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Consulting Agreement dated October 5, 1997
between the Company and First Taconic
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FIRST TACONIC CAPITAL CORPORATION
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (000) 000-0000
October 5, 1996
PERSONAL AND CONFIDENTIAL
Xx. Xxxxxx Xxxxxxx
Chairman and CEO
AQUAGENIX, INC.
0000 Xxxxxxxxxx 00xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxx:
This letter confirms our agreement regarding your engagement and retention
of First Taconic Capital Corporation, a New York Corporation or its assigns
("FTC") to provide, on a non-exclusive basis, financial advisory services in
connection with the general corporate and operational development of Aquagenix,
Inc. (the "Company").
The Company agrees that in the course of our engagement hereunder, we will
rely entirely upon information supplied by the Company, which information the
Company hereby warrants shall be complete and accurate in all material respects
and not misleading. Accordingly, we assume no responsibility and the Company
agrees that it shall be solely responsible for the accuracy or completeness of
such information and we will not conduct any independent valuation or due
diligence review of the Company. All material non-public information concerning
the Company which is given to us will be used solely in the course of the
performance of our services hereunder and will be treated confidentially by us
for so long as it remains non-public. Except as otherwise required by law or in
the performance of our services hereunder, we will not disclose such information
to any third party.
We understand that the Company is considering the following items:
o securing up to $5 Million of senior debt;
o securing up to $5 Million of an equity investment;
o refinancing its subordinated debt on more favorable terms;
o selling a block of 250,000 shares;
o effecting the exercise of the Company's warrants;
o attracting active market makers and institutional investors;
o growing through acquisitions and internal business development;
Mr. Andrew Chelser
October 5, 1996
Page 2
o attracting quality-management and, if appropriate, board members;
and
o divesting non-core assets.
Accordingly, FTC's initial financial advisory services will be focused on
the above items.
1. FEES: The Company shall pay to us, or cause us or our designee, to be
paid, for the financial advisory services rendered under this Agreement, the
following:
(a) A non-refundable $1,500 monthly retainer, beginning January 1, 1997.
(b) In addition, the Company shall issue 100,000 warrants to FTC,
subject to board approval of Aquagenix, Inc.
(c) In addition, FTC shall receive standard success fees associated with
the transactions being effected. The terms of such fees shall be
mutually agreed upon at the appropriate time.
2. EXPENSES: In addition to the fees that are payable to us hereunder and
regardless of whether a Sale Transaction is proposed or consummated, the Company
hereby agrees, from time to time upon request, to reimburse us for our
reasonable out-of-pocket expenses incurred in connection with our engagement
hereunder. All individual expenses over $500.00 shall be pre-approved by the
Company's Chairman.
3. TERM OF ENGAGEMENT: The term of this Agreement is for 180 days and will
automatically extend each month thereafter unless terminated. This Agreement may
be cancelled by the Company or by us at any time with or without cause upon
thirty (30) days prior written notice to the other party. Regardless of the date
of termination, FTC shall be entitled to its full fees described in Section 1 in
the event a Transaction is completed by the Company within one year of
termination. Sections 2, 4, 5 and 6 (entitled Expenses, Public References,
Indemnification and Jurisdiction, respectively) of this Agreement shall survive
termination indefinitely.
4. PUBLIC REFERENCES: The Company acknowledges that all opinions and advice
(written or oral) provided by us to the Company pursuant to this engagement are
intended solely for the benefit and use of the Company (including its
management, directors and advisers) and the Company agrees that no such opinion
or advice shall be used, reproduced, disseminated, quoted or referred to any
time, in any manner or for any purpose, nor shall any public references to us or
our affiliates be made by the Company, without our prior written consent.
Mr. Andrew Chelser
October 5, 1996
Page 3
5. INDEMNIFICATION: The Company agrees to indemnify and hold harmless First
Taconic Capital Corporation and its affiliates, the respective directors,
officers, agents and employees of FTC and its affiliates and each other person,
if any, controlling FTC or its affiliates from and against any and all losses,
claims, damages, or liabilities (or actions in respect thereof) related to or
arising out of any transaction contemplated by this Agreement, our engagement
pursuant to this Agreement or the services to be performed by us in connection
therewith, and will reimburse FTC and any other party entitled to be indemnified
hereunder for all expenses (including fees and expenses of counsel) as they are
incurred by us or any such other indemnified party in connection with pending or
threatened litigation, and whether or not FTC is a party to such action, claim
or pending or threatened litigation.
The Company will not, however, be responsible for any claims, liabilities,
losses, damages or expenses that result directly from any indemnified party's
gross negligence in performing the services which are the subject of this
Agreement. The Company also agrees that neither FTC, nor any of its affiliates
nor any director, officer, employee, member, or agent of FTC or any of its
affiliates shall have liability (whether direct or indirect, in contract or tort
or otherwise) to the Company in connection with any transaction, our engagement
pursuant to this Agreement, or the services performed by us in connection
therewith except for any liability for such losses, claims, damages, or expenses
incurred by the Company that result directly from our gross negligence in
performing the services which are the subject of this Agreement.
If for any reason indemnification is unavailable to us or is insufficient
to hold us harmless, then the Company shall contribute to the amount paid or
payable by FTC as a result of such loss, claim, damage or liability in
proportions as is appropriate to reflect not only the relative benefits received
by the Company on the one hand and us on the other hand but also the relative
fault of the Company and us, as well as any other relevant equitable
consideration. Notwithstanding the foregoing, under no circumstances shall our
aggregate contribution to any losses, claims, liabilities, damages and expense
with respect to which contribution is available hereunder exceed the amount of
fees actually received by us hereunder.
6. JURISDICTION: This Agreement is being executed by us in the State of
Florida and it is understood that we will perform substantially all of the
required services hereunder in that state. Accordingly, the Agreement and all
questions relating to its validity, interpretation, performance and enforcement
shall be governed by, and construed, interpreted and enforced in accordance with
the internal laws, ad not the law of conflicts of law, of the State of Florida.
The Company hereby irrevocably and unconditionally consents to submit to the
jurisdiction of the courts of the State of Florida for any actions, suits or
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby (and the Company agrees not to commence any action, suit or
proceeding relating thereto except in such courts).
Mr. Andrew Chelser
October 5, 1996
Page 4
This Agreement sets forth the entire understanding of the parties relating
to the subject matter hereof, and supersedes and cancels any prior
communication, understandings and agreements between parties hereto. This
Agreement cannot be modified or changes, nor can any of its provisions be
waived, except by written agreement signed by both parties. The benefits of the
Agreement shall inure to the respective successors and assigns of the parties
hereto and of the indemnified parties hereunder and their successors and assigns
and representatives, and the obligations and liabilities assumed in this
Agreement by the parties hereto shall be binding upon their respective
successors and assigns.
Please confirm that the foregoing is in accordance with your understanding
by signing and returning the duplicate of this letter to the undersigned. We
look forward to working with you on this assignment.
Yours sincerely,
First Taconic Capital Corporation
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Principal
ACCEPTED AND AGREED TO:
Aquagenix, Inc.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, Chairman
Date: October 5, 1996
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