by the terms hereof or as required by applicable
law, the Financial Advisor shall keep confidential all non-public information
provided to it by the Company, and shall not disclose such information to any
third party without the Company's prior written consent, other than such of
its employees and advisors as the Financial Advisor determines to have a need
to know.
10. Indemnification. The Company shall indemnify and hold harmless the
Financial Advisor against any and all liabilities, claims, lawsuits,
including any and all awards and/or judgments to which it may become subject
under the Securities Act of 1933, (the "Act"), the Securities Exchange Act of
1934, as amended (the "1934 Act") or any other federal or state statute, at
common law or otherwise, insofar as said liabilities, claims and lawsuits
(including costs, expenses, awards and/or judgments) arise out of or are in
connection with the services rendered by the Financial Advisor or any
transactions in connection with this Agreement, except for any liabilities,
claims and lawsuits (including awards and/or judgments), arising out of
willful misconduct or willful omissions of the Financial Advisor. In
addition, the Company shall also indemnify and hold harmless the Financial
Advisor against any and all reasonable costs and expenses, including
reasonable counsel fees, incurred relating to the foregoing.
The Financial Advisor shall give the Company prompt notice of any such
liability, claim or lawsuit which the Financial Advisor contends is the
subject matter of the Company's indemnification and the Company thereupon
shall be granted the right to take any and all necessary and proper action,
at its sole cost and expense, with respect to such liability, claim and
lawsuit, including the right to settle, compromise and dispose of such
liability, claim or lawsuit, excepting therefrom any and all proceedings or
hearings
4
before any regulatory bodies and/or authorities.
The Financial Advisor shall indemnify and hold the Company harmless
against any and all liabilities, claims and lawsuits, including any and all
awards and/or judgments to which it may become subject under the Act, the
1934 Act or any other federal or state statute, at common law or otherwise,
insofar as said liabilities, claims and lawsuits (including costs, expenses,
awards and/or judgments) arise out of or are based upon willful misconduct or
willful omissions of the Financial Advisor. In addition, the Financial
Advisor shall also indemnify and hold the Company harmless against any and
all reasonable costs and expenses, including reasonable counsel fees,
incurred relating to the foregoing.
The Company shall give the Financial Advisor prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter
of the Financial Advisor's indemnification and the Financial Advisor
thereupon shall be granted the right to take any and all necessary and proper
action, at its sole cost and expense, with respect to such liability, claim
and lawsuit, including the right to settle, compromise or dispose of such
liability, claim or lawsuit, excepting therefrom any and all proceedings or
hearings before any regulatory bodies and/or authorities.
11. The Financial Advisor as an Independent Contractor. The Financial
Advisor shall perform its services hereunder as an independent contractor and
not as an employee of the Company or an affiliate thereof. It is expressly
understood and agreed to by the parties hereto that the Financial Advisor
shall have no authority to act for, represent or bind the Company or any
affiliate thereof in any manner, except as may be agreed to expressly by the
Company in writing from time to time.
12. Miscellaneous.
(a) This Agreement between the Company and the Financial Advisor
constitutes the entire agreement and understanding of the parties hereto, and
supersedes any and all previous agreements and understandings, whether oral
or written, between the parties with respect to the matters set forth herein.
(b) Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if hand-delivered or
sent by facsimile and postage prepaid by certified or registered mail, return
receipt requested, to the respective parties as set forth below, or to such
other address as either party may notify the other in writing:
5
If to the Company: Xxxxxx X. Xxxxxxxxxxx, President
CropKing, Incorporated
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxx 00000
Copy to: Xxxxxx X. Xxxxxxxxx, Xx., Esq.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to the
Financial Advisor: Xxxxxx X. Xxxx, President
Xxxxxx Xxxxx Securities, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Copy to: Xxxxx X. Xxxxxx, P.A.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
(c) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors, legal
representatives and assigns.
(d) This Agreement may be executed in any number of counterparts, each
of which together shall constitute one and the same original document.
(e) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida applicable to contracts made and to be
performed entirely within the State of Florida. The parties agree that any
action brought by any party against another party in connection with any
rights or obligations arising out of this Agreement shall be instituted
properly in a federal or state court of competent jurisdiction with venue
only in the Fifteenth Judicial Circuit Court in and for Palm Beach County,
Florida or the United States District Court for the Southern District of
Florida, West Palm Beach Division. A party to this Agreement named as a
Defendant in any action brought in connection with this Agreement in any
court outside of the above named designated county or district shall have the
right to have the venue of said action changed to the above designated county
or district or, if necessary, have the case dismissed, requiring the other
party to refile such action in an appropriate court in the above designated
county or federal district.
(g) This Agreement has been duly authorized, executed and delivered by
and on behalf of the Company and the Financial Advisor.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
Very truly yours,
CROPKING, INCORPORATED
BY:________________________________
Xxxxxx X. Xxxxxxxxxxx, President
XXXXXX XXXXX SECURITIES, INC.
BY:________________________________
Xxxxxx X. Xxxx, President
7
