EXHIBIT 10.48
NABI
0000 XXXX XX XXXXXXXX XXXXXXXXX, X.X.
XXXX XXXXX, XXXXXXX 00000
October 26, 2001
Attention: Xxxxxx X. XxXxxx
Executive Vice President and Chief Operating Officer
Dear Ladies/Gentlemen:
This letter agreement (the "Agreement") is to confirm the engagement of
Stonebridge Associates, LLC ("Stonebridge") as financial advisor to Nabi (the
"Company") in connection with the Company's review and implementation of a
corporate expansion strategy, whereby the Company intends to evaluate a range of
product or business acquisitions, joint venture, in-licensing, or other
opportunities relating to its biopharmaceutical operations (a "Contemplated
Transaction"). It is assumed that Nabi will explore these opportunities with
several target companies currently or yet to be identified ("Target Companies").
The terms and conditions of Stonebridge providing financial advisory services
are presented below.
1. FINANCIAL ADVISORY SERVICES: Stonebridge will work closely with you to:
a. Consistent with the Company's current strategic
planning process, assist management in preparing a
comprehensive business plan ("Business Plan") for
Nabi reflecting the divestiture of the majority of
its antibody business.
b. Assist in all aspects of the strategic review and
financial analysis of any Contemplated Transaction.
c. Assist management in the financial and business due
diligence investigation for each Contemplated
Transaction.
d. Assist management in preparing a consolidated
business plan that incorporates each of the
Contemplated Transactions into the Business Plan.
e. Prepare a detailed financial valuation of each
Contemplated Transaction to include
i) Valuing such transaction to provide the basis of
determining an appropriate consideration for such
transaction. The basis of such valuation will
include:
a. A comparable company analysis which examines
market valuation metrics of publicly traded
companies with similar product or business
activities;
b. A comparable transaction analysis which
examines acquisition valuation metrics for
the purchase of similar product lines or for
companies with similar business activities;
and
c. A discounted cash flow analysis which
incorporates detailed financial projections
for each transaction.
ii) Valuing Nabi today to provide a benchmark for
assessing the shareholder impact of any Contemplated
Transaction; and
iii) Valuing Nabi post-Contemplated Transaction, to
reflect all strategic and operating synergies derived
from the completion of each transaction. Such
synergies to include, among others:
a. Research and development;
b. Clinical activities;
c. Sales and marketing;
d. Manufacturing; and
e. Overhead utilization.
f. Assist the Company in reviewing and
evaluating a range of transaction structures
and proposals.
g. Advise the Company and actively participate
in all discussions and negotiations with
Target Companies.
h. As needed, assist the Company and its legal
counsel in the preparation of each
Contemplated Transaction's purchase
agreement and other legal documentation.
i. At the request of the Company or its Board
of Directors, render an opinion in writing
with respect to the fairness, from a
financial point of view, of the
consideration paid in each Contemplated
Transaction.
2. INFORMATION: Stonebridge will not distribute information regarding a
Contemplated Transaction or a Target Company (the "Information") other than to
our employees and professional advisors directly involved in this engagement,
nor will we distribute any information regarding the Company to any other party
involved in a
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Contemplated Transaction without your prior approval, and without first
obtaining a signed confidentiality agreement having terms acceptable to the
Company. We will keep strict control over the disposition of Company
information, and attempt to retrieve all copies of such information given to
parties who decide not to pursue a Contemplated Transaction.
3. COMPENSATION ARRANGEMENTS: As compensation for providing the
financial advisory services outlined herein, Stonebridge will be entitled to the
following fees:
a) A monthly retainer of $150,000 per quarter, payable in
arrears, with the first payment due three months from the
signing of an engagement letter ("Financial Advisory Fee");
plus
b) Once the cumulative consideration exchanged (as herein
defined) in successful Contemplated Transactions reaches $25
million, 0.5% of all consideration received in subsequent
Contemplated Transactions, (the "Transaction Success Fee");
plus
c) If requested, a fairness opinion fee of $50,000 payable upon
Stonebridge's delivery of the fairness opinion.
For purposes of calculating Stonebridge's success fees, consideration
shall mean the sum of the cash, fair market value of any other securities,
assets, obligations, or any other consideration agreed to be paid or provided by
or on behalf of Nabi at the closing of the Contemplated Transaction, excluding
future royalty payments and other deferred forms of payment.
In the event that the Company consummates a transaction not
specifically addressed by this proposal as part of this engagement, the Company
and Stonebridge shall, in good faith, negotiate a mutually agreeable fee
arrangement incorporating the general parameters of these fee arrangements
specifically outlined in this proposal.
4. OUT OF POCKET EXPENSES: In addition to any fees that may be payable
to Stonebridge hereunder (and regardless of whether a Contemplated Transaction
occurs), the Company hereby agrees to reimburse Stonebridge monthly for
reasonable travel and other out-of-pocket expenses incurred in performing its
services hereunder.
5. INDEMNIFICATION PROVISIONS: The Company agrees to indemnify
Stonebridge and related persons in accordance with the Standard Form of
Indemnification Agreement attached hereto as Exhibit A, the provisions of which
are incorporated herein by this reference.
6. RELIANCE ON REPORTS/ACCURACY OF INFORMATION: The Company agrees that
Stonebridge shall be entitled to rely upon all reports of the Company or Target
Companies and/or information supplied to Stonebridge by or on behalf of the
Company or Target Companies (whether written or oral), and Stonebridge shall not
in any respect
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be responsible for the accuracy or completeness of any such report or
information or have any obligation to verify the same.
7. COMMUNICATION AND ADVERTISEMENTS: Stonebridge may not be quoted or
referred to in any document, release or written or verbal communication
prepared, issued or transmitted by the Company or any entity controlled by the
Company, or any director, officer, employee, or agent thereof, without
Stonebridge's prior written authorization. The Company agrees that, subsequent
to the closing of a Contemplated Transaction, Stonebridge has the right at its
own expense to place customary advertisements in financial and other newspapers
and journals and to make mailings to its current, former or prospective clients
describing its services to the Company hereunder.
8. CONFIDENTIAL USE OF INFORMATION OR ADVICE: The Company agrees that
any information or advice rendered by Stonebridge or its representatives in
connection with this engagement is for the confidential use of the Company and
its Board of Directors only in its evaluation of a Contemplated Transaction and,
except as otherwise required by law, the Company will not and will not permit
any third party to disclose or otherwise refer to such advice or information in
any manner without Stonebridge's prior written consent. The Company's Board of
Directors and senior management will base their decisions on Stonebridge's
advice as well as on the advice of their legal, tax and other business advisors
and other factors that they consider appropriate. Accordingly, as an independent
contractor Stonebridge will not assume the responsibilities of a fiduciary to
the Company or its shareholders in connection with the performance of
Stonebridge's services.
9. ADMINISTRATION PROCEEDING AND LITIGATION: In the event of
administrative proceeding or litigation in connection with the services provided
by Stonebridge, Stonebridge agrees that its representatives will testify at the
request of the Company or its counsel. Subject to the provisions of the Standard
Form of Indemnification Agreement, the Company will reimburse Stonebridge for
all out-of-pocket expenses reasonably incurred by Stonebridge in connection
therewith, including the reasonable fees and disbursements of its legal counsel,
and the Company will pay Stonebridge reasonable and customary additional
compensation as agreed upon by Stonebridge and the Company to cover preparation
for and the expenses of testifying at such litigation or proceeding, unless such
proceeding or litigation resulted in whole or in part from the gross negligence
or willful misconduct of Stonebridge, or the illegal conduct of Stonebridge or a
breach by Stonebridge of a warranty herein.
10. TERM OF ENGAGEMENT: The term of Stonebridge's engagement as
financial advisor to the Company shall commence on the date hereof and continue
until the termination by either party upon thirty days' prior written notice;
PROVIDED, HOWEVER, that the Company cannot terminate the engagement prior to
three months. Upon termination, the Company shall pay a pro-rata share of the
earned but unpaid quarterly Financial Advisory Fee owed to Stonebridge. In no
event shall any termination of this Agreement affect the indemnification,
contribution and confidentiality obligations of the Company the confidentiality
obligation of Stonebridge, or the right of Stonebridge to
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receive any unpaid amounts due hereunder as of the date of termination or
pursuant to the following sentence. Stonebridge shall be entitled to its
appropriate success fees, in the event that any time prior to the expiration of
twelve months after termination of this Agreement a Contemplated Transaction is
consummated with any Target Companies contacted by Stonebridge or the Company
pursuant to this Agreement or with any Target Companies which contacted the
Company during the term of this Agreement. Upon termination of this Agreement,
Stonebridge will provide to the Company a written list of all such Target
Companies that have been contacted or have contacted the Company.
11. SOLE RECOURSE: The Company's sole recourse with respect to this
Agreement for any matter relating to this Agreement shall be to Stonebridge and
in no event shall the Company have any recourse or assert any claim against or
seek recovery from any other Indemnified Party as defined in the Standard Form
of Indemnification Agreement.
12. GOVERNING LAW/MISCELLANEOUS: This Agreement (a) shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts without regard to conflicts of law principles, (b) incorporates
the entire understanding of the parties with respect to the subject matter
hereof and supersedes all previous agreements should they exist with respect
thereto, (c) may not be amended or modified except in a writing executed by the
Company and Stonebridge and (d) shall be binding upon and inure to the benefit
of the Company, Stonebridge, any indemnified parties and their respective heirs,
personal representatives, successors and assigns. Except as otherwise
contemplated by Exhibit A hereto, nothing in this agreement is intended to
confer upon any other person other than the parties hereto any rights or
remedies hereunder or by reason hereof.
13. WARRANTY OF STONEBRIDGE: Stonebridge hereby represents and warrants
that it is aware that U.S. securities laws prohibit any person who has material
non-public information about a company from purchasing or selling securities of
such company and further warrants that Stonebridge will not, and that
Stonebridge has instructed its representatives that they should not, use the
Information supplied pursuant to this Agreement in any way which may violate any
securities or anti-trust law, and that Stonebridge will comply with all
applicable provisions of all federal, state and local laws and all ordinances,
rules and regulations thereunder.
14. DISCLOSURES REQUIRED BY LAW: In the event that Stonebridge is
requested or required by law to disclose any of the Information, it is agreed
that Stonebridge will provide Company with prompt prior notice of such request
so that Company may seek an appropriate protective order and/or waive compliance
with the provisions of the Agreement.
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This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement. Please confirm that the foregoing is in accordance with
your understanding by signing and returning to us a copy of this letter.
Very truly yours,
STONEBRIDGE ASSOCIATES, LLC
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
Accepted and agreed to as of
the date set forth above:
NABI
By /s/ Xxxxxx X. XxXxxx
----------------------------
Xxxxxx X. XxXxxx
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EXHIBIT A
STONEBRIDGE ASSOCIATES, LLC
STANDARD FORM OF INDEMNIFICATION AGREEMENT
In connection with the services Stonebridge Associates, LLC has agreed to render
to the Company, the Company agrees to indemnify and hold harmless Stonebridge
Associates, LLC, its officers, directors, employees, agents, managers, members,
affiliates and persons deemed to be in control of Stonebridge Associates, LLC
within the meaning of either Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as amended
(collectively, the "Indemnified Parties"), from and against any losses, claims,
damages and liabilities, joint or several, related to or arising in any manner
out of any transaction, proposal or any other matter (collectively the
"Matters") contemplated by the engagement of Stonebridge Associates, LLC
hereunder. The Company also will promptly reimburse the Indemnified Parties for
any expenses (including fees and expenses of legal counsel) as incurred in
connection with the investigation of, preparation for or defense of any pending
or threatened claim related to or arising in any manner out of any Matter
contemplated by the engagement of Stonebridge Associates, LLC hereunder, or any
action or proceeding arising therefrom, whether or not resulting in liability
(collectively, "Proceedings"). Notwithstanding the foregoing, the Company shall
not be liable in respect of any losses, claims, damages, liabilities or expenses
that a court of competent jurisdiction shall have determined by final judgment
resulted solely from the gross negligence or willful misconduct of any
Indemnified Party. Promptly after receipt by an Indemnified Party of notice of
any claim or the commencement of any action or proceeding in respect of which
indemnity may be sought against the Company, such Indemnified Party will notify
the Company in writing of the receipt of commencement thereof, and the Company
shall assume the defense of such action or proceeding (including the employment
of counsel satisfactory to the Indemnified Party and the payment of the fees and
expenses of such counsel), but the failure so to notify the Company will not
relieve the Company from any liability which it may have to any Indemnified
Party except to the extent of the Company's actual damages arising from the
failure to so notify the Company. Notwithstanding the preceding sentence, the
Indemnified Party will be entitled to employ its own counsel in such action if
the Indemnified Party reasonably determines that a conflict of interest exists
which makes representation by counsel chosen by the Company not advisable, it
being understood, however, that the Company shall not be liable for the expense
of more than one separate counsel (and one local counsel in each jurisdiction in
which it is appropriate) to represent all Indemnified Parties. In such event,
the fees and disbursements of such separate counsel will be paid by the Company.
In no event shall the Company have any liability to an Indemnified Part for any
settlement or compromise effected without the Company's written consent.
If for any reason the foregoing indemnity is unavailable to Stonebridge
Associates, LLC or insufficient to hold Stonebridge Associates, LLC harmless,
then the Company shall contribute to the amount paid or payable by Stonebridge
Associates, LLC as a result of such claims, liabilities, losses, damages or
expenses in such proportion as is appropriate to reflect not only the relative
benefits received by the Company on the one hand and Stonebridge Associates, LLC
on the other but also the relative fault of the Company and Stonebridge
Associates, LLC, as well as any relevant equitable consideration. It is hereby
further agreed that the relative benefits to the Company on the one hand and
Stonebridge Associates, LLC on the other hand with respect to the transactions
contemplated in this engagement letter shall be deemed to be in the same
proportion as (i) the total value of the transaction bears to (ii) the fees paid
to Stonebridge Associates, LLC with respect to such transaction.
The indemnity, contribution and expense reimbursement agreements and obligations
set forth herein shall apply whether or not an Indemnified Party is a formal
party to any Proceeding, shall be in addition to any other rights, remedies or
indemnification which any Indemnified Party may have or be entitled to at common
law or otherwise, and shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Indemnified Party or
any withdrawal, termination or consummation of or failure to initiate or
consummate any Matter or any termination or completion or expiration of this
letter or Stonebridge Associates, LLC's engagement.
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