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EXHIBIT 4.2
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the _____ day of____ ,
1997 by and between May Xxxxx Group, Inc. ("May Xxxxx"), and Euro Tech Holdings
Company Limited ("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 May Xxxxx 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_________________, 1997 and ending to______________, 2000.
3. DUTIES OF MAY XXXXX: During the term of this Agreement, May
Xxxxx 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
May Xxxxx to the Company pursuant to this Agreement (and in addition to the
expenses provided for in Paragraph 5 hereof), the Company shall compensate May
Xxxxx as follows:
(a) The Company shall pay May Xxxxx a fee of $3,000 per month for the
term of this Agreement. The aggregate sum of $108,000 shall be due and payable
upon the execution of this Agreement.
(b) In the event that any Transaction occurs during the term of this
Agreement or to the extent provided herein, one year thereafter, the Company
shall pay fees to May Xxxxx as follows:
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Consideration Fee
$ - 0 - TO $ 500,000 MINIMUM FEE OF $25,000
$ 500,000 TO $5,000,000 5% OF CONSIDERATION
$5,000,000 OR MORE $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 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 RETAINED BY MAY XXXXX SHALL BE PAID BY MAY XXXXX.
(c) For the purposes of the Agreement, a "Transaction" shall mean (i)
any transaction originated by May Xxxxx, 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, or (ii) any transaction
originated by May Xxxxx whereby the Company acquires any other company or the
assets of any other company or an interest in any other company (an
"Acquisition").
In the event May Xxxxx originates a line of credit with a lender or a
corporate partner, the Company and May Xxxxx will mutually agree on a
satisfactory fee and the terms of payment of such fee. In the event May Xxxxx
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. 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 to an
appropriate refund or credit against future payments under this Agreement.
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(d) All fees to be paid pursuant to this Agreement, except as otherwise
specified, are due and payable to May Xxxxx in cash or company check at the
closing or closings of any Transaction specified in Paragraph 4. In the event
that this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, May Xxxxx 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. Nothing herein shall impose any obligation on the
part of the Company to enter into any Transaction.
5. EXPENSES OF MAY XXXXX: 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 May Xxxxx for the
reasonable fees and disbursements of May Xxxxx'x counsel and May Xxxxx'x
reasonable travel and out-of-pocket expenses incurred in connection with the
services performed by May Xxxxx 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 individual expenses exceeding
$500 must be pre-approved in writing by the Company and that total non
pre-approved expenses may not exceed $10,000.
6. LIABILITY OF MAY XXXXX: The Company acknowledges that all
opinions and advice (written or oral) given by May Xxxxx to the Company in
connection with May Xxxxx'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 May Xxxxx 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 May Xxxxx, or use May
Xxxxx'x name in any annual reports or any other reports or releases of the
Company without May Xxxxx'x prior written consent.
The Company acknowledges that May Xxxxx 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 May Xxxxx will, when and if
prepared, be done solely on the merits or judgment of analysis of May Xxxxx or
any senior corporate finance personnel of May Xxxxx.
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7. MAY XXXXX'X SERVICES TO OTHERS: The Company acknowledges
that May Xxxxx 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 May Xxxxx in conducting such business with
respect to others, or in rendering such advice to others, except that May Xxxxx
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, May Xxxxx will use and rely on data,
material and other information furnished to May Xxxxx by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, May Xxxxx 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 contemplated by the terms hereof or as required by
applicable law, May Xxxxx 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 May Xxxxx reasonably determines to have a need to
know.
9. INDEMNIFICATION:
(a) The Company shall indemnify and hold May Xxxxx 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 May Xxxxx 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 May Xxxxx. In addition, the
Company shall also indemnify and hold May Xxxxx harmless against any and all
costs and expenses, including reasonable counsel fees, incurred relating to the
foregoing.
May Xxxxx shall give the Company prompt notice of any such
liability, claim or lawsuit which May Xxxxx contends is the subject matter of
the Company's indemnification and the Company thereupon
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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.
May Xxxxx 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
judgments) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact required to be stated or necessary to make the
statement therein, not misleading, which statement or omission was made in
reliance upon information furnished in writing to the Company by or on behalf of
May Xxxxx for inclusion in any registration statement or prospectus or any
amendment or supplement thereto or in connection with any Transaction to which
this Agreement applies or which otherwise arises. In addition, May Xxxxx 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 May Xxxxx prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
May Xxxxx'x indemnification and May Xxxxx 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.
(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 May Xxxxx shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject
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(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 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, which consent shall not be
unreasonably withheld. 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. MAY XXXXX AN INDEPENDENT CONTRACTOR: May Xxxxx shall
perform its services hereunder as an independent contractor and not as an
employee of the Company or an affiliate thereof. The parties hereto expressly
understand and agree that May Xxxxx 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:
(a) This Agreement between the Company and May Xxxxx constitutes the
entire agreement and understanding of the parties hereto, and supersedes any and
all previous agreements and understandings, whether
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oral or written, between the parties with respect to the matters set forth
herein.
(b) Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if hand- delivered (i) five
calendar days after being sent postage prepaid by registered mail, return
receipt requested, or (ii) one business day after being sent by facsimile with
confirmatory notice by U.S. mail, 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: EURO TECH HOLDINGS COMPANY LIMITED
WITH A COPY TO:
IF TO MAY XXXXX, TO: MAY XXXXX GROUP, INC.
00 Xxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx
WITH A COPY TO: XXX X. XXXXXXXXX, ESQ.
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GERSTEN, SAVAGE, XXXXXXXXX
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XXXXXXXXXX & XXXXXX
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000 XXXX 00XX. XXXXXX
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XXX XXXX, XXX XXXX 00000
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TELECOPY NO.: (000) 000-0000
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(c) 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.
(d) This Agreement may be executed in any number of counterparts, each
of which together shall constitute one and the same original document.
(e) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(f) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, without giving effect
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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:
EURO TECH HOLDINGS COMPANY LIMITED
By:________________________________
, President
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