Exhibit 10.26
February 16, 1998
Xx. Xxxxx Xxxxxx
President and CEO
Navidec, Inc.
00 Xxxxxxxxx Xxxxx, Xxxxxxxx X, Xxxxx 000 Xxxxxx, XX 00000
Re: Engagement Agreement
Dear Xx. Xxxxxx,
This letter (the "Engagement Letter" or "Agreement") will confirm the engagement
of Xxxxxx Xxxxxxx & Associates, Inc. ("JCA") by Navidec, Inc. ("the Company") to
render financial and investment banking services on an exclusive basis as
described below.
In connection with this engagement, the Company will furnish to JCA such
information and data (the "Information") relating to the Company as JCA
reasonably requests and will provide JCA with reasonable access to the Company's
officers, directors, employees, counsel and independent accountants. JCA may
rely upon the Information without independently verifying it and does not assume
responsibility for its accuracy or completeness. JCA will not make an
independent appraisal of the assets of the Company but will familiarize itself
with the business operations, financial condition and prospects of the Company,
and will review such corporate documents involving the Company as JCA in its
sole discretion deems necessary.
JCA will provide the following services under this investment banking agreement:
JCA will work with Navidec, Inc,, in developing a long term financial strategy
which will include private placements, future public offerings and/or strategic
partnerships. In particular, JCA will act as the Company's Placement Agent for a
$ 1,500,000 private placement financing during the term of this Agreement; the
terms of such financing shall be mutually agreeable to both parties. JCA shall
also have a first right of refusal to represent the Company in any public
offerings, private placements, or strategic partnerships for the duration of
this engagement and 12 months after it is terminated; any such transactions will
be governed by a separate engagement or letter of intent.
In consideration of JCA's services, the Company agrees to pay JCA a consulting
fee of 250,000 warrants exercisable at $3.50. The Company also agrees to
reimburse JCA for any reasonable out of pocket expenses incurred by JCA in
connection with services under this engagement; provided all such expenses are
approved in advance by the Company. JCA shall also be paid a Xxxxxx formula fee
in the event the Company is acquired, merged or sells substantially all of its
assets or a controlling block of stock.
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1. Liability of JCA. In furnishing the company with advice and other
services as herein provided, neither JCA nor any officer, director or agent
thereof shall be liable to the company or its creditors for errors of judgment
or anything except willful malfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations and
duties under the terms of this agreement.
It is further understood and agreed that JCA may rely upon information furnished
to it reasonably deemed to be accurate and reliable and that, except as herein
provided, JCA shall not be accountable for any loss suffered by the company by
reason of the company's non action on the basis of any advice, recommendation or
approval of JCA, its partners, employees or agents.
2. Representations & Indemnification. The Company represents and warrants
to JCA that: the Company will not cause or knowingly permit any action to be
taken in connection with transactions which violates the Securities Act of 1933
or any state securities laws; the Company will cooperate with JCA so as to
permit the transactions to be conducted in a manner consistent with the
applicable state and federal securities laws; that all information and
statements provided by the Company in the transactions will be true and correct;
that the transactions will not be misleading or violative of the anti-fraud
provisions of the Securities and Exchange Act of 1934; current Company
management, as disclosed to JCA, will continue in place after the transactions
for a reasonable period of time; there will be included in the transactions
financial statements of the Company for the last three fiscal years or for such
shorter period as the Company was in existence and the latest unaudited
comparative quarterly or other interim financial statements; the financial
statements will fairly reflect the financial condition of the Company and the
results of its operations at a time and for the periods covered by such
financial statements, and such statements will be substantially as heretofore
represented to the undersigned, the Company does not know of any facts adversely
affecting the transactions; the Company has prepared and delivered to the
undersigned its most recent estimate of sales, earnings, and cash flow and
agrees to update those estimates on a monthly basis during the pendency of this
engagement and any transactions. The Company agrees to indemnify and hold JCA
and its attorneys, accountants, agents and employees, officers and directors,
free and harmless from any liability, cost and expense, including attorneys'
fees in the event of a breach of this representation and warranty. The Company
shall also assume responsibility for the indemnitees' defense in any such
matters except where a conflict exists such that they are required to retain
separate counsel, in which event, the Companies shall pay the legal fees and
expenses, as and when incurred, of separate counsel retained by Indemnitees to
provide such defense.
3. Other Activities of JCA. The Company recognizes that JCA now renders and
may continue to render consulting, financial and other services to other
companies which may or may not have policies and conduct activities similar to
those of the company. JCA shall be free to render such advice and other services
and the Company hereby consents thereto. JCA shall not be required to devote its
full time and attention to the performance of its duties under this Agreement,
but shall devote only so much of its time and attention as it deems reasonable
or necessary for such purposes. JCA does not intend to be engaged by a direct
competitor of the Company without prior written approval.
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4. Control. Nothing contained herein shall be deemed to require the Company
to take any action contrary to its Certificate of Incorporation or By-Laws, or
any applicable statute or regulation, or to deprive its Board of Directors of
their responsibility for any control of the conduct or the affairs of the
Company.
5. Conditions of Performance by JCA. Notwithstanding anything on the
contrary hereinabove set forth, the performance of the obligations of JCA as
provided in this Engagement Letter is specifically subject to and conditioned
upon the following:
a) successful completion of in depth investigative procedures to be
conducted by JCA in respect to the Company, its operations and general
performance as well as its officers and directors (commonly referred to as "due
diligence" procedures);
b) results of the due diligence procedures employed by JCA
satisfactory to JCA in its sole determination; and
c) receipt by JCA of the compensation referred to hereinabove.
The term of this Agreement shall be one year with the date of your acceptance of
this Engagement Letter as evidenced below. JCA or the Company may cancel this
Agreement upon 30 days written notice. Notwithstanding anything to the contrary
in the prior sentence hereto, the Company will remain obligated to pay JCA
compensation as set forth above.
This Engagement Letter sets forth the entire understanding of the parties
relating to the subject matter hereof and supersedes and cancels any prior or
contemporaneous communications, understandings or 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.
This Agreement shall be governed by and construed to be in accordance with the
laws of the State of Florida applicable to contracts made and to be performed
solely in such State by citizens thereof. The parties hereto shall deliver
notices to each other by personal delivery or by registered mail (return receipt
requested) at the addresses set forth herein.
All controversies or claims between the parties hereto or arising out of or
relating to the business combination contemplated by this Agreement, including
but not limited to the making or enforcement of documents relating thereto,
shall be resolved by arbitration in accordance with applicable rules of the
American Arbitration Association. Judgment on the arbitrators' award may be
entered in any court having jurisdiction. If any action or proceeding is brought
to enforce the terms of this Agreement, the prevailing party shall be entitled
to recover all of its reasonable attorney's fees and costs.
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If the terms and conditions of this Engagement Agreement confirm our agreement
and understanding, please execute the copy of this Engagement Agreement in the
space provided below and return it to us.
Very truly yours,
XXXXXX XXXXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Managing Director
Agreed to and accepted this 16 day of February, 1998.
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Navidec, Inc.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
President and CEO
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