Xxxxxxxx and Company ("PASCO") has been retained by Advanced Materials
Group, Inc. ("AMG" or the "Company") to provide various corporate finance
services to the Company. These services will include the identification of
and successful acquisition of target companies ("Target") meeting the
criteria of AMG whether introduced by PASCO or other sources during the
term of this engagement. Services may also include identifying financing
for growth or acquisition purposes.
This Agreement shall become binding upon the execution hereof by PASCO and
AMG. The term of this Agreement shall extend for a minimum of 24 months.
The contract shall be renewed with the mutual consent of AMG and PASCO for
twelve month periods.
I. SERVICES
PASCO agrees to coordinate and initiate all discussions with targets and as
well contact all appropriate transaction sources that might be able to
assist in finding an appropriate Target.
II. COMPENSATION FOR SERVICES
In consideration for the services rendered, AMG shall pay PASCO a monthly
retainer due on the first of each month. The retainer shall be $10,000 for
the first month and for each of the next 23 months, a monthly retainer of
$4,000.
AMG agrees to reimburse PASCO monthly for all reasonable out-of-pocket
expenses incurred in carrying out the terms of this Agreement, including
travel, lodging, meals, telephone, facsimile, courier, printing charges,
data acquisition and mailing charges. These out-of-pocket expenses will be
payable upon invoicing by PASCO on a monthly basis.
In addition to the retainer, PASCO will receive a 10 year option to purchase
50,000 AMG shares at a market price at the close of today. In addition, AMG
shall revise the previous option agreement earned for past acquisition
services to extend it for 10 years from the date of signing. The option price
shall be set as of the close of business 3/31/97.
A. If an acquisition of a Target is completed during the course of this
agreement or within one (1) year following the termination of this Agreement in
which AMG acquires the stock or assets of the Target, PASCO shall be compensated
based on the following schedule:
PASCO will earn options to purchase the following number of shares of AMG stock
at the price of the day the transaction closes.
1. Options in the amount of 75,000 shares shall be earned if total
consideration for the Target is $10.0 million or less,
2. Additional options will be issued at a pro-rata rate of 10,000 shares
for each additional $1.0 million of purchase price above $10.0
million.
For the purposes of this agreement consideration for stock shall be defined as
the cash, debt instruments and stock transferred to the shareholders in exchange
for their ownership in Target plus any long term debt assumed. Consideration for
assets shall be defined as cash, debt and stock instruments transferred for
selected assets and liabilities. In the event some portion of the consideration
is contingent payable based on future events, that portion of the fee shall be
payable at that time.
B. In the event of an acquisition PASCO shall have the right of first refusal as
placement agent for subordinated debt financing (non-bank) if appropriate.
III. DISCLOSURE
All non-public information provided by the AMG to Target(s) will be considered
as confidential information and shall be maintained as such by PASCO, except as
required by law.
IV. ENTIRE AGREEMENT, ETC.
This Agreement sets forth the entire understanding of the parties relating to
the subject matter hereof and supersedes and cancels any prior communications,
understandings, and agreements between the parties. This Agreement cannot be
modified or changed, nor can any of its provisions be waived, except by written
agreement signed by all parties hereto. Attached to this agreement is an
indemnification agreement that will survive this agreement.
V. ACCEPTANCE
Please confirm that the foregoing is in accordance with your understanding by
signing upon behalf of the Company and returning an executed copy of this
Agreement.
Sincerely, ACCEPTED AND AGREED TO:
ADVANCED MATERIALS GROUP, INC.
XXXXXXXX and COMPANY
By: /s/ Xxxxx Xxxxx
/s/ N. Price Xxxxxxxx -------------------------------
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N. Price Xxxxxxxx
Managing Director Title: PRESIDENT/CEO
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Date: APRIL 28, 1997
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