CONSULTING AGREEMENT
____________, 1998
Xxxx Xxxxxx Golf, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
Chief Executive Officer
Dear Xx. Xxxxx:
This will confirm the arrangements, terms and conditions
pursuant to which Whale Securities Co., L.P. ("Consultant"), has been retained
to serve as a financial consultant and advisor to Xxxx Xxxxxx Golf, Inc., a
Delaware corporation (the "Company"), on a non-exclusive basis for a period of
two (2) years commencing on ________________, 1998. The undersigned hereby
agrees to the following terms and conditions:
1. Duties of Consultant. Consultant shall, at the request of
the Company, upon reasonable notice, render the following services to the
Company from time to time:
(a) Consulting Services. Consultant will provide
such financial consulting services and advice pertaining to the Company's
business affairs as the Company may from time to time reasonably request.
Without limiting the generality of the foregoing, Consultant will assist the
Company in developing, studying and evaluating financing and merger and
acquisition proposals based upon documentary information provided to the
Consultant by the Company.
(b) Financing. Consultant will assist and
represent the Company in obtaining both short and long-term financing. The
Consultant will be entitled to additional compensation under certain
circumstances in accordance with the terms set forth in Section 3 hereof.
(c) Wall Street Liaison. Consultant will, when
appropriate, arrange meetings between representatives of the Company and
individuals and financial institutions in the investment community, such as
security analysts, portfolio managers and market makers.
The services described in this Section 1 shall be rendered by
Consultant without any direct supervision by the Company and at such time and
place and in such manner (whether by conference, telephone, letter or otherwise)
as Consultant may determine.
2. Compensation. As compensation for Consultant's services
hereunder, the Company shall pay to Consultant an annual fee of Fifteen Thousand
Dollars ($15,000), the entire Thirty Thousand Dollars ($30,000) payable in full,
in advance, on _______________, 1998.
3. Additional Compensation in Certain Circumstances. If, at
any time up until the second anniversary of the date hereof, the Company enters
into an agreement with any "Qualifying Person" (as hereinafter defined), the
Company purchases substantially all of the stock or assets of another entity or
the Company is merged with or into another entity, or pursuant to which the
Company enters into a joint venture or other on or off balance sheet corporate
finance transaction (each a "Transaction"), the Company will pay to Consultant,
in accordance with the formula set forth below, additional compensation based on
the aggregate value of the consideration, whether in cash, securities,
assumption of (or purchase subject to) debt or liabilities (including, without
limitation, indebtedness for borrowed money, pension liabilities and
guarantees), or other property, obligations or services, paid or payable
directly or indirectly (in escrow or otherwise) or otherwise assumed in
connection with such Transaction (the "Consideration"). For purposes of this
Section 3, (i) the "Company" shall include its subsidiaries and any other entity
in which it owns (directly or indirectly) a majority interest; and (ii)
"Qualifying Person" shall mean any person or entity which Consultant has
introduced to the Company, or any affiliate thereof, after (I) Consultant has
advised the Company that (a) it intends to make an introduction of such person
or entity (without identifying the name or names) for purposes of a Transaction
and, if requested by the Company in writing, provide general information
regarding the type of Transaction and/or business of such entity, and (b) with
respect to which the Company notifies Consultant in writing within five (5)
business days after Consultant identifies such person or entity to the Company,
that neither the Company nor Xxxx Xxxxxx Group, Inc. ("GPG"), nor any of their
respective directors, executive officers or principal shareholders, have had
discussions within the prior twelve months with respect to a potential
transaction (either involving the Company or GPG or any subsidiary or affiliate
of either entity) or otherwise have had a significant business relationship.
The additional compensation to be paid will be paid upon the
closing of the Transaction (except that, if any part of the
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Consideration is in the form of contingent payments to be calculated to
reference to uncertain future occurrences, such as future financial or business
performance, than the portion of the fees of Consultant relating to such part of
the Consideration shall be payable at the earlier of (i) the receipt or payment
of such Consideration; or (ii) the time that the amount of such Consideration
can be determined, by certified check, in the following amounts:
5% of the first $5,000,000 of the Consideration;
4% of the Consideration in excess of $5,000,000 and up to
$6,000,000;
3% of the Consideration in excess of $6,000,000 and up to
$7,000,000;
2% of the Consideration in excess of $7,000,000 and up to
$8,000,000; and
1% of any Consideration in excess of $8,000,000.
4. Available Time. Consultant shall make available such time
as it, in its sole discretion, shall deem appropriate for the performance of its
obligations under this agreement and may in certain circumstances be entitled to
additional compensation in connection therewith.
5. Relationship. Nothing herein shall constitute Consultant as
an employee or agent of the Company, except to such extent as might hereinafter
be agreed upon for a particular purpose. Except as might hereinafter be
expressly agreed, Consultant shall not have the authority to obligate or commit
the Company in any manner whatsoever.
6. Confidentiality. Except in the course of the performance of
its duties hereunder, Consultant agrees that it shall not disclose any trade
secrets, know-how, or other proprietary information not in the public domain
learned as a result of this Agreement unless and until such information becomes
generally known.
7. Assignment and Termination. This Agreement shall not be
assignable by any party except to successors to all or substantially all of the
business of either party for any reason whatsoever without the prior written
consent of the other party, which consent may be arbitrarily withheld by the
party whose consent is required.
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8. Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State of New York and for all purposes shall
be construed in accordance with the laws of said State.
Very truly yours,
WHALE SECURITIES CO., L.P.
By: Whale Securities Corp.,
General Partner
By:
--------------------------
Name:
Title:
AGREED AND ACCEPTED:
XXXX XXXXXX GOLF, INC.
By:
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Name:
Title:
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