AGREEMENT FOR FINANCIAL ADVISORY SERVICES
Xxxxxxxxx Capital, LLC, a California Limited Liability Company ("Xxxxxxxxx
Capital"), and OnTrak Systems, Inc., a California corporation (the "Company"),
make the following agreement:
1. SERVICES. Xxxxxxxxx Capital will perform (i) the Consulting and Financial
Advisory Services listed in Exhibit A hereto, and, (ii) solely in the discretion
of the Company, if and when requested by the Company, the Acquisition
Transaction Services listed in Exhibit A. The Company will cooperate with
Xxxxxxxxx Capital in connection with this engagement and agrees to make
available to Xxxxxxxxx Capital such documents and other information reasonably
required, which information shall be held in confidence by Xxxxxxxxx Capital,
except as disclosure may be authorized in writing by the Company or as may be
required pursuant to legal process.
Xxxxxxxxx Capital agrees that the personal services and attention of
Xxxx Xxxxxxxxx are expected and required by the Company during this
engagement and any failure to provide such services and attention would
constitute a material breach of the Agreement and grounds for termination of
the Agreement for cause.
2. COMPENSATION. In consideration for the performance by Xxxxxxxxx Capital of
the services described in paragraph 1 and Exhibit A, the Company hereby agrees
to pay Xxxxxxxxx Capital fees as set forth in Exhibit B.
3. EXPENSES. Upon receipt of an invoice therefor, the Company will promptly
reimburse Xxxxxxxxx Capital for its actual travel outside the Bay Area,
telephone, facsimile, printing and other reasonable out-of-pocket expenses
incurred during, and directly attributable to this engagement; however, any
expense item over $100 must be approved in advance by the Company and any
expenses remaining unpaid at the termination of this engagement shall be paid at
that time. Xxxxxxxxx Capital will not accumulate over $500 in unapproved
expenses (items under $100) without the Company's prior approval.
XXXXXXXXX CAPITAL/ONTRAK
AGREEMENT FOR FINANCIAL ADVISORY SERVICES
PAGE 2
4. TERM/TERMINATION. The term of this engagement shall be one year from the
date hereof; provided however, this engagement may be terminated by the Company
or Xxxxxxxxx Capital at any time with or without cause, upon written advice to
that effect to the other party. If the Company terminates this engagement
without cause during the performance of Acquisition Transaction Services, the
Company shall pay Xxxxxxxxx Capital a pro rata allocation of the scheduled
Success Fee upon any Closing of the Transaction which was the subject of such
services.
5. MISCELLANEOUS. This agreement contains the entire agreement between
Xxxxxxxxx Capital and the Company concerning the subject matter hereof and
supersedes all prior understandings and agreements, if any. This Agreement will
be governed by, and construed in accordance with, the laws of the State of
California. Any waiver of any right or obligation hereunder must be in writing
and signed by the party to be charged therewith. Any and all disputes arising
out of this agreement shall be resolved by arbitration under the rules of the
American Arbitration Association, with the prevailing party entitled to
reimbursement of reasonable attorneys' fees.
Date: October 1, 1995 Date: October 1, 1995
XXXXXXXXX CAPITAL, LLC ONTRAK SYSTEMS, INC.
By________________________ By___________________________
Xxxx Xxxxxxxxx Xxx Xxxxx
President Chief Executive Officer
XXXXXXXXX CAPITAL/ONTRAK
ENGAGEMENT AGREEMENT
EXHIBIT A
Xxxxxxxxx Capital will perform the following Services for the Company in
connection with this engagement:
A. CONSULTING AND FINANCIAL ADVISORY SERVICES (ONGOING/MONTHLY)
1. As requested, provide advice to Management concerning financial,
investor/shareholder and administrative matters.
2. Assist the Chief Financial Officer in preparing financial forecasts and on
other financial matters as requested.
3. Assist Management in corporate development activities, including the
identification and preliminary discussion and analysis of prospective
acquisitions of businesses, product lines and acquisitions or licenses of
technology.
B. ACQUISITION TRANSACTION SERVICES (IF AND WHEN REQUESTED BY THE COMPANY)
1. Familiarize itself with the management, business, operations, products,
intellectual property, marketing rights, prospects and financial condition of
acquisition prospects (hereafter "Prospects").
2. Advise and assist the Company in determining a valuation range for each
Prospect or proposed transaction, including licensing activities.
3. Advise and assist the Company in devising a procedure and approach to
solicitation of Prospects, handling of interested Prospects and preparing and
making presentations to Prospects as necessary.
4. Lead the Company's contacts and negotiations with Prospects and elicit
offers or acceptances to any offers made by the Company.
5. Assist the Company and its Board of Directors in analyzing and handling any
offers, and in devising a strategy and tactics in negotiating with Prospects.
6. Assist the Company and its attorney in negotiations with interested parties
to obtain a firm offer/agreement acceptable to the Company.
7. Assist in achieving a binding agreement and closing the transaction.
8. Conduct primary and secondary research related to the above.
XXXXXXXXX CAPITAL/ONTRAK
ENGAGEMENT AGREEMENT
EXHIBIT B
In consideration of the services specified in paragraph 1 and Exhibit A of
this Agreement, the Company agrees to compensate Xxxxxxxxx Capital as follows:
CONSULTING AND FINANCIAL ADVISORY SERVICES
Ten thousand dollars ($10,000) per month during the term hereof, which sum
shall not be credited to any Acquisition Transaction Closing Fees earned.
ACQUISITION TRANSACTION SERVICES
Upon the Closing of any Acquisition or License Transaction for which the Company
utilizes the services of Xxxxxxxxx Capital, a Success Fee in the following
amounts, unless otherwise agreed:
Transaction Type Transaction Size Success Fee
---------------- ---------------- -----------
License or Purchase of
Technology, in the form
of Intellectual Property All $25,000
Acquisition of a business or
technology, via a purchase
of assets or stock, and any
associated intellectual
property All The greater of (i)
one-half of one per
cent (.005%) of the
consideration paid by
Company, or
(ii) $50,000.
