EXHIBIT 10.2
FINANCIAL CONSULTING AGREEMENT
May 8, 2000
Xx. Xxx Xxxxxxxx
Xxxxxx Healthcare, Inc.
000 Xxxxxxxxxx Xxxx.
Xxxxx Xxxx, XX 00000
Dear Xx. Xxxxxxxx:
This Financial Consulting Agreement (the "Agreement") is made and
entered into as of the 8th day of May 2000, by and among Xxxxxx Healthcare, Inc.
(the "Company"), Union Atlantic LC, and Union Atlantic Capital, L.C. Unless
otherwise specifically stated in this Agreement, for convenience purposes, Union
Atlantic LC and Union Atlantic Capital, L.C., are together referred to as "Union
Atlantic" notwithstanding their respective rights and obligations under this
Agreement.
1. ENGAGEMENT; ALLOCATION OF SERVICES AND FEES.
11. The Company hereby retains (i) Union Atlantic LC, for the
purpose of providing to the Company financial consulting services and (ii) and
Union Atlantic Capital, L.C., for the purpose of providing to the Company those
services to be provided as and by a broker-dealer. Union Atlantic LC, and Union
Atlantic Capital, L.C., severally agree to be retained to provide such services
pursuant to the terms and conditions set forth herein.
1.2 Any fee due or payable to Union Atlantic LC or Union Atlantic
Capital, L.C., shall be allocated and paid twenty percent (20%) to Union
Atlantic LC and eighty percent (80%) to Union Atlantic Capital, L.C., and each
of Union Atlantic LC and Union Atlantic Capital, L.C. shall be separately and
independently paid its respective fee by the Company when and if that fee is due
and payable in accordance with the terms of this Agreement. The allocation and
payment of fees and the provision of services shall be made under this Agreement
notwithstanding the designation of the servicing limited liability company as
"Union Atlantic," which designation as noted in the preamble to this Agreement
is made for convenience purposes only.
2. TERM. The term of this Agreement will be six months commencing as of
May 8, 2000. This Agreement may be canceled upon thirty (30) days written notice
by either party.
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3. FINANCIAL CONSULTING SERVICES. During the term hereof, Union
Atlantic agrees to provide financial consulting services to the Company in the
form of: (i) evaluating the Company's capital requirements for funding growth
and expansion of the Company's operations; (ii) advising the Company as to
alternative modes and sources of financing; (iii) analyzing the impact of
business decisions, polices, and practices on the value of the Company's
business and securities; and (iv) bringing to the attention of the Company
possible business opportunities and evaluating business opportunities generally,
whether or not such opportunities are originated by Union Atlantic or others.
Union Atlantic agrees to devote such time, attention, and energy as may be
necessary to perform the services hereunder. Nothing herein shall be construed,
however, to require Union Atlantic to provide a minimum number of hours of
service to the Company or to limit the right of Union Atlantic to perform
similar services for the benefit of persons or entities other than the Company.
4. COMPENSATION. As compensation for Union Atlantic's services
hereunder, the Company will pay to Union Atlantic a fee equal to eleven percent
(11%) of the aggregate purchase price of the Securities purchased by or through
any investor or intermediary identified to the company by Union Atlantic in
Addendum A hereto, which Addendum may be revised from time to time during the
term of this Agreement, less 2% payable to Endeavor Management in connection
with the sale of the Securities. The Company shall pay the fee in Preferred
Stock at the same terms as the investors upon the closing of the transaction for
which the fee is earned, and it shall and hereby does authorize and direct the
escrow agent for each such transaction to issue the Preferred Stock directly to
Union Atlantic upon the closing of the transaction. The Company shall also cause
the escrow agent to notify Union Atlantic three days prior to the disbursement
of funds as a result of any breaking of escrow.
In addition, upon the closing of each transaction contemplated herein,
the Company shall issue to UNION ATLANTIC LC through escrow a warrant entitling
Union Atlantic LC or its designees, to purchase 50,000 shares per $1 million
raised, subject to adjustment, of the Company's common stock at a price equal to
110% of the warrants issued to the investor. The Warrant shall be exercisable
immediately and shall provide for unlimited "piggyback" registration rights and
shall expire 4 years from the date of its issuance. The form of the warrant
shall be subject to Union Atlantic's final review and approval, which shall not
be unreasonably delayed or withheld.
5. FINDER'S FEE/MERGERS & ACQUISITIONS. In addition to the compensation
and expenses paid or payable to Union Atlantic pursuant to Paragraphs 4 and 7,
the Company agrees that, if Union Atlantic, introduces the Company, during the
term of this Agreement, to any person or entity that during the term hereof or
within six months following the terms hereof, becomes a party to a merger,
acquisition, joint venture or other similar transaction with the Company or any
affiliate thereof (a "Transaction"), then the Company shall pay to Union
Atlantic a finder's fee, in cash, calculated as a percentage of the Transaction
Value (as defined herein) in accordance with the following scale:
6% on the first $6,000,000
5% on the amount from $6,000,001 to $8,000,000
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4% on the amount from $8,000,001 to $10,000,000
3% on the amount from 10,000,001 to $12,000,000
1% on the amount above $12,000,000
"Transaction Value" is defined and computed as follows:
a. The total sale proceeds and other consideration received by (i) the
Company, (ii) participants in the Company's phantom or other equity plans, (iii)
recipients of a share of the Transaction proceeds or similar incentive
arrangements and/or (iv) holders of the Company's stock, options, warrants and
convertible securities ((i), (ii), (iii), and (iv) collectively being defined as
the "Stakeholders") upon the consummation of any Transaction (including payments
made in installments, paid into escrow and/or deferred), inclusive of case, debt
and equity securities, notes, property, shareholder payables and indebtedness
assumed or retired, agreements not to compete, consulting agreements and unusual
employment contracts, plus the total value of any interest-bearing liabilities
and long-term liabilities assumed or retired, the net value of any current
assets not sold in an assets Transaction, the aggregate amount of any dividends
(except regular dividends paid in conformity with past practice) or other
distributions paid by the Company to the Stakeholders after the date hereof and
the imputed value of any stock retained by the Stakeholders in a sale,
recapitalization, leveraged buyout or similar transaction.
b. If a portion of such consideration includes contingent payments,
Transaction Value shall also include the value of such payments; provided that
if the Company and Union Atlantic cannot in good faith agree on such value, then
the portion of the finder's fee payable under this paragraph 5 and attributable
to such contingent payments shall be paid to Union Atlantic as such payments are
received by Stakeholders. If the Transaction Value for the Transaction consists
in whole or in part of securities or other property, for the purposes of
calculating the amount of Transaction Value, the value of such securities or
other property will be the value thereof on the day preceding the consummation
of the Transaction as the Company and Union Atlantic agree, provided, however,
that in the case of securities for which there is a public trading market, the
value will be determined by the average last sales prices for such securities
for the last twenty (20) trading days prior to such consummation. In the case of
debt securities for which there is no public trading market, the value thereof
shall be the principal amount thereof. If there is no public trading market for
securities or other property other than debt securities received or receivable
as part of Transaction Value and the parties are unable to agree on their value,
then each of Union Atlantic and the Company will select an investment banking
firm respected in the merger and acquisition field to determine a value, and the
midpoint between the two values established by the two independent experts will
be the fair market value for the purposes hereof.
6. INDEPENDENT CONTRACTOR. Union Atlantic and the Company hereby
acknowledge that Union Atlantic is an independent contractor. Union Atlantic
shall not hold itself out as, nor shall it take any action from which others
might infer that it is a partner or agent of, or joint venture with, the
Company. In addition, Union Atlantic shall take no action, which binds, or
purports to bind, the Company.
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7. LIABILITY OF UNION ATLANTIC. The Company acknowledges that all
opinions and advice, whether oral or written, given by Union Atlantic to the
Company in connection with this Agreement 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 Union Atlantic to be given
hereunder, and no such opinion or advice shall be used by the Company for any
other purpose or reproduced, disseminated, quoted or referred to by the Company
in communications with third parties at any time, in any manner or for any
purpose, nor may the Company make any public references to Union Atlantic or use
Union Atlantic's name in any annual report of any other report or release of the
Company without Union Atlantic's prior written consent, except that the Company
may, without Union Atlantic's further consent, disclose this Agreement (but not
information provided to the Company by Union Atlantic) in the company's filings
with the Securities and Exchange Commission, if such disclosure is required by
law.
8. NOTICES. Except as otherwise specifically agreed, all notices and
other communications made under this Agreement shall be in writing and, when
delivered in person or by facsimile transmission, shall be deemed given on the
same day if delivered on a business day during normal business hours, or on the
first day of business following delivery in person or by facsimile outside
normal business hours, or on the date indicated on the return receipt if sent
registered or certified mail, return receipt requested. All notices sent
hereunder shall be sent to the representatives of the party to be noticed at the
addresses indicated respectively below, or at such other addresses as the
parties to be noticed from time to time by like notice hereafter specify:
If to the Company: Xx. Xxx Xxxxxxxx
Xxxxxx Healthcare, Inc.
000 Xxxxxxxxxx Xxxx.
Xxxxx Xxxx, XX 00000
If to Union Atlantic LC: Xx. Xxxxxxx Xxxxxxx
0000 XXX Xxxx., Xxx 000
Xxxx Xxxxx Xxxxxxx, Xxx 00000
If to Union Atlantic Capital, L.C.: 0000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxx
9. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties. It may not be changed except by agreement in writing signed
by the party against whom enforcement of any waiver, change, discharge, or
modification is sought. Waiver of or failure to exercise any rights provided by
this Agreement in any respect shall not be deemed a waiver of any further or
future rights.
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10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, acknowledgments and agreements of Union Atlantic and the Company
shall survive the termination of this agreement.
11. GOVERNING LAW. This Agreement shall be construed according to the
laws of the State of Florida and subject to the jurisdiction of the courts of
said state, without application of the principles of conflicts of laws.
12. SUCCESSORS. This Agreement shall be binding upon the parties, their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX HEALTHCARE, INC.
By:/S/ XXXXX X. XXXXXXXX
Name: XXXXX X. XXXXXXXX
Title: EVP-FINANCE & CAO
UNION ATLANTIC LC
By:/S/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: President
UNION ATLANTIC CAPITAL, LC
By:/S/ XXXXXXXX XXXXXXXXX
Name: Xxxxxxxx Xxxxxxxxx
Title: Managing Director
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