ADVISORY AND INVESTMENT BANKING AGREEMENT
-----------------------------------------
This Agreement is made and entered into as of the 27th day of January, 1999
by and between May, Xxxxx Group Inc., a New York corporation ("May Xxxxx"), and
includes and not limited to MSU (UK) Ltd. and any and all affiliates ("the
Company") as defined under Securities Act of 1933.
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Purpose: The Company hereby engages May Xxxxx for the term specified in
Paragraph 2 hereof to render consulting advice to the Company as an investment
banker relating to financial and similar matters upon the terms and conditions
set forth herein.
2. Term: Except as otherwise specified in pargraph 4 hereof, this Agreement
shall be effective from January 1, 1999 to December 31, 2000 (two years). There
shall be an initial 6-month probationary period ("Initial Term") during which
either party could terminate if (i) relationship found to be unsatisfactory,
(ii) insolvency of either party, or (iii) if either party is acquired.
3. Duties of May Xxxxx: During the term of this Agreement, May Xxxxx shall
provide the Company with such regular and customary financial consulting advice
as is reasonably requested by the Company, provided the Consultant shall not be
required to undertake duties not reasonably within the scope of this Agreement.
It is understood and acknowledged by the parties that the value of May Xxxxx'x
advice is not readily quantifiable, and that although May Xxxxx shall be
obligated to render the advice contemplated by this Agreement upon the
reasonable request of the Company, in good faith, May Xxxxx shall not be
obligated to spend any specific amount of time in so doing. May Xxxxx'x duties
may include but will not necessarily be limited to, providing recommendations
concerning the following matters:
a. Rendering advice with regard to any of the following corporate
finance matters:
(i) changes in the capitalization of the Company;
(ii) changes in the Company's corporate structure;
(iii) redistribution of shareholdings of the Company's stock;
(iv) offerings of securities in public and private transactions;
(v) alternative uses of corporate assets;
(vi) structure and use of debt;
(vii) sales of stock by insiders pursuant to Rule 144 or otherwise;
(vii) counsel management with respect to listing on a National
Exchange; and
(ix) provide strategic plan for the company over the next two
years.
b. In addition to the foregoing, May Xxxxx agrees to furnish advice to
the Company if requested in connection with (i) the acquisition of and/or merger
with other companies, the sale of the Company itself, or any of its assets,
subsidiaries or affiliates, or similar type of transaction (hereinafter referred
to as a "Transaction"), and (ii) financings from financial
institutions, including but not limited to lines of credit, performance bonds,
letters of credit, loans or other financings (hereinafter referred to as a "Bank
Financing").
c. May Xxxxx shall also render such other financial consulting and/or
investment banking services as may from time to time be agreed upon by May Xxxxx
and the Company.
4. Compensation: The Company shall pay May Xxxxx the following
compensation:
Upon execution of this Agreement, (and in addition to the expenses provided
for in Paragraph 5 hereof), the Company will reserve for May Xxxxx 400,000
warrants exercisable for a period of five (5) years commencing one year from the
date hereof at an exercise price of $1.50 per share; the Company will issue such
warrants to May Xxxxx upon the following basis: 112,500 upon execution of
Agreement, 37,500 at the conclusion of the Initial Term and remaining issued on
a quarterly basis over the remainder of the Term accruing monthly.
5. Expenses of May Xxxxx: In addition to the fees payable hereunder, and
regardless of whether any transaction set forth in Paragraph 4 hereof is
proposed or consummated, the Company shall reimburse May Xxxxx for all fees and
disbursements of May Xxxxx' counsel and May Xxxxx' travel and out-of-pocket
expenses incurred in connection with the Services performed by May Xxxxx
pursuant to this Agreement, including without limitation, hotels, food and
associated expenses and long-distance telephone calls.
6. Liability of May Xxxxx: The Company acknowledges that all opinions and
advice (written or oral) given by May Xxxxx to the Company in connection with
May Xxxxx'x engagement are intended solely for the benefit and use of the
Company in considering the transaction to which they relate, and the Company
agrees that no person or entity other than the Company shall be entitled to make
use of or rely upon the advice of May Xxxxx to be given hereunder, and no such
opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for any
purpose, nor may the company make any public references to May Xxxxx, or use May
Xxxxx'x name in any annual reports or any other reports or releases of the
Company without May Xxxxx'x prior written consent.
7. May Xxxxx'x Services to Others: The Company acknowledges that May Xxxxx
or its affiliates are in the business of providing financial services and
consulting advice to others. Nothing herein contained shall be construed to
limit or restrict May Xxxxx in conducting such business with respect to others,
or in rendering such advice to others.
8. Company Information:
a. The Company recognizes and confirms that, in advising the Company and
in fulfilling its engagement hereunder, May Xxxxx will use and rely on data,
material and other information furnished to May Xxxxx by the Company. The
company acknowledges and agrees that in performing its services under this
engagement, May Xxxxx may rely upon the data, material and other information
supplied by the Company without independently verifying the accuracy,
completeness or veracity of same.
b. Except as contemplated by the terms hereof or as required by
applicable law, May Xxxxx shall keep confidential all material non-public
information provided to it by
2
Company, and shall not disclose such information to any third party, other than
such of its employees and advisors as May Xxxxx determines to have a need to
know.
9. Indemnification:
a. The Company shall indemnify and hold harmless against any and all
liabilities, claims, lawsuits, including any and all awards and/or judgments to
which it may become subject under the Securities Act of 1933, as amended (the
"1933 Act"), the Securities Exchange Act of 1934, as amended (the "Act") or any
other federal or state statute, at common law or otherwise, insofar as said
liabilities, claims and lawsuits (including awards and/or judgments) arise out
of or are in connection with the services rendered by May Xxxxx or any
transactions in connection with this Agreement, except for any liabilities,
claims and lawsuits (including awards and/or judgments), arising out of acts or
omissions of May Xxxxx. In addition, the Company shall also indemnify and hold
May Xxxxx harmless against any and all costs and expenses, including reasonable
counsel fees, incurred or relating to the foregoing.
May Xxxxx shall give the Company prompt notice of any such liability, claim
or lawsuit which May Xxxxx contends is the subject matter of the Company's
indemnification and the Company thereupon shall be granted the right to take any
and all necessary and proper action, at its sole cost and expense, with respect
to such liability, claim and lawsuit, including the right to settle, compromise
and dispose of such liability, claim or lawsuit, excepting therefrom any and all
proceedings or hearing before any regulatory bodies and/or authorities.
May Xxxxx shall indemnify and hold the Company harmless against any and all
liabilities, claims and lawsuits, including any and all awards and/or judgments
to which it may become subject under the 1933 Act, the Act or any other federal
or state statute, at common law or otherwise, insofar as said liabilities,
claims and lawsuits (including awards and/or judgments) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
required to be stated or necessary to make the statement therein, not
misleading, which statement or omission was made in reliance upon information
furnished in writing to the Company by or on behalf of May Xxxxx for inclusion
in any registration statement or prospectus or any amendment or supplement
thereto in connection with any transaction to which this Agreement applies. In
addition, May Xxxxx shall also indemnify and hold the Company harmless against
any and all costs and expenses, including reasonable counsel fees, incurred or
relating to the foregoing.
The Company shall give to May Xxxxx prompt notice of any such liability,
claim or lawsuit which the Company contends is the subject matter of May
Xxxxx'x indemnification and May Xxxxx thereupon shall be granted the right to
take any and all necessary and proper action, at its sole cost and expense, with
respect to such liability, claim and lawsuit, including the right to settle,
compromise or dispose of such liability, claim or lawsuit, excepting therefrom
any and all proceedings or hearings before any regulatory bodies and/or
authorities.
b. In order to provide for just and equitable contribution under the act
in any case in which (i) any person entitled to indemnification under this
Section 9 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry or a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 10 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
such person in circumstances for which indemnification is provided under this
Section 10, then, and in each such case, the
3
Company and May Xxxxx shall contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (after any contribution from others)
in such proportion taking into consideration the relative benefits received by
each party from the offering covered by the prospectus with respect to any
transactions in connection with this Agreement (taking into account the position
of the proceeds of the offering realized by each), the parties' relative
knowledge and access to information concerning the matter with respect to which
the claim was assessed, the opportunity to correct and prevent any statement or
omission and other equitable considerations appropriate under the circumstances;
provided, however, that no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Within fifteen (15) days after receipt by any party to this Agreement
(or its representative) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof is
to be made against another party (the "Contributing Party"), notify the
Contributing Party of the commencement thereof, but the omission so to notify
the Contributing Party will not relieve it from any liability which it may have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party or his or its representative of the commencement thereof
within the aforesaid fifteen (15) days, the Contributing Party will be entitled
to participate therein with the notifying party and any other Contributing Party
similarly notified. Any such contributing Party shall not be liable to any
party seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of the Contributing Party. The indemnification provisions contained in
this Section 10 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
10. May Xxxxx an Independent Contractor: May Xxxxx shall perform its
services hereunder as an independent contractor and not as an employee of the
Company or an affiliate thereof. It is expressly understood and agreed to by the
parties hereto that May Xxxxx shall have no authority to act for, represent or
bind the Company or any affiliate thereof in any manner, except as may be agreed
to expressly by the Company in writing from time to time.
11. Miscellaneous
(1) This Agreement between the Company and May Xxxxx constitutes
the entire agreement and understanding of the parties hereto, and supersedes
any and all previous agreements and understandings, whether oral or written,
between the parties with respect to the matters set forth herein.
(2) Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if hand-delivered
or sent (i) postage prepaid by registered mail, return receipt requested, or
(ii) by facsimile, to the respective parties as set forth below, or to such
other address as either party may notify the other in writing.
If to the Company, to: MSU (UK) Ltd.
Elder House
000-000 Xxxxx Xxxx
Xxxxxxx Xxxxxx Xxxxxx XX 9 ILR
England
with a copy to: (attorney)
4
If to May Xxxxx, to: May, Xxxxx Group Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
with a copy to: Xxx Xxxxxxxxx, Esq.
Xxxxxxx, Savage, Kaplowitz, Xxxxxxxxxx & Xxxxxx
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
(3) This Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and their respective successors, legal
representatives and assigns.
(4) This Agreement may be executed in any number of counterparts,
each of which together shall constitute one and the same original document.
(5) No provision of this Agreement may be amended, modified or
waived, except in a writing signed by all of the parties hereto.
(6) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, without giving effect to conflict of law
principles. The parties hereby agree that any dispute which may arise between
them arising out of or in connection with this Agreement shall be adjudicated
before a court located in New York City, and they hereby submit to the exclusive
jurisdiction of the courts of the State of New York located in New York, New
York and of the federal courts in the Southern District of New York with respect
to any action or legal proceeding commenced by any party, and irrevocably waive
any objection they now or hereafter may have respecting the venue of any such
action or proceeding brought in such a court or respecting the fact that such
court is an inconvenient forum, relating to or arising out of this Agreement,
and consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth in Paragraph 11(b) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
MAY, XXXXX GROUP INC.
By: /s/ Xxxx May
--------------------------------------------
Xxxx May, Chairman
MSU (UK) Ltd.
Elder House
000-000 Xxxxx Xxxx
Xxxxxxx Xxxxxx Xxxxxx XX 9 ILR
England
By:____________________________________________
5
