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EXHIBIT 1.3
FINANCIAL ADVISORY AGREEMENT
This Agreement is made and entered into as of the _____ day of
__________, 1997, between DIDAX INC. (the "Company") and Xxxxxx Xxxxx
Securities, Inc. (the "Financial Advisor").
W I T N E S S E T H :
WHEREAS, The Company has engaged the Financial Advisor to act
as the Representative of the Underwriters in connection with the public
offering of the Company's securities; and
WHEREAS, the Financial Advisor has experience in providing
financial and business advice to public and private companies; and
WHEREAS, the Company is seeking and the Financial Advisor is
willing to furnish business and financial related advice and services to the
Company on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of, and for the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree
as follows:
1. PURPOSE. The Company hereby engages the Financial
Advisor on a non-exclusive basis for the term specified in this Agreement to
render financial advisory and consulting advice to the Company as an investment
banker relating to financial and similar matters upon the terms and conditions
set forth herein. However, the advisory will only be rendered if specifically
requested in writing by the CEO of the Company.
2. REPRESENTATIONS OF THE FINANCIAL ADVISOR AND THE
COMPANY. The Financial Advisor represents and warrants to the Company that (i)
it is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD") and that it is engaged in the securities brokerage
business; (ii) in addition to its securities brokerage business, the Financial
Advisor provides consulting advisory services; and (iii) it is free to enter
into this Agreement and the services to be provided pursuant to this Agreement
are not in conflict with any other contractual or other obligation to which the
Financial Advisor is bound. The Company acknowledges that the Financial
Advisor is in the business of providing financial services and consulting
advice (of the type contemplated by this Agreement) to others and that nothing
herein contained shall be construed to limit or restrict the Financial Advisor
in conducting such business with respect to others, or rendering such advice to
others.
3. DUTIES OF THE FINANCIAL ADVISOR. During the term of
this Agreement, the Financial Advisor will provide the Company
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with consulting advice as specified below at the request of the Company,
provided that the Financial Advisor shall not be required to undertake duties
not reasonably within the scope of the consulting advisory service in which the
Financial Advisor is engaged generally. In performance of these duties, the
Financial Advisor shall provide the Company with the benefits of its best
judgment and efforts. It is understood and acknowledged by the parties that
the value of the Financial Advisor's advice is not measurable in any
quantitative manner, and that the amount of time spent rendering such
consulting advice shall be determined according to the Financial Advisor's
discretion.
The Financial Advisor's duties may include, but will not
necessarily be limited to:
1) Advice relating to corporate financing
activities;
2) Recommendations relating to specific business
operations and investments;
3) Advice relating to financial planning; and
4) Advice regarding future financings involving
securities of the Company or any subsidiary.
4. TERM. The term of this Agreement shall be for
thirty-six (36) months commencing on the first day of the month following the
Company's receipt of the proceeds from the contemplated public offering (the
"Commencement Date"); provided, however, that this Agreement may be renewed or
extended upon such terms and conditions as may be mutually agreed upon by the
parties hereto.
5. FEE. The Company shall pay the Financial Advisor a
fee of $108,000 for the financial services to be rendered pursuant to this
Agreement, all of which shall be payable at the Closing Date of the Company's
proposed public offering.
6. EXPENSES. In addition to the fees payable
hereunder, the Company shall reimburse the Financial Advisor, within five (5)
business days of its request, for any and all reasonable out-of-pocket expenses
incurred in connection with the services performed by the Financial Advisor and
its counsel pursuant to this Agreement, including (i) reasonable hotel, food
and associated expenses; (ii) reasonable charges for travel; (iii) reasonable
long-distance telephone calls; and (iv) other reasonable expenses spent or
incurred on the Company's behalf. All such expenses in excess of $500 shall be
pre-approved by the Company.
7. INTRODUCTION OF CUSTOMERS, ORIGINATION OF LINE OF
CREDIT AND SIMILAR TRANSACTIONS. In the event the Financial Advisor originates
a line of credit with a lender or a corporate partner, the Company and the
Financial Advisor will mutually agree on a satisfactory fee and the terms of
payment of such fee.
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In the event the Financial Advisor introduces the Company to a joint venture
partner or customer and sales develop as a result of the introduction, the
Company agrees to pay a fee of five percent (5%) of total sales generated
directly from this introduction during the first two years following the date
of the first sale. Total sales shall mean cost receipts less any applicable
refunds, returns, allowances, credits and shipping charges and monies paid by
the Company by way of settlement or judgment arising out of claims made by or
threatened against the Company. Commission payments shall be paid on the 15th
day of each month following the receipt of customers' payments. In the event
any adjustments are made to the total sales after the commission has been paid,
the Company shall be entitled to an appropriate refund or credit against
future payments under this Agreement.
All fees to be paid pursuant to this paragraph, except as
otherwise specified, are due and payable to the Financial Advisor in cash at
the closing or closings of any transaction specified in this paragraph. In the
event that this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, the Financial Advisor
shall be entitled to a full fee as provided under this paragraph for any
transaction for which the discussions were initiated during the term of this
Agreement and which is consummated within a period of twelve months after
non-renewal or termination of this Agreement. Nothing herein shall impose any
obligation on the part of the Company to enter into any transaction or to use
any services of the Financial Advisor offered pursuant to this paragraph or
this Agreement.
8. USE OF ADVICE BY THE COMPANY; PUBLIC MARKET FOR THE
COMPANY'S SECURITIES. The Company acknowledges that all opinions and advice
(written or oral) given by the Financial Advisor to the Company in connection
with the engagement of the Financial Advisor 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 the Financial
Advisor 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 the Financial Advisor, or use of the Financial Advisor's name in
any annual reports or any other reports or releases of the Company without the
prior written consent of the Financial Advisor.
The Company acknowledges that the Financial Advisor makes no
commitment whatsoever as to making a public trading market in the Company's
securities or to recommending or advising its clients to purchase the Company's
securities. Research reports or corporate finance reports that may be prepared
by the Financial Advisor will, when and if prepared, be done solely on the
merits
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or judgment and analysis of the Financial Advisor or any senior corporate
finance personnel of the Financial Advisor.
9. COMPANY INFORMATION; CONFIDENTIALLY. The Company
recognizes and confirms that, in advising the Company and in fulfilling its
engagement hereunder, the Financial Advisor will use and rely on data, material
and other information furnished to the Financial Advisor by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, the Financial Advisor may rely upon the data, material and other
information supplied by the Company without independently verifying the
accuracy, completeness or veracity of same. In addition, in the performance of
its services, the Financial Advisor may look to such others for such factual
information, economic advice and/or research upon which to base its advice to
the Company hereunder as the Financial Advisor shall in good xxxxx xxxx
appropriate.
Except as contemplated by the terms hereof or as required by
applicable law, the Financial Advisor shall keep confidential all non-public
information provided to it by the Company, and shall not disclose such
information to any third party without the Company's prior written consent,
other than such of its employees and advisors as the Financial Advisor
determines to have a need to know.
10. INDEMNIFICATION. The Company shall indemnify and
hold harmless the Financial Advisor 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, (the "Act"), the Securities Exchange
Act of 1934, as amended (the "1934 Act") or any other federal or state statute,
at common law or otherwise, insofar as said liabilities, claims and lawsuits
(including costs, expenses, awards and/or judgments) arise out of or are in
connection with the services rendered by the Financial Advisor or any
transactions in connection with this Agreement, except for any liabilities,
claims and lawsuits (including awards and/or judgments), arising out of willful
misconduct or willful omissions of the Financial Advisor. In addition, the
Company shall also indemnify and hold harmless the Financial Advisor against
any and all reasonable costs and expenses, including reasonable counsel fees,
incurred relating to the foregoing.
The Financial Advisor shall give the Company prompt notice of
any such liability, claim or lawsuit which the Financial Advisor 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 hearings before any
regulatory bodies and/or authorities.
The Financial Advisor shall indemnify and hold the Company
harmless against any and all liabilities, claims and lawsuits,
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including any and all awards and/or judgments to which it may become subject
under the Act, the 1934 Act or any other federal or state statute, at common
law or otherwise, insofar as said liabilities, claims and lawsuits (including
costs, expenses, awards and/or judgments) arise out of or are based upon
willful misconduct or willful omissions of the Financial Advisor. In addition,
the Financial Advisor shall also indemnify and hold the Company harmless
against any and all reasonable costs and expenses, including reasonable counsel
fees, incurred relating to the foregoing.
The Company shall give the Financial Advisor prompt notice of
any such liability, claim or lawsuit which the Company contends is the subject
matter of the Financial Advisor's indemnification and the Financial Advisor
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.
11. THE FINANCIAL ADVISOR AS AN INDEPENDENT CONTRACTOR. The
Financial Advisor 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 the Financial
Advisor 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.
12. MISCELLANEOUS.
(a) This Agreement between the Company and the Financial
Advisor 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.
(b) Any notice or communication permitted or required
hereunder shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent postage prepaid by certified or registered mail, return
receipt requested, 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: Xx. Xxxxxx X. Xxxxxx, Chairman
DIDAX INC.
0000 Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxx & Xxxxxxx, P.A.
NationsBank Tower, Suite 3500
000 Xxxxxxxxx Xxxxxx Xxxxxx
0
Xxxxx, Xxxxxxx 00000
If to the
Financial Advisor: Xxxxxx X. Xxxx, President
Xxxxxx Xxxxx Securities, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Copy to: Xxxxx X. Xxxxxx, P.A.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
(c) 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.
(d) This Agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same original
document.
(e) No provision of this Agreement may be amended,
modified or waived, except in a writing signed by all of the parties hereto.
(f) This Agreement shall be construed in accordance with
and governed by the laws of the State of Florida, 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 Palm Beach County, Florida, and
they hereby submit to the exclusive jurisdiction of the courts of the State of
Florida located in Palm Beach County, Florida and of the federal courts in the
Southern District of Florida 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 12(b) hereof.
(g) This Agreement has been duly authorized, executed and
delivered by and on behalf of the Company and the Financial Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
Very truly yours,
DIDAX INC.
BY:
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Xx. Xxxxxx X. Xxxxxx, Chairman
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XXXXXX XXXXX SECURITIES, INC.
BY:
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Xxxxxx X. Xxxx, President
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