December 21, 1998
Xx. Xxxxx Xxxxxx
President and CEO
Navidec, Inc.
00 Xxxxxxxxx Xxxxx, Xxxxxxxx X, Xxxxx 000 Xxxxxxxxx, XX 00000
Re: Engagement Agreement
Dear Xxxxx:
This letter (the "Engagement Letter" or "Agreement") will confirm the engagement
of Bathgate XxXxxxxx Capital Group LLC (BMCG) by Navidec, inc. ("the Company")
to render financial and investment banking services on a non-exclusive basis as
described below.
In connection with this engagement, the Company will furnish BMCG such
information and data (the "information") relating to the Company as BMCG
reasonably requests and will provide BMCG with reasonable access to the
Company's officers, directors, employees, counsel and independent accountants.
BMCG may rely upon the Information without independently verifying it and does
not assume responsibility for its accuracy or completeness. BMCG will not make
an independent appraisal of the assets of the company but will familiarize
itself with the business operations, financial condition and prospects of the
Company, and will review such corporate documents involving the Company as BMCG
in its sole discretion deems necessary.
BMCG will provide the following services under this investment banking
agreement; BMCG will work with the Company in developing a long term financial
strategy which will include advice regarding private placements, future public
offerings and/or strategic acquisitions and partnerships. In addition, BMCG will
work with the various other consultants of the Company in an effort to broaden
the exposure of the company in the financial marketplace.
In consideration of BMCG's services, the Company agrees to pay BMCG a consulting
fee of $60,000, payable $48,000 with the execution of the Engagement Letter and
$3,000 per month beginning February 1, 1999 ending May 1, 1999. In addition, the
Company agrees to pay a consulting fee of 45,000 warrants exercisable at $2.00
per share. The Company also agrees to reimburse BMCG for any reasonable
out-of-pocket expenses incurred by BMCG in connection with services under this
engagement, provided all such expenses are approved in advance by the Company.
BMCG will be paid a Xxxxxx formula fee in the event the company acquires any
entity or the substantial assets of any entity introduced by BMCG. Other
transactions will be negotiated on a case-by-case basis.
1. Liability of BMCG. In furnishing the Company with advice and other services
as herein provided, neither BMCG nor any officer, director or agent thereof
shall be liable to the company or its creditors for errors of judgment or
anything except willful malfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations and
duties under the terms of this agreement.
It is further understood and agreed that BMCG may rely solely upon information
furnished to it by the company reasonably deemed to be accurate and reliable and
that, except as herein provided, BMCG shall not be accountable for any loss
suffered by the Company by reason of the Company's non-action on the basis of
any advice, recommendation or approval of BMCG, its partners, employees or
agents.
2. Representations & Indemnification. The Company represents and warrants to
BMCG that: the Company will not cause or knowingly permit any action to be taken
in connection with transactions which violates the Securities Act of 1933 or any
state securities laws; the Company will cooperate with BMCG so as to permit the
transactions to be conducted in a manner consistent with the applicable state
and federal securities to be conducted in a manner consistent with the
applicable state and federal securities laws; that all information and
statements provided by the Company in the transactions will be true and correct;
that the transactions will not be misleading or violative of the Anti-fraud
provisions of the Securities and Exchange Act of 1934; current company
management as disclosed to BMCG will continue in place after the transactions
for a reasonable period of time; the Company does not know of any facts
adversely affecting the company's current business strategy; the Company has
prepared and delivered to the undersigned its most recent estimate of sales,
earnings, cash flow and agrees to update those estimates on a monthly basis
during the pendency of the engagement and any transactions. The Company agrees
to indemnify and hold BMCG and its attorneys accountants, agents and employee,
officers and disectors, free and harmless from any liability, cost and expense,
including attorneys' fees in the event of a breach of this representation and
warranty. The Company shall also assume responsibility for the indemnitees'
defense in any such matters, except where a conflict exists such that they are
required to retain separate legal counsel, in which event, the Company shall pay
the legal fees and expenses, as and when occurred, of separate legal counsel
retained by the Indemnitees to provide such defense.
3. Other Activities of BMCG. The Company recognizes that BMCG now renders and
may continue to render consulting, financial and other services to other
companies which may or may not have policies and conduct similar to those of the
Company. BMCG shall be free to render such advice and other services and the
company hereby consents thereto. BMCG shall not be required to devote its full
time and attention to the performance of its duties under this agreement, but
shall only devote so much of its time and attention as it deems reasonable or
necessary for such purpose. BMCG does not intend to be engaged by a direct
competitor of the company without prior written approval.
4. Control. Nothing contained herein shall be deemed to require the company to
take any action contrary to its Certificate of Incorporation or By-Laws, or any
applicable statute or regulation, or to deprive its Board of Directors of their
responsibility for any control of the conduct or the affairs of the Company.
5. Conditions of Performance by BMCG. Notwithstanding anything to the contrary
hereinabove set forth, the performance of the obligations of BMCG as provided in
the Engagement Letter is specifically subject to and conditioned upon the
following:
(a) successful completion of investigative procedures to be conducted by
BMCG in respect to the Company, its operations and general performance as well
as its officers, and directors (commonly referred to as "due diligence"
procedures).
(b) results of the due diligence procedures employed by BMCG satisfactory
to BMCG in its sole determination; and
(c) receipt by BMCG of the compensation referred to hereinabove.
The term of this Agreement will be six months with the date of your acceptance
of this Engagement Letter as evidenced below. BMCG or the Company may cancel
this Agreement upon 30 days written notice. Notwithstanding anything to the
contrary in the prior sentence hereto, the Company will remain obligated to pay
BMCG compensation as set forth above.
This Engagement Letter set forth the entire understanding of the parties
relating to the subject matter hereof and supersedes and cancels any prior or
contemporaneous communications, understandings or agreements between the
parties. This Agreement cannot be modified or changed, nor can any of its
provisions be waived, except by written agreement signed by all parties hereto.
This Agreement shall be governed by and construed to be in accordance with the
laws of the State of Colorado applicable to contracts made and to be performed
solely in such State by citizens thereof. The parties hereto shall deliver
notices to each other by personal delivery or by registered mail (return receipt
requested) at the address set forth herein.
All controversies or claims between the parties hereto or arising out of or
relating to the business contemplated by this Agreement including but not
limited to the making or enforcement of documents relating thereto, shall be
resolved by arbitration in accordance with the applicable rules of the American
Arbitration Association. Judgment on the arbitrators' award may be entered into
any court having jurisdiction. If any action or proceeding is brought to enforce
the terms if this Agreement, the prevailing party shall be entitled to recover
all of its reasonable attorneys' fees and costs.
If the terms and conditions of this Engagement Agreement confirm our agreement
and understanding, please execute the copy of this Engagement Agreement in the
space provided below and return it to us.
Very truly yours,
BATHGATE XXXXXXXX CAPITAL GROUP LLC
By: /s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
Agreed to and accepted this 21st day of December, 1998.
NAVIDEC, INC.
By: /s/Xxxxx Xxxxxx
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Xxxxx Xxxxxx
President and CEO
