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EXHIBIT 10.56
Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 1
Board of Directors
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Dear Sirs:
This will confirm the understanding and agreement (the "Agreement")
between Prudential Securities Incorporated ("Prudential Securities") and Vision
Twenty-One, Inc. (the "Company") as follows:
1. The Company hereby engages Prudential Securities, and
Prudential Securities hereby accepts such engagement, as the
Company's exclusive financial advisor in connection with the
Company's proposed acquisition of BBG-COA, Inc. d.b.a. Block
Vision (the "Acquiree").
2. For purposes of this Agreement:
(a) The "Acquisition" shall mean any transaction or
series or combination of transactions, other than in
the ordinary course of trade or business, whereby,
directly or indirectly, control of, or a material
interest in, the Acquiree or any of its businesses,
assets or properties is purchased, leased or
otherwise acquired, including, without limitation, a
sale or exchange of capital stock or assets, a lease
of assets with or without a purchase option, a merger
or consolidation, a tender or exchange offer, a
leveraged buy-out, the formation of a joint venture
or partnership, a minority investment or any other
similar transaction. In the case of a tender or
exchange offer or a multi-step transaction which
contemplates the acquisition of more than 50% of the
Acquiree's voting power, the acquisition shall be
deemed to have been consummated upon the acquisition
by the Company of 50% or more of the Acquiree's
outstanding voting power or the ability to elect a
majority of the Board of Directors or similar body or
entity.
(b) "Consideration" shall mean the total value of all
cash, securities, the repurchase or buy-out of any
options or warrants, any agreements or other
property and any other consideration, including,
without limitation, any contingent, earned or other
consideration, paid or payable, directly or
indirectly, in connection with the Acquisition. The
value of any such securities (whether debt, equity,
options or warrants) other property or
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Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 2
agreements shall be determined as follows: (1) the
value of securities that are freely tradeable in an
established public market shall be the last closing
market price of such securities prior to the public
announcement of the Acquisition; and (2) the value
of securities which are not freely tradeable or
which have no established public market, or if the
consideration consists of property or agreements
other than securities, the value of such securities
or other property or agreements shall be the fair
market value thereof as mutually agreed by the
Company and Prudential Securities. Consideration
shall be deemed to include any indebtedness,
including, without limitation, pension liabilities,
guarantees and other obligations, directly or
indirectly, assumed in connection with, or which
survives the closing of, the Acquisition.
3. The term of Prudential Securities engagement hereunder shall
extend from the date hereof until terminated. Either party may
terminate Prudential Securities engagement hereunder at any
time, with or without cause, by giving the other party at
least 10 days' prior written notice, subject to the provisions
of paragraphs 4 through 13, which shall survive any
termination (hereinafter "Termination") of this Agreement.
4. As compensation for the services rendered by Prudential
Securities hereunder, the Company shall pay Prudential
Securities as follows:
(a) Upon execution of this Agreement, the Company shall
issue to Prudential Securities warrants to purchase
25,000 shares of common stock of the Company (the
"Retainer Warrants"). The Retainer Warrants shall
expire five years from the date of the Agreement and
shall have an exercise price equal to the closing
price of the Company's common stock on the date of
this Agreement.
(b) If the Company announces or enters into an agreement
with respect to the Acquisition either during the
term of Prudential Securities engagement hereunder
or at any time during a period of 24 months
following the effective date of Termination of
Prudential Securities engagement hereunder, and the
Acquisition is thereafter consummated, then the
Company shall pay to Prudential Securities a success
fee of 2% of the Consideration paid in the
Acquisition, provided that such success fee shall be
at least $500,000.
(c) Compensation which is payable to Prudential
Securities pursuant to subparagraph 4(b) shall be
paid in cash by the Company to Prudential Securities
upon the consummation of the Acquisition, provided
that compensation paid or payable to Prudential
Securities in respect of
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Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 3
Consideration which is contingent upon the
occurrence of some future event (e.g., the
realization of earnings projections) or pursuant to
the agreement relating to the Acquisition is to be
paid following the closing of the Acquisition shall
be paid by the Company to Prudential Securities at
the earlier of (i) the payment of such Consideration
or (ii) the time that the amount of such
Consideration can be determined.
5. The Company shall reimburse Prudential Securities for its
out-of-pocket and incidental expenses incurred in connection
with its engagement hereunder, promptly as requested,
including the fees and expenses of its legal counsel and
those of any advisor retained by Prudential Securities.
6. Because Prudential Securities will be acting on behalf of the
Company in connection with its engagement hereunder, the
Company agrees to indemnify Prudential Securities as set
forth in a separate letter agreement dated the date hereof
between Prudential Securities and the Company.
7. Prudential Securities shall have the right to place
advertisements in financial and other newspapers and journals
at its own expense describing its services to the Company
hereunder.
8. The Company acknowledges and agrees that Prudential
Securities will be using and relying upon the accuracy and
completeness of (i) information supplied by the Company, (ii)
publicly available information concerning the Acquiree, as
well as (iii) any information concerning the Acquiree
supplied by the Acquiree, without any independent
investigation or verification thereof or independent
appraisal by Prudential Securities of the Acquiree or its
business or assets.
9. Any advice, either oral or written, provided to the Company
by Prudential Securities hereunder shall not be publicly
disclosed or made available to third parties without the
prior written consent of Prudential Securities. In addition,
Prudential Securities may not be otherwise publicly referred
to without its prior consent.
10. In the event that any bridge loan or interim financing is to
be used in connection with the Acquisition, Prudential
Securities and its affiliates shall have the right to provide
all or a portion of such financing. In addition, if the
Company determines to raise funds for the Acquisition by
means of a public offering or a private placement, Prudential
Securities shall have the right to act as lead underwriter or
placement agent for such financing. Any decision by
Prudential Securities or its affiliates to provide such
financing or act in such capacity would be contained in a
separate letter which would include, among other things,
customary fees, indemnification, the terms of such financing,
conditions precedent, including due
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Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 4
diligence, current conditions and approval by the requisite
committees, as well as customary representations and
warranties.
11. The Company represents and warrants to Prudential Securities
that there are no brokers, representatives or other persons
which have an interest in compensation due to Prudential
Securities from any transaction contemplated herein.
12. The benefits of this Agreement, together with the separate
indemnity letter, shall inure to the respective successors
and assigns of the parties hereto and of the indemnified
parties hereunder and their successors, assigns and
representatives, and the obligations and liabilities assumed
in this Agreement by the parties hereto shall be binding upon
their respective successors and assigns.
13. (a) This Agreement may not be amended or modified
except in writing and shall be governed by and
construed in accordance with the laws of the State
of New York, without regard to principles of
conflicts of laws.
(c) EACH OF PRUDENTIAL SECURITIES AND THE COMPANY (ON
ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ON BEHALF OF ITS SHAREHOLDERS)
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING
OUT OF THE ENGAGEMENT OF PRUDENTIAL SECURITIES
PURSUANT TO, OR THE PERFORMANCE BY PRUDENTIAL
SECURITIES OF THE SERVICES CONTEMPLATED BY THIS
AGREEMENT.
Prudential Securities is delighted to accept this engagement and looks
forward to working with you on this assignment. Please confirm that the
foregoing correctly sets forth our
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Highly Confidential - October 14, 1997
Subject to BRC Approval
Page 5
agreement by signing the enclosed duplicate of this letter in the space
provided and returning it, whereupon this letter shall constitute a binding
agreement as of the date first above written.
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxx Xxxxxxxx
--------------------------------
Director
AGREED:
VISION TWENTY-ONE, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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President/CEO
