FINANCIAL ADVISORY/INVESTMENT BANKING AGREEMENT
This AGREEMENT made as of this 26th day of April 2000, by and between METHOD
PRODUCTS CORP., a Florida corporation, (the "Company"), with its principal place
of business at 0000 Xxxxxx Xxxx, Xxxxx X-0, Xxxxxxx Xxxxx, Xxxxxxx 00000, and
Xxxxxxxxx Group Inc. a Florida corporation (XXXXXXXXX") having an office for the
transaction of business located at 0000 Xxxxxxxxx Xxxx., Xxxxx 000 Xxxx, Xxxx
Xxxxx, Xxxxxxx 00000.
RECITALS:
WHEREAS, The Company desires to obtain the investment banking, advisory services
and corporate finance expertise of XXXXXXXXX.
WHEREAS, XXXXXXXXX desires to provide the investment banking, advisory services
and corporate finance expertise required by the Company, and advise the company
on how to become a publicly trading corporation.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
parties hereto hereby agree as follows:
1. During the term of this Agreement, XXXXXXXXX is hereby retained by the
Company to provide investment banking, advisory services to the
Company. In addition to said services, XXXXXXXXX, will assist the
company with corporate finance matters, including, without limitation,
advice regarding capital structure, capital offerings, joint
offerings, joint ventures, financial strategies, mergers, acquisitions
and divestitures. XXXXXXXXX shall provide such investment banking and
advisory services as are reasonably requested by the Company during
the term of this Agreement. Unless otherwise agreed to by XXXXXXXXX,
all services hereunder shall be performed by XXXXXXXXX, in its sole
discretion, at its principal place of business or other offices.
Notwithstanding anything contained herein to the contrary, the
services to be performed by XXXXXXXXX hereunder may be performed by
any employee of, or consultant to XXXXXXXXX, in its sole discretion.
2. The term of this agreement shall be for three years from May 1, 2000
through April 30, 2003. The Company agrees that it will not enter into
similar agreements during the term of this Agreement without the prior
written consent of XXXXXXXXX.
3. In consideration of the services to be rendered and performed by
XXXXXXXXX during the term of this Contract, the Company will pay
XXXXXXXXX a fee of $10,000 or 20,000 shares of the Company's common
stock, per month during the term of this Contract. In consideration
for the performance of services hereunder, the Company hereby agrees
to pay to XXXXXXXXX a retainer in the form of 60,000 shares of the
Company's common stock, upon execution of this agreement. These shares
shall be registered with the next or first registration statement
filed by the Company.
In consideration for the performance of services hereunder, the
Company hereby agrees to pay to XXXXXXXXX such success fees as
outlined below plus XXXXXXXXX shall also be reimbursed for all
out-of-pocket expenses incurred in the performance of its duties,
including but not limited to, attorney's and other professional fees
and expenses, travel, meals, lodging, long distance telephone,
photocopies, printing, couriers, facsimiles and other expenses
incurred by XXXXXXXXX and by any professional from time to time in
connection with any of the activities mentioned herein. In addition to
the foregoing, the Company shall bear all the Company's approved fees,
disbursements, printing and mailing, Internet listing services and
expenses, without limitation, the Company's legal and accounting fees
and disbursements and the cost of background checks on all key
management personal not to exceed $2,500 that XXXXXXXXX deems
necessary.
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The Company agrees to pay such approved fees that are reasonable and
customary and expenses after closing, and to reimburse XXXXXXXXX
within 10 days upon presentation of monthly invoice. XXXXXXXXX agrees
that no single expense item from time to time sought to be reimbursed
shall exceed $2,500 without the prior approval or request of the
Company.
As compensation for XXXXXXXXX'x services hereunder, the Company agrees
to pay XXXXXXXXX a 10% placement fee plus a 3% non-accountable expense
allowance on all sales made by XXXXXXXXX or the officers, directors or
employees of the Company in a proposed Private Placement for the
Company on terms to be determined. In addition, the Company shall
grant the Placement Agent a five-year option to purchase an addition
10% of the Stock sold in the placement, under the same terms as the
Offering.
In the event the Company effectuates a merger, acquisition, joint
venture, or other similar business relationship or business
transaction ("Transaction") for the Company subsequent to the date
hereof and or prior to two years from the date of termination of this
Agreement, irrespective of any reason for such termination, and such
Transaction is effectuated as a result or consequence of any
introduction made directly or indirectly by XXXXXXXXX through any
third party introduced by XXXXXXXXX to the Company, or by a person
whose introduction to the Company can be traced back to XXXXXXXXX,
during the term of this Agreement, or which XXXXXXXXX was requested by
The Company to provide advice, then the Company hereby agrees to pay
XXXXXXXXX the following consideration, which payment shall be due and
payable on the date of any such closing with respect thereto:
10% of the first $2,000,000 of total consideration paid in the
Transaction, plus
8% of the next $2,000,000 of total consideration paid in the
Transaction, plus
6% of the next $2,000,000 of total consideration paid in the
Transaction, plus
4% of the next $2,000,000 of total consideration paid in the
Transaction, plus
2% of the balance of total consideration paid in the Transaction.
For purposes of this Agreement, "consideration" shall mean the
aggregate consideration paid by the acquirer or the Company in
connection with the merger, joint venture, acquisition or divestiture,
described herein and shall include all cash, the principal of any
notes executed as part of the purchase price for such Transaction, the
value as determined in good faith by the parties hereto, of any
securities paid or exchanged in connection with the merger, joint
venture, acquisition or divestiture and the amounts of any long-term
liabilities, capital leases, or bank financing, royalty or licensing
fees arrangements of the acquired entity and which are paid or assumed
by the acquiring entity as part of the purchase price for the
acquisition.
As an inducement to XXXXXXXXX or its assigns to enter into this
Agreement, the Company will issue to XXXXXXXXX, Options to purchase a
total of 9.9% of the outstanding shares as of April 30, 2002, of the
Company's common stock, ("Common"), exercisable until April 30, 2005,
or such later date to which the term of the per share Option may be
extended pursuant to the terms hereof, $.75, ("Exercise Price"). By
execution of this Agreement the Company agrees to execute the Option
Agreement on XXXXXXXXX'x approved form. For purposes of this Company
Common Stock Option, in the event the Company forms a subsidiary, or
affiliate which would be the successor to all or a majority of the
Company's main core business(es), or sell the company, XXXXXXXXX or
its assigns shall have the right to exchange its Common Options of the
Company for an identical equity percentage (9.9%) of the issued and
outstanding Common Stock of such subsidiary, affiliated or parent
company, as of the date of the initial issuance of Common Stock.
The number of shares subject to the Common Stock Option will be
adjusted to reflect any stock splits, stock dividends,
recapitalization, etc. affecting the Company's Common Stock.
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4. The Company hereby grants and warrants that any and all information
supplied hereunder to XXXXXXXXX in connection with any and all
services to be performed hereunder by XXXXXXXXX for and on behalf of
the Company shall be true in all material respects, as of the date of
such dissemination and shall not fail to state a material fact
necessary to make any of such information not misleading. The Company
hereby acknowledges that the ability of XXXXXXXXX to adequately
provide investment banking and consulting services hereunder and/or to
initiate and/or effectuate introductions on behalf of the Company with
respect to potential acquisitions is dependent upon the prompt
dissemination of accurate, correct and complete information to
XXXXXXXXX. In addition, and notwithstanding anything contained herein
to the contrary, nothing hereunder shall obligate XXXXXXXXX to make
any minimum number of introductions, or to initiate any merger or
acquisitions involving or relating to the Company. The Company further
represents and warrants hereunder that this Agreement and the
transactions contemplated hereunder, including the issuance of the
Common Stock Options hereunder, have been duly and validly authorized
by all requisite corporate action; that the Company has the full
right, power and capacity to execute, deliver and perform its
obligations hereunder; and that this Agreement, upon execution and
delivery of the same by the Company, will represent the valid and
binding obligation of the Company enforceable in accordance with its
terms. The representations and warranties set forth herein shall
survive the termination of this Agreement.
5. The Company hereby agrees to indemnify, defend and hold harmless
XXXXXXXXX, its directors, officers, principals, employees,
consultants, affiliates and shareholders, and their successors and
assigns from and against any and all claims, damages, losses,
liability, deficiencies, actions, suits, proceedings, costs or legal
expenses (collectively the "Losses") arising out of or resulting from:
(i) any breach of a representation or warranty by the Company
contained in the Agreement; or (ii) any activities or services
provided hereunder by XXXXXXXXX at the request of the Company (which
request is in writing in connection with the negotiation of any
merger, acquisition, joint venture or capital financing), unless such
Losses were the result of the gross negligence, intentional misconduct
or gross misconduct of XXXXXXXXX.
6. If XXXXXXXXX receives written notice of the commencement of any legal
action, suit or proceeding with respect to which the Company is or may
be obligated to provide indemnification pursuant to Section 5 above,
XXXXXXXXX shall, within thirty (30) days of the receipt of such
written notice, give the Company written notice thereof (a "Claim
Notice"). Failure to give such Claim Notice within such thirty (30)
day period shall not constitute a waiver by XXXXXXXXX of its right to
indemnity hereunder with respect to such action, suite or proceeding;
provided, however, if the Company is materially prejudiced as a result
of such failure to give Claim Notice, such failure shall constitute a
waiver.
Upon receipt by the Company of a Claim Notice from XXXXXXXXX with
respect to any claim for indemnification which is based upon a claim
made by a third party ("Third Party Claim"), XXXXXXXXX may assume the
defense of the Third Party claim with counsel of its own choosing. The
fees and expenses of such counsel shall be paid as described below.
The Company shall cooperate in the defense of the Third Party Claim
and shall furnish such records, information and testimony and attend
all such conferences, discovery, proceedings, hearings, trials and
appeals as may be reasonably required in connection therewith.
XXXXXXXXX shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the
expense of XXXXXXXXX unless the Company shall not have promptly
employed counsel to assume the defense of the Third Party Claim, in
which event such fees and expenses shall be borne solely by the
Company. The Company shall not satisfy or settle any Third Party Claim
for which indemnification has been sought and is available hereunder,
without the prior written consent of XXXXXXXXX, which consent shall
not be unreasonably withheld.
If the Company shall fail with reasonably promptness to defend such
Third Party Claim, XXXXXXXXX may defend the Third Party Claim at the
expense of the Company and the Company shall pay to XXXXXXXXX the
amount of any such loss within ten (10) days after written demand
thereof provided
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XXXXXXXXX shall not settle any Third Party Claim without the prior
written consent of the Company, which consent shall not be
unreasonably withheld. The indemnification provisions hereunder shall
survive the termination of this Agreement.
7. No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is evidenced by a written
instrument, executed by the party against which such modification,
waiver, amendment, discharge, or change is sought.
8. All notices, demands or other communications given hereunder shall be
in writing and shall be deemed to have been duly given when delivered
in person or transmitted by facsimile transmission or the fifth
calendar day after being mailed by registered or certified mail,
return receipt requested, postage prepaid, to the addresses herein
above first mentioned or to such other address as any party hereto
shall designate to the other for such purpose manner herein set forth.
9. This Agreement contains all of the understandings and agreements of
the parties with respect to the subject matter discussed herein. All
prior agreements, whether written or oral, are merged herein and shall
be of no force or effect.
10. The invalidity, illegality or unenforceability of any provision or
provisions of this Agreement will not affect any other provision of
this Agreement, which will remain in full force and effect, nor will
the invalidity, illegality or enforceability of a portion of any
provision of this Agreement affect the balance of such provision. In
the event that any or more of the provisions contained in this
Agreement or any portion thereof shall for any reason be held to be
invalid, illegal or unenforceable in any respect this Agreement shall
be reformed, construed and enforced as if such invalid, illegal or
unenforceable provision had never been contained herein.
11. This agreement shall be construed in accordance with the laws of the
State of Florida, without application of the principles of conflicts
of laws. If it becomes necessary for any party to institute legal
action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees, expenses
and costs. Any action or proceeding with respect to this Agreement
shall through binding arbitration of Palm Beach County in the State of
Florida. The parties hereto hereby accept this exclusive jurisdiction
for the purpose of any such arbitration proceeding, as follows:
(a) All disputes and differences arising in connection with or
relating to the provisions of this Agreement, including what
constitutes a dispute or difference, shall be settled and finally
determined by arbitration unless agreement in writing has been
reached between the parties within thirty (30) days after either
party shall have given written notice to the other party of the
existence of a dispute or difference which it desires to have
arbitrated. Such notice shall state the point or points in
dispute.
(b) Three (3) arbitrators shall conduct arbitration in accordance
with the rules of the American Arbitration Association, one or
which shall be selected by XXXXXXXXX, one by The Company and a
Chairman of Arbitration Court selected by the two arbitrators so
selected. The applicable law shall be as provided above. Each
party shall notify the other party of the arbitrator selected by
it within thirty (30) days of the giving of written notice
referred to above. In the event that the two arbitrators selected
by the parties are unable to reach agreement as to the third
arbitrator, the American Arbitration Association shall select the
third arbitrator. Arbitration shall be held in the jurisdiction
stated above.
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Each party shall be given the opportunity to present to the
arbitrators its evidence, witnesses and arguments, and the right
to be represented by counsel, of its selection when the other
party presents its evidence, witnesses and arguments. In the
event one of the parties shall fail, after reasonable advance
notice, to appear and participate in the arbitration proceedings
as normally interpreted by the above-mentioned rules, the
arbitrators shall be entitled to make their decision and award on
the basis of evidence, witnesses and arguments presented by the
party appearing.
(c) The decision and award of the arbitrators shall be in writing and
shall be final and binding upon the parties hereto. Judgment upon
the award rendered may be entered in any court having
jurisdiction thereof, or application may be made to such court
for a judicial acceptance of the award and an order of
enforcement, as the case may be. The expenses of arbitration
shall be borne in accordance with the determination of the
arbitrators with respect thereto. Pending decision by the
arbitrators with respect to the dispute or difference undergoing
arbitration, all other obligations of the parties hereto shall
continue as stipulated herein, and all monies not directly
involved in such dispute or difference shall be paid when due.
THE PARTNERS HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION
WITH ANY DISPUTE ARISING OUT OF THIS AGREEMENT.
12. The terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties, and their respective successors
and assigns.
13. This Agreement may be executed in any number of counterparts,
including facsimile signatures, which shall be deemed as original
signatures. All executed counterparts shall constitute one Agreement,
notwithstanding that all signatories are not signatories to the
original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
METHOD PRODUCTS CORPORATION XXXXXXXXX GROUP, INC.
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------- -------------------------------
Xxxx Xxxxxxxxx, President, and Xxxxxxxx X. Xxxxxxxx, President, and
CEO CEO
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