Exhibit 10.1
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AGREEMENT
This agreement (the "Agreement") is made as of the 24th
day of February, 1997 ("Effective Date") by and between
Touchstone Applied Science Associates, Inc., a Delaware
corporation (the "Company"), and Xxxxxx Xxxxxxx Xxxxxxx, Inc., a
New York corporation ("MPR").
WHEREAS, the Company desires that MPR provide certain
services as set forth and more fully described in Section 2 of
this Agreement; and
WHEREAS, MPR wishes to provide the services to the
Company; and
WHEREAS, MPR is organized to provide investment banking
and financial consulting services.
NOW, THEREFORE, in consideration of the mutual
agreements herein, the Company and MPR do hereby agree as
follows:
1. Recitals. The above recitals are true, correct,
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and are herein incorporated by reference.
2. Services Rendered by MPR. MPR agrees to perform
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services including, but not limited to, (1) advice to and
consulting with the Company's management concerning investor
profile information, method of expanding investor support and
increasing investor awareness of the Company and services; (ii)
securities broker and research analyst relations, assisting in
preparation and formation of due diligence meeting, and
attendance at conventions and trade shows; (iii) making itself
available for financial public relations and marketing consult-
ing; and (iv) making itself available for personal consultations
with officers, directors and key employees of the Company, as
well as the Company's principal financial, sales and/or operating
officers. MPR and the Company shall agree on the scope and
extent of the services to be performed by MPR. MPR shall perform
such services subject to Federal and state securities laws and
regulations, and applicable rules, regulations and policies of
the National Association of Securities Dealers, Inc. (the
"NASD"), and the Securities and Exchange Commission (the
"Commission").
The Company acknowledges that neither MPR nor any of
its affiliates is an officer, director or agent of the Company,
that in rendering advice or recommendations to the Company MPR is
not and will not be responsible for any management decisions on
behalf of the Company and that MPR is not authorized or empowered
to commit or bind the Company to any recommendation, agreement or
course of action. The Company has the sole right, in the
exercise of its business judgment and discretion, to approve or
disapprove of any agreement, transaction or commitment introduced
by MPR.
MPR shall devote such of its time and efforts as it
determines is necessary to discharge its duties hereunder. The
Company acknowledges that MPR is engaged in other business
activities and that they will continue such activities during the
term of the Agreement. MPR shall not be restricted from engaging
in other business activities during the term of this Agreement,
but shall not agree to represent any direct competitor of the
Company.
3. Responsibilities of the Company. The Company
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shall provide MPR with appropriate financial and business
information about the Company as requested by MPR. In addition,
executive officers and directors of the Company shall make
themselves available for personal consultations with MPR and
certain third parties, subject to reasonable prior notice,
pursuant to the request to MPR.
4. Compensation. For the services rendered by MPR to
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the Company under the terms of this Agreement, at any time, in
consideration of the execution of this Agreement by MPR,, the
Company shall compensate MPR as follows:
(a) The Company shall issue, within 60 days, a total
of 100,000 shares of the Company's common stock which will
be registered by the Company pursuant to the federal
securities laws within six months of the date hereof. The
shares shall be restricted shares and bear a legend in
substantially the following form:
"The Shares evidenced by this Certificate
have not been registered under the Securities Act
of 1933, as amended, or applicable state securi-
ties laws, and may not be sold, transferred or
encumbered except pursuant an effective
registration statement under the Securities Act of
1933, as amended, and such state securities laws,
or unless an exemption from such registration is
then available".
(b) The Company shall issue one or more Warrants to
MPR providing for the purchase of up to Two Hundred Fifty
Thousand (250,000) shares of the Company's common stock at a
purchase price per share equal to the closing bid price of
the Company's Common Stock on the date of this Agreement.
Such Warrants shall be exercisable for a period of five (5)
years from the date first written above (the "MPR
Warrants").
(c) The Warrants may be exercised from time to time,
in whole or in part, by the Warrantholder by giving written
notice of exercise to the Company. Such notice shall
specify the number of shares of common stock with respect to
which the Warrants are then being exercised. Payment for
such shares shall be made by cash or check payable to the
Company either (A) accompanying the notice of exercise, or
(B) against delivery by the Company of the certificate(s)
representing the shares pursuant to the exercise.
(d) If at any time commencing after the date hereof
and expiring five (5) years thereafter, the Company proposes
to register any of its securities under the Securities Act
of 1933, as amended, it will give written notice by
registered mail, at least thirty (30) days prior to the
filing each of such registration statements, to MPR and its
counsel named in Section 9 hereof of its intention to do so.
If MPR or other holders of at least 50% of the outstanding
MPR Warrants and/or securities underlying such MPR Warrants
notify the Company within twenty (20) business days after
receipt of any such notice of its or their desire to include
any such securities in such proposed registration statement,
the Company shall afford MPR and such holders of the MPR
Warrants and/or shares underlying such MPR Warrants the
opportunity to have any such securities registered under
such registration statement; provided, however, that the
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Company shall not be obligated to do so more than twice; and
provided, further, that if any such registration relates to
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a firmly underwritten offering for the account of the
Company and if the managing underwriter of such offering
advises the Company in writing that, in its opinion,
inclusion of such shares as requested by MPR or the other
holders of the MPR Warrants would adversely affect such
offering, then such shares shall, to such extent, be
excluded from such registration, on such basis as the
Company shall determine to be fair and equitable.
(e) In the event that the Company receives equity or
debt financing, acquires or merges with another entity, as a
result of MPR's efforts and/or introductions, the Company
will pay MPR the following finders fee: 5% of the first
$1,000,000; 4% of the second $1,000,000; 3% of the third
$1,000,000; 2% of the fourth $1,000,000 and 1% of any
remuneration received in excess of $4,000,000, whether
received in cash or in kind. The Company's obligation to
pay compensation pursuant to this paragraph (e) shall apply
to any transaction resulting from MPR's efforts or
introductions which is consummated during the term of this
Agreement or within twelve (12) months following the
termination of this Agreement. The Company shall not be
obligated to compensate MPR in accordance with this
paragraph (e) which is not consummated because of a default
by the other party thereto prior to consummation, the
failure of any conditions precedent to consummation which
conditions are not within the Company's control, the failure
of the Board of Directors of the Company to approve such
transaction or unsatisfactory results of a due diligence
investigation by the Company. MPR shall not be entitled to
compensation with respect to introductions to individuals,
companies or other entities with whom the Company has had
previous contacts or discussions.
(f) MPR will be reimbursed for all documented
reasonable out-of-pocket expenses incurred in the
performance of its responsibilities outlined above. All
expenses over $500 will be pre-approved by the Company.
5. Term. The term of this Agreement shall be for a
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period beginning on the date hereof and ending two (2) years
thereafter. Notwithstanding the foregoing, the Company or MPR
may terminate this Agreement at any time after one year upon
thirty (30) days prior notice. The Company shall have issued all
of the stock and MPR Warrants pursuant to paragraph 3 of this
agreement prior to any termination by it.
6. Relationship of the Parties. Nothing in this
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Agreement shall be construed as establishing a partnership or
joint venture between the parties hereto. The Company specifi-
cally understands that MPR is acting hereunder as an independent
contractor. MPR's services hereunder are not exclusive and MPR
at all times shall be free to perform the same or similar
services for others which shall not be deemed a conflict of
interest nor a breach of this Agreement, however MPR agrees not
to perform the same or similar services for any company which is
in direct competition with the Company.
7. Indemnification.
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(a) The Company shall indemnify MPR and its affiliates
and their respective directors, officers, employees, agents and
controlling persons (MPR and each such other person and entity
being an "Indemnified Party" for purposes of this Section) from
and against any and all losses, claims, damages and liabilities,
jointly or severally, to which such Indemnified Party may become
subject under any applicable federal or state law, or otherwise
related to or arising out of any transaction contemplated by this
Agreement and the performance by MPR of the services contemplated
by this Agreement, and shall reimburse each Indemnified Party for
all reasonable expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the
investigation of, preparation for or defense of, any pending or
threatened claim or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto provided
that the Company shall not be liable for any of the foregoing to
the extent they arise from the gross negligence or willful
misconduct of the Indemnified Party and further provided that
such Indemnified Party agrees to refund such reimbursed expenses
if and to the extent it is finally judicially determined that
such Indemnified Party is not entitled to indemnification. In
the event that the foregoing indemnity is unavailable or
insufficient to hold any Indemnified Party harmless, then the
Company shall contribute to amounts paid or payable by such
Indemnified Party in respect of such losses, claims, damages and
liabilities in such proportion as approximately reflects the
relative benefits received by, in fault of, the Company and such
Indemnified Party in connection with the matters as to which such
losses, claims, damages and liabilities relate and other
equitable considerations, provided however that nothing in this
sentence shall be construed as altering or limiting in any way
the effect of the proviso contained in the immediately preceding
sentence.
(b) MPR shall indemnify the Company and its affiliates
and their respective directors, officers, employees, agents and
controlling persons (the Company and each such other person and
entity being an "Indemnified Party" for purposes of this Section)
from and against any and all losses, claims, damages and
liabilities, jointly or severally, to which such Indemnified
Party may become subject under any applicable federal or state
law, or otherwise related to or arising out of any transaction
contemplated by this Agreement and the performance by the Company
of its obligations contemplated by this Agreement, and shall
reimburse each Indemnified Party for all reasonable expenses
(including reasonable counsel fees and expenses) as they are
incurred in connection with the investigation, preparation for or
defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified
Party is a party thereto provided that MPR shall not be liable
for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Indemnified Party and
further provided that such Indemnified Party agrees to refund
such reimbursed expenses if and to the extent it is finally
judicially determined that such Indemnified Party is not entitled
to indemnification. In the event that the foregoing indemnity is
unavailable or insufficient to hold any Indemnified Party
harmless, then MPR shall contribute to amounts paid or payable by
such Indemnified Party in respect of such losses, claims, damages
and liabilities in such proportion as approximately reflects the
relative benefits received by, in fault of, MPR and such
Indemnified Party in connection with the matters as to which such
losses, claims, damages and liabilities relate and other
equitable considerations, provided however that nothing in this
sentence shall be construed as altering or limiting in any way
the effect of the proviso contained in the immediately preceding
sentence.
8. Disclosure. Any financial advice rendered by MPR
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pursuant to this Agreement may not be disclosed publicly in any
manner without the prior written approval of MPR. All non-public
information given to MPR by the Company will be treated by MPR as
confidential information, and MPR agrees not to make use of such
information other than in connection with its performance of this
Agreement, provided, however, that any such information may be
disclosed if required by any court or governmental or regulatory
authority, board or agency. "Non-public information" shall not
include any information which (i) is or becomes generally
available to the public other than as a result of a disclosure by
MPR; (ii) was available to MPR prior to its disclosure to MPR by
the Company, provided that such information is not known by MPR
to be subject to another confidentiality agreement with another
party; or (iii) becomes available to MPR on a non-confidential
basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the
Company.
9. Notice. Any or all notices, designations,
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consents, offers, acceptances or other communications provided
for herein shall be given in writing and delivered in person or
by registered or certified mail, return receipt requested,
directed to the address shown below unless notice of a change of
address is furnished:
If to MPR:
Xxxxxx Xxxxxxx Xxxxxxx, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
With a copy to:
Xxxx X. Xxxxxx, Esq.
Two Grand Central Tower
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Touchstone Applied Sciences Associates, Inc.
Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, President
With a copy to:
Xxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
10. Waiver. Unless agreed to in writing, the failure
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of either party at any time to require performance by the other
of any provisions hereunder shall not affect its rights there-
after to enforce the same, nor shall a waiver by either party of
any breach of any provision hereof, be taken or held in by a
waiver of any other proceeding or succeeding breach of any term
or provision of this Agreement. No extension of time for the
performance of any obligation or act shall be deemed to be in
extension of time for the performance of other obligations or
acts hereunder.
11. Complete Agreement. This Agreement contains the
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entire Agreement between the parties with respect to the contents
hereof and supersedes all prior agreements and understandings
between the parties with respect to such matters, whether written
or oral. Neither this Agreement, nor any term or provision
hereof may be changed, waived, discharged or amended in any
manner other than by an instrument in writing, signed by the
party against which the enforcement of the change, waiver,
discharge or amendment is sought.
12. Counterparts. This Agreement may be executed in
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two or more counterparts, each of which shall be an original but
all of which shall constitute but one agreement.
13. Binding Effect/Assignment. This Agreement shall
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be binding upon the parties hereto, their heirs, legal
representatives, successors, and assigns and shall not be assign-
able by either party, except upon prior written consent by both
parties to this Agreement.
14. Headings. The headings of the sections are for
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convenience only and shall not control or affect the meaning or
construction or limit the scope or intent of any of the provi-
sions of this Agreement.
15. Survival. Any termination of this Agreement shall
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not, however, affect the on-going provisions of this Agreement
which shall survive such termination in accordance with their
terms.
16. Severability. Whenever possible, each provision
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of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law. But if any provision
of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule, such invalidity,
illegality or unenforceability will not affect any other
provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been con-
tained herein. If any court determines that any provision of
Section 4 or 5 hereof is unenforceable because of the duration or
scope of such provision, such courts shall have the power to
reduce the scope for the duration of such provision, as the case
may be, and, in its reduced form, such provision shall then be
enforceable.
17. Choice of Law. This Agreement shall be governed
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by, construed, interpreted and the rights of the parties
determined in accordance with the laws of the State of New York,
without reference to the principles of conflicts of law.
IN WITNESS WHEREOF, the parties executed this Agreement
as of the effective date of this Agreement.
TOUCHSTONE APPLIED SCIENCE
ASSOCIATES, INC.
By /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
XXXXXX XXXXXXX XXXXXXX, INC.
By /s/ XXXXXXX XXXXXXXXX
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Xxxxxxx Xxxxxxxxx, President
