FINANCIAL CONSULTING AGREEMENT
This Financial Consulting Agreement (the "Agreement") is made as of
May 15, 1998, by and between Immtech International, Inc. ("Immtech" or the
"Company") and RADE Management Corporation ("Rade").
R E C I T A L S :
A. Immtech is a privately held biotech company. The largest single
shareholder of Immtech is Criticare Systems, Inc. ("Criticare").
B. Immtech needs additional capital to further the development of
its products and believes that raising capital would be facilitated by becoming
a publicly traded company.
X. Xxxx employs individuals and engages consultants who are
knowledgeable with respect to the capital markets throughout the world. Rade is
willing to employ its expertise to advise Immtech with respect to steps it
should take to make itself more attractive to potential investors.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein the parties hereby agree as follows:
1. Engagement
1.1 The Company hereby engages Rade to serve as a financial advisor to the
Company. As such, Rade will advise the Company regarding its capital needs and
how they might be met. In particular, Rade will advise the Company as to how to
become publicly traded so that the Company might more easily access capital
markets throughout the world.
1.2 The initial specific steps to be undertaken by Rade will include:
(a) analyzing the objectives of Immtech with respect to it capital
raising activities;
(b) assisting the Company in determining the potential benefits
and drawbacks of various transaction structures; and
(c) assisting the Company in its initial discussions with its
lawyers and accountants, and with potential investors and
investment bankers.
Once the Company has determined a course of action, Rade's
responsibilities will include:
(a) advising the Company with respect to the preparation of
offering memoranda, deal documents and other documents which
may be required, such as employment agreements, option
agreements, etc.
(b) assisting management in responding to and preparing for due
diligence inquiries;
(c) advising the Company with respect to particular points of
negotiation; and,
(d) advising the Company with respect to the preparation of final
deal documents.
2. Fees
2.1 Rade's compensation for the services that it may render hereunder
shall be 1,950,000 warrants to purchase common stock of the Company (after
giving effect to such reverse stock split as may be necessary for Immtech to
achieve the capital structure contemplated by the proposal for an equity
investment previously discussed by Immtech and Rade) (the "Warrants"); provided,
however, that the right to exercise such Warrants shall vest (i) as to 450,000
shares if, and only if, the Company receives a capital infusion of no less than
$1 million on or before August 1, 1998; (ii) as to an additional 600,000 shares
if, and only if, the Company receives an additional capital infusion of no less
than $4 million on or before October 15, 1998; (iii) as to an additional 300,000
shares if, and only if, the Company receives an additional capital infusion of
no less than $2 million on or before December 31, 1998; (iv) as to an additional
300,000 shares if, and only if, the Company receives an additional capital
infusion of no less than $2 million on or before March 31, 1999 and (v) as to
the remaining 300,000 shares if, and only if, the Company receives an additional
capital infusion of no less than $2 million on or before June 30, 1999.
2.2 In addition, upon the funding of the initial $1 million in equity
contemplated above, Rade will be reimbursed (or advanced) by the Company $50,000
against expenses (including, without limitation, legal and accounting fees)
incurred in connection with services rendered to the Company. On or before June
30, 1999, Rade will deliver documentation of the expenses incurred to the
Company or return to the Company the unused portion of the aforesaid advances
2.3 The fee provided for in Section 2.1 is premised upon Rade's current
understanding of the Company's financial needs and its willingness to fulfill
such needs through offerings structured substantially in the manner discussed by
Rade and the Company prior hereto. If the structure of the contemplated
transactions changes,
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appropriate adjustment will be made to the Warrants issuable pursuant to Section
2.1.
2.4 The parties confirm that Rade is not responsible for or expected to
introduce the Company to any potential investors and the Warrants referred to in
Section 2.1 shall be exercisable and the amounts referred to in Section 2.2
shall be payable upon receipt of appropriate funding by the Company, regardless
of its source.
3. Indemnification
The Company agrees to the indemnification and contribution
provisions annexed hereto in Exhibit A and incorporated herein by reference.
4. Term
The term of the Agreement shall extend until September 30, 1999,
provided the Company may terminate this Agreement at any time upon sixty (60)
days prior notice to Rade.
Notwithstanding anything to the contrary contained herein, neither
expiration or termination of this Agreement shall effect Rade's right to receive
and, upon satisfaction of the appropriate conditions, exercise the Warrants, and
the provisions hereof regarding confidentiality, indemnification and
contribution, all of which shall survive.
5. Information
The Company recognizes and confirms that in performing its duties
pursuant to this Agreement, Rade will be using and relying on data, material,
and other information (the "Information") furnished by the Company and its
employees and representatives (including, without limitation, its legal counsel
and accountants) and on information available from generally recognized public
sources without any independent investigation or verification thereof. Rade
assumes no responsibility for the accuracy or completeness of the Information.
In rendering its services hereunder, Rade will not make an appraisal or
independent evaluation of any of the assets or liabilities of the Company. Rade
understands that the Information that the Company will furnish to it (other than
that portion of the Information that is publicly available) is confidential and
will take appropriate actions to maintain the confidentiality of the
Information.
6. Enforceability.
The failure of either party at any time to require performance by
the other party of any provision hereunder shall in no way affect the right of
that party thereafter to enforce the
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same, nor shall it affect any other party's right to enforce the same, or to
enforce any of the other provisions in this Agreement; nor shall the waiver by
either party of the breach of any provision hereof be taken or held to be a
waiver of any subsequent breach of such provision or as a waiver of the
provision itself.
7. Assignment.
This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives. Neither this Agreement nor any right or obligation
hereunder may be sold, transferred, assigned, pledged or hypothecated by either
party hereto without the prior written consent of the other party.
8. Notice.
Any notice, request, instrument or other document to be given under
this Agreement by either party hereto to the other shall be in writing and shall
be deemed effective (a) upon personal delivery, if delivered by hand, (b) three
(3) days after the date of deposit in the mails, postage prepaid, if mailed by
certified or registered mail, or (c) on the next business day, if sent by a
prepaid overnight courier service, and in each case addressed as follows:
If to the Company:
Xxxxx Xxxxxxxx
Immtech International, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
FAX: 000-000-0000
with a copy to:
Xxxx Xxxxxx, Esq.
Xxxxxxx, Carton & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
FAX 000-000-0000
If to Rade:
RADE Management Corporation
0 Xxxxx Xxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xx
FAX 000-000-0000
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with a copy to:
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx Xxx Xxxx,
Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. XxXxxx, Esq.
Fax: 000-000-0000
Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.
9. Miscellaneous.
9.1 The headings contained in this Agreement are for reference purposes
only, and shall not affect the meaning or interpretation of this Agreement.
9.2 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of law
principles thereof.
9.3 This Agreement, represents the entire agreement between the Company
and the Consultant with respect to the subject matter hereof, and all prior
agreements relating to the engagement of the Consultant, written or oral, are
nullified and superseded hereby.
9.4 This Agreement may not be orally canceled, changed, modified or
amended, and no cancellation, change, modification or amendment shall be
effective or binding, unless in writing and signed by both parties to this
Agreement, and any provision hereof may be waived only by an instrument in
writing signed by the party or parties against whom or which enforcement of such
waiver is sought.
(THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK)
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9.5 As used in this Agreement, any gender includes a reference to all
other genders and the singular includes a reference to the plural and vice
versa.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
IMMTECH INTERNATIONAL, INC.
By:
---------------------------------
Name:
Title:
RADE MANAGEMENT CORPORATION
By:
---------------------------------
Name:
Title:
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Exhibit A
Indemnification Provisions
In connection with the engagement of RADE Management Corporation
("Rade") by Immtech International, Inc. (the "Company") pursuant to the
Financial Consulting Agreement dated June ___, 1998, between the Company and
Rade as it may be amended from time to time (the "Financial Consulting
Agreement"), the parties hereby agree as follows:
1. The Company agrees to reimburse Rade, its affiliates and their
respective principals, directors, officers, employees, agents and controlling
persons (each an "Indemnified Party") promptly upon demand for expenses
(including fees and expenses of legal counsel) as they are incurred in
connection with the investigation of, preparation for or defense of any pending
or threatened claim, or any litigation, proceeding or other action in connection
with or arising out of or relating to the engagement of Rade under the Financial
Consulting Agreement, or any actions taken or omitted, services performed or
matters contemplated by or in connection with the Financial Consulting
Agreement, whether or not such litigation, proceeding or other action is
initiated or brought by the Company. The Company also agrees to indemnify and
hold harmless each Indemnified Party from and against any and all losses,
claims, damages and liabilities ("Loses"), joint or several, to which any
Indemnified Party may become subject, including, without limitation any amount
paid or payable in settlement of any litigation, proceeding or other action
(commenced or threatened), in connection with or arising out of or relating to
the engagement of Rade under the Financial Consulting Agreement, or any actions
taken or omitted, services performed or matters contemplated by or in connection
with the Financial Consulting Agreement, provided, however, that the Company
shall not be liable pursuant to this paragraph to the extent such Losses have
been finally determined by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily from the willful misconduct or gross
negligence of any Indemnified Party.
2. If indemnification is to be sought hereunder by an Indemnified
Party, then such Indemnified Party shall notify the Company of the commencement
or thereat of any litigation, proceeding or other action in respect thereof;
provided, however, that the failure to notify the Company shall not relieve the
Company from any liability or obligation that it may have hereunder or otherwise
to such Indemnified Party unless and only to the extent that such failure to
notify results in actual prejudice to the Company. Following such notification,
the Company may elect in writing to assume the defense of such litigation,
proceeding or other action (and the costs related thereto) and, upon such
election, the Company shall not be liable for any legal costs
subsequently incurred by such Indemnified Party (other than costs of
investigation or the production of documents or witnesses) unless (i) the
Company has failed to provide legal counsel reasonably satisfactory to such
Indemnified Party in a timely manner or (ii) such Indemnified Party shall have
reasonably concluded on the advice of counsel that (a) the representation of
such Indemnified Party by legal counsel selected by the Company would be
inappropriate due to actual or potential conflicts of interest; or (b) there may
be legal defenses available to such Indemnified Party that are different from or
additional to those available to the Company such that separate representation
for such Indemnified Party would be advisable. Nothing set forth herein shall
preclude and Indemnified Party from retaining its own counsel at its own
expense.
The Company agrees that, without Rade's prior written consent (which
will not be unreasonably withheld), the Company will not settle, compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
hereunder (whether or not Rade or any other Indemnified Party are an actual or
potential party to such claim, action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each of the foregoing
parties from all liability arising out of such claim, action or proceeding or
unless Rade reasonably agrees that such release is not necessary at such time
(it being understood that the Company's indemnification obligations will remain
in full force and effect). Rade agrees that the Company shall not be liable for
the settlement, compromise or consent of any claim, action or proceeding which
is effected without the Company's written consent (which will not be
unreasonably withheld).
3. In the event that the indemnity provided for in paragraphs 1 and
2 hereof is unavailable or insufficient to hold any Indemnified Party harmless
other than by operation of the proviso set forth in paragraph 1 above, then the
Company shall contribute to amounts paid or payable by an Indemnified Party in
respect of such Indemnified Party's Losses as to which the indemnity provided
for in paragraphs 1 and 2 hereof is unavailable or insufficient (i) in such
proportion as approximately reflects the relative benefits received by the
Company, on the one hand, and Rade, on the other hand, in connection with the
matters as to which such Losses relate or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
appropriately reflects not only the relative benefits referred to in clause (i)
but also the relative fault of the Company, on the one hand, and Rade, on the
other hand, as well as any other equitable considerations. The amounts paid or
payable by an Indemnified Party in respect of Losses referred to above shall be
deemed to include any legal or other fees and expenses incurred in defending any
litigation, proceeding or other action or claim.
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Notwithstanding the provisions hereof, to the extent permitted by applicable
law, Rade's share of the liability hereunder shall not be in excess of the
amount of fees actually received by Rade under the Financial Consulting
Agreement (excluding any amounts received as reimbursement of expenses incurred
by Rade).
4. These Indemnification Provisions shall remain in full force and
effect whether or not any of the transactions contemplated by the Financial
Consulting Agreement are consummated and shall survive the expiration or
termination of the Financial Consulting Agreement and all residual periods, and
shall be in addition to any liability that the Company might otherwise have to
any Indemnified Party under the Financial Consulting Agreement or otherwise. It
is further agreed that no Indemnified Party (including Rade) shall be liable to
the Company or any affiliate of the Company in connection with any matter
arising out of or relating to the engagement of Rade under the Financial
Consulting Agreement, or any actions taken or omitted, services performed or
matters contemplated by or in connection with the Financial Consulting
Agreement, except to the extent of any Losses that a court of competent
jurisdiction shall have finally determined (not subject to further appeal) to
have resulted primarily from the willful misfeasance or gross negligence of any
Indemnified Party.
RADE MANAGEMENT CORPORATION
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
IMMTECH INTERNATIONAL, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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