FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the 21st day of August, 1996
by and between May Xxxxx Group, Inc., a Florida corporation ("MDG"), and Netlive
Communications, 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 MDG 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 for a three (3) year period commencing August 12,
1996 and ending August 11, 1999.
3. Duties of MDG: During the term of this Agreement, MDG 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.
4. Compensation: In consideration for the services rendered by MDG to the
Company pursuant to this Agreement (and in addition to the expenses provided for
in Paragraph 5 hereof), the Company shall compensate MDG as follows:
(a) The Company shall pay MDG a fee of $2,500 per month for the term
of this Agreement. The aggregate sum of $90,000 shall be due and payable upon
the execution of this Agreement.
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(b) In the event that any Transaction occurs during the term of this
Agreement, the Company shall pay fees to MDG as follows:
Consideration Fee
------------- ---
$ - 0 - to $ 500,000 $25,000
Above $ 500,000 to $5,000,000 5% of Consideration
Above $5,000,000 $250,000 plus 1% of the
Consideration in excess of
$5,000,000
For the purposes of this Agreement, "Consideration" shall mean the
total market value, as determined by the Company's Board of Directors on the day
of the closing of the Transaction, 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
retained by MDG shall be paid by MDG.
(c) For the purposes of the Agreement, a "Transaction" shall mean (i)
any transaction introduced to the Company by MDG, 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
substantially all of its assets, is transferred for Consideration, or (ii) any
transaction introduced to the Company by MDG whereby the Company acquires any
other unaffiliated company or substantially all of the assets of any other
unaffiliated company or a controlling interest in any other company (an
"Acquisition").
In the event MDG originates, at the Company's request, a line of
credit with a lender or a corporate partner, the Company and MDG will mutually
agree on a satisfactory
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fee and the terms of payment of such fee. In the event MDG 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 two percent (2%) of total
sales generated directly from this introduction during the first two years
following the date of the first sale. Total sales shall mean gross receipts less
any applicable refunds, returns, allowances, credits, taxes 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 third 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, at its option, to an
appropriate refund or credit against future payments under this Agreement.
(d) All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to MDG in cash or company check at the
closing or closings of any Transaction specified in Paragraph 4. In the event
that the Consideration is paid out over a period of time, MDG shall be paid its
pro-rata portion of such Consideration as the Company is paid. In the event that
this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, MDG shall be entitled to a
full fee as provided under Paragraphs 4 and 5 hereof, for any Transaction for
which the discussions were initiated with a third party at the request of the
Company 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.
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5. Expenses of MDG: 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 MDG for MDG's reasonable
travel and out-of-pocket expenses incurred in connection with the services
performed by MDG pursuant to this Agreement and at the request of the Company,
including without limitation, hotels, food and associated expenses and
long-distance telephone calls, except that all expenses exceeding $100 must be
preapproved in writing by the Company and that total expenses may not exceed
$1,000.
6. Liability of MDG:
(1) The Company acknowledges that all opinions and advice (written or
oral) given by MDG to the Company in connection with MDG's 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 MDG 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 MDG, or use MDG's name in any annual reports or any other reports
or releases of the Company without MDG's prior written consent or as required by
law.
(2) The Company acknowledges that MDG 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. Research reports or corporate
finance reports that may be prepared by MDG will, when and if prepared, be done
solely on the merits or judgment of analysis of MDG or any senior corporate
finance personnel of MDG.
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7. MDG's Services to Others: The Company acknowledges that MDG 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 MDG in conducting such business with respect to others, or in rendering
such advice to others, except that MDG will not provide services to others when
such services may materially and adversely affect the Company.
8. Company Information:
(a) The Company recognizes and confirms that, in advising the Company
and in fulfilling its engagement hereunder, MDG will use and rely on data,
material and other information furnished to MDG by the Company. The Company
acknowledges and agrees that in performing its services under this engagement,
MDG may rely upon the data, material and other information supplied by the
Company without independently verifying the accuracy, completeness or veracity
of same.
(b) Except as required by applicable law, MDG 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 MDG reasonably determines to
have a need to know, provided, that MDG shall instruct such employees and
advisors to keep such information confidential and MDG shall be liable for any
breach of such confidentiality. In the event that MDG is required by subpoena to
disclose such information, the Company shall be afforded an opportunity to seek
an order preserving the confidentiality of such information.
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9. Indemnification:
(a) The Company shall indemnify and hold MDG 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 costs, expenses, awards and/or
judgments) arise out of or are in connection with the services rendered by MDG
or any transactions in connection with this Agreement, except for any
liabilities, claims and lawsuits (including awards and/or judgments), arising
out of acts or omissions of MDG. In addition, the Company shall also indemnify
and hold MDG harmless against any and all costs and expenses, including
reasonable counsel fees, incurred relating to the foregoing.
MDG shall give the Company prompt notice of any such liability, claim
or lawsuit which MDG 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 and
provided that no such settlement shall be made without the prior consent of MDG.
MDG 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 1933 Act, the 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
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judgments) arise out of or are in connection with the services rendered by MDG
or any transactions in connection with this Agreement. In addition, MDG shall
also indemnify and hold the Company harmless against any and all costs and
expenses, including reasonable counsel fees, incurred relating to the foregoing.
The Company shall give MDG prompt notice of any such liability, claim
or lawsuit which the Company contends is the subject matter of MDG' s
indemnification and MDG 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 and
provided that no such settlement shall be made without the prior consent of the
Company.
(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
Paragraph 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 Paragraph 9 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
Paragraph 9, then, and in each such case, the Company and MDG 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 transactions
undertaken in connection with this Agreement (taking
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into account the portion of the proceeds 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; 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 Paragraph 9 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
10. MDG an Independent Contractor: MDG shall perform its services
hereunder as an independent contractor and not as an employee of the Company or
an affiliate
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thereof. The parties hereto expressly understand and agree that MDG 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.
11. Miscellaneous:
(1) This Agreement between the Company and MDG 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) All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to MDG, shall be mailed,
delivered or telegraphed and confirmed to May Dais Group, Inc., 00 Xxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President, with a copy to Gersten,
Savage, Kaplowitz & Xxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxx Xxxxxxxxx, Esq., and if to the Company, shall be mailed,
delivered or telegraphed and confirmed to Netlive Communications, Inc., 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxx, with a copy to
Gusrae, Xxxxxx & Bruno, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxxx X. Xxxxxxx, Esq.
(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 its 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(2) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
MAY XXXXX GROUP, INC.
By: ____________________________________
Name:
Title:
NETLIVE COMMUNICATIONS, INC.
By: ____________________________________
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