Exhibit 10.1
ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the __ day of
______, 1999 by and between Xxxxxxx Xxxxxxxx Securities Corporation, a Florida
corporation ("Xxxxxxx"), and ABLE Energy, Inc., a Delaware corporation (the
"Company").
In consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. PURPOSE: The Company hereby engages Xxxxxxx for the term
specified in Paragraph 2 hereof to render consulting advice to the Company as an
investment banker relating to financial and similar matters upon the terms and
conditions set forth herein.
2. TERM: Except as otherwise specified in paragraph 4 hereof, this
Agreement shall be effective from _______, 1999 to ______, 2001.
3. DUTIES OF XXXXXXX: During the term of this Agreement, Xxxxxxx
shall seek out Transactions (as hereinafter defined) on behalf of the Company
and shall furnish advice to the Company in connection with any such
Transactions.
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4. COMPENSATION: In consideration for the services rendered by
Xxxxxxx to the Company pursuant to this Agreement (and in addition to the
expenses provided for in Paragraph 5 hereof), the Company shall compensate
Xxxxxxx as follows:
(a) The Company shall pay Xxxxxxx a fee of $4,500 per month
during the term of this Agreement. The sum of $108,000 shall be payable in full
on the date of this Agreement. In the event that Xxxxxxx ceases its business
operations as a financial advisor and investment banker, materially breaches or
is unable to satisfy its performance obligations hereunder, then Xxxxxxx shall
repay to the Company the pro rata unearned portion of foregoing fee, based on
the number of months for which performance was delivered and the remaining
number of months in the term.
(b) In the event that any Transaction (as hereinafter defined)
occurs during the term of this Agreement or one year thereafter, the Company
shall pay fees to Xxxxxxx as follows:
CONSIDERATION FEE
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$ - 0 - to $ 1,000,000 5% of Consideration
$ 1,000,001 to $2,000,000 4% of Consideration
$ 2,000,001 to $3,000,000 3% of Consideration
$ 3,000,001 to $4,000,000 2% of Consideration
$ 4,000,001 or more 1% of the Consideration in excess of $4,000,001
For the purposes of this Agreement, "Consideration" shall mean the
total market value on the day of the closing of stock, cash, assets and all
other property (real or personal) exchanged or received, directly or indirectly
by the Company or any of its security holders in connection with any
Transaction. Any co-broker or brokers retained by Xxxxxxx shall be paid by
Kashner.
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For the purposes of the Agreement, a "Transaction" shall mean (a)
any transaction originated by Xxxxxxx, other than in the ordinary course of
trade or business of the Company, whereby, directly or indirectly, control of or
a material interest in the Company or any of its businesses or any of their
respective assets, is transferred for Consideration, (b) any transaction
originated by Xxxxxxx whereby the Company acquires any other company or the
assets of any other company or an interest in any other company (an
"Acquisition") or (c) any sale or Acquisition in connection with which the
Company engages an investment banker other than Xxxxxxx and pays such investment
banker a fee in respect of such Transaction unless Xxxxxxx was unwilling waive
to so act.
In the event Xxxxxxx originates a line of credit with a lender,
the Company and Xxxxxxx will mutually agree on a satisfactory fee for such
services provided based upon reasonable and customary practice in the industry
and the terms of payment of such fee; provided, however, that in the event the
Company is introduced to a corporate partner by Xxxxxxx in connection with a
merger, acquisition or financing and a credit line develops directly as a result
of the introduction, the appropriate fee shall be the amount set forth in the
schedule above with consideration to be based upon the amount of the line of
credit. In the event Xxxxxxx 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, in lieu of the fees set forth in the schedule above. Total sales shall
mean cash 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' payment. In the event any adjustments are made to the total sales
after the commission has been paid,
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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 Agreement,
except as otherwise specified, are due and payable to Xxxxxxx in cash at the
closing or closings of any transaction specified in Paragraph 4 hereof. In the
event that this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, Xxxxxxx shall be entitled
to a full fee as provided under Paragraphs 4 and 5 hereof, 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.
5. EXPENSES OF XXXXXXX: In addition to the fees payable hereunder,
and regardless of whether any transaction set forth in Paragraph 4 hereof is
proposed or consummated the Company shall reimburse Xxxxxxx for all fees and
disbursements of Xxxxxxx'x counsel and Xxxxxxx'x travel and reasonable
out-of-pocket expenses incurred in connection with and in direct furtherance of
the services performed by Xxxxxxx pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long-distance telephone
calls. Xxxxxxx shall obtain the consent of the Company before incurring any
expense over $1,000.
6. LIABILITY OF XXXXXXX:
The Company acknowledges that all opinions and advice (written or
oral) given by Xxxxxxx to the Company in connection with Xxxxxxx'x engagement
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 Xxxxxxx to be given hereunder, and no such opinion or advice shall be
used for any other
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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
Xxxxxxx, or use Xxxxxxx'x name in any annual reports or any other reports or
releases of the Company without Xxxxxxx'x prior written consent.
(2) The Company acknowledges that Xxxxxxx makes no commitment
whatsoever as to making a market in the Company's securities or to recommending
or advising its clients to purchase the Company's securities, except that
Xxxxxxx has committed to make a market in the Company's securities for at least
45 days after the effective date of the Company's initial public offering.
Research reports or corporate finance reports that may be prepared by Xxxxxxx
will, when and if prepared, be done solely on the merits or judgment of analysis
of Xxxxxxx or any senior corporate finance personnel of Xxxxxxx.
7. XXXXXXX'X SERVICES TO OTHERS: The Company acknowledges that
Xxxxxxx'x or its affiliates are in the business of providing financial services
and consulting advice to others. Nothing herein contained shall be construed to
limit or restrict Xxxxxxx in conducting such business with respect to others, or
in rendering such advice to others.
8. COMPANY INFORMATION:
(a) The Company recognizes and confirms that, in advising the
Company and in fulfilling its engagement hereunder, Xxxxxxx will use and rely on
data, material and other information furnished to Xxxxxxx by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, Xxxxxxx may rely upon the data, material and other information
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supplied by the Company without independently verifying the accuracy,
completeness or veracity of same.
(b) Except as contemplated by the terms hereof or as required by
applicable law, Xxxxxxx shall keep confidential all material non-public
information provided to it by the Company, and shall not disclose such
information to any third party, other than such of its employees and advisors as
Xxxxxxx determines to have a need to know. Upon termination of this Agreement,
at the request of the Company, Xxxxxxx shall deliver to the Company all
non-public material in its possession relating to the business affairs of the
Company.
9. INDEMNIFICATION:
The Company shall indemnify and hold Xxxxxxx and its directors,
officers, employees and agents harmless 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, as amended (the "1933 Act"), the
Securities Exchange Act of 1934, as amended (the "Act") or any other federal or
state statute, at common law or otherwise, insofar as said liabilities, claims
and lawsuits (including awards and/or judgments) arise out of or are in
connection with the services rendered by Xxxxxxx or any transactions in
connection with this Agreement, except for any liabilities, claims and lawsuits
(including awards judgments and related costs and expenses), arising out of acts
or omissions of Xxxxxxx. In addition, the Company shall also indemnify and hold
Xxxxxxx harmless against any and all reasonable costs and expenses, including
reasonable counsel fees, incurred or relating to the foregoing. If it is finally
judicially determined that the Company will not be responsible for any
liabilities, claims and lawsuits or expenses related thereto, the indemnified
party, by his or its acceptance of such amounts,
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agrees to repay the Company all amounts previously paid by the Company to the
indemnified person and will pay all costs of collection thereof, including but
not limited to reasonable attorneys' fees related thereto.
Xxxxxxx shall give the Company prompt notice of any such
liability, claim or lawsuit which Xxxxxxx 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 before any regulatory bodies
and/or authorities.
Xxxxxxx shall indemnify and hold the Company and its directors,
officers, employees and agents 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 1933 Act, the Act or any other federal or state
statute, at common law or otherwise, insofar as said liabilities, claims and
lawsuits (including awards and/or judgments) arise out of or are based upon
Xxxxxxx'x gross negligence, useful misconduct, bad faith or any untrue statement
or alleged untrue statement of a material fact or omission at a material fact
required to be stated or necessary to make the statement provided by Xxxxxxx,
not misleading, which statement or omission was made in reliance upon
information furnished in writing to the Company by or on behalf of Xxxxxxx for
inclusion in any registration statement or prospectus or any amendment or
supplement thereto in connection with any transaction to which this Agreement
applies. In addition, Xxxxxxx shall also indemnify and hold the Company harmless
against any and all costs and expenses, including reasonable counsel fees,
incurred or relating to the foregoing.
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The Company shall give to Xxxxxxx prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
Xxxxxxx'x indemnification and Xxxxxxx thereupon shall be granted the right to a
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.
b. In order to provide for just and equitable contribution under
the Act in any case in which (i) any person entitled to indemnification under
this Section 9 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 10 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
such person in circumstances for which indemnification is provided under this
Section 10, then, and in each such case, the Company and Xxxxxxx shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after any contribution from others) in such proportion taking
into consideration the relative benefits received by each party from the
offering covered by the prospectus with respect to any transactions in
connection with this Agreement (taking into account the portion of the proceeds
of the offering realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was assessed,
the opportunity to correct and prevent any statement or omission and other
equitable considerations appropriate under the circumstances; provided, however,
that notwithstanding the above in no event shall Xxxxxxx be required to
contribute any amount in excess of 10% of the public offering price of any
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securities to which such Prospectus applies; and provided, that, in any such
case, no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
Within fifteen (15) days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action,
suit or proceeding, such party will, if a claim for contribution in respect
thereof is to be made against another party (the "Contributing Party"), notify
the Contributing Party of the commencement thereof, but the omission so to
notify the Contributing Party will not relieve it from any liability which it
may have to any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and such party
notifies a Contributing Party or his or its representative of the commencement
thereof within the aforesaid fifteen (15) days, the Contributing Party will be
entitled to participate therein with the notifying party and any other
Contributing Party similarly notified. Any such Contributing Party shall not be
liable to any party seeking contribution on account of any settlement of any
claim, action or proceeding effected by such party seeking contribution without
the written consent of the Contributing Party. The indemnification provisions
contained in this Section 10 are in addition to any other rights or remedies
which either party hereto may have with respect to the other or hereunder.
10. XXXXXXX AN INDEPENDENT CONTRACTOR : Xxxxxxx 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 Xxxxxxx 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.
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11. MISCELLANEOUS:
(1) This Agreement between the Company and Xxxxxxx 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.
(2) Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if hand-delivered or
sent (i) postage prepaid by registered mail, return receipt requested, or (ii)
by facsimile, to the respective parties as set forth below, or to such other
address as either party may notify the other in writing:
If to the Company, to: Able Energy, Inc.
000 Xxxxx 00
Xxxxxxxx, Xxx Xxxxxx 00000
with a copy to: Sichenzia, Ross & Xxxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxxxx, to: Xxxxxxx Xxxxxxxx Securities Corporation
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
with a copy to: Xxx X. Xxxxxxxxx
Xxxxxxx, Xxxxxx & Xxxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(3) 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.
(4) This Agreement may be executed in any number of counterparts,
each of which together shall constitute one and the same original document.
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(5) No provision of this Agreement may be amended, modified or
waived, except in a writing signed by all of the parties hereto.
(6) This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, without giving effect to conflict
of law principles. The parties hereby agree that any dispute which may arise
between them arising out of or in connection with this Agreement shall be
adjudicated before a court located in New York City, and they hereby submit to
the exclusive jurisdiction of the courts of the State of New York located in New
York, New York and of the federal courts in the Southern District of New York
with respect to any action or legal proceeding commenced by any party, and
irrevocably waive any objection they now or hereafter may have respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an inconvenient forum, relating to or arising out of
this Agreement, and consent to the service of process in any such action or
legal proceeding by means of registered or certified mail, return receipt
requested, in care of the address set forth in Paragraph 11(b) hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
XXXXXXX DAVIDSON SECURITIES CORPORATION
By:
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ABLE ENERGY, INC.
By:
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