EXHIBIT 10.5
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into on the 1st day of July 1996
between GKN Securities Corp. ("GKN" or the "Consultant") and US Opportunity
Search, Inc. (the "Company").
In consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Company hereby engages Consultant hereof to render financial
consulting and investment banking advice to the Company upon the terms and
conditions set forth herein.
2. This Agreement shall commence on July 1, 1996 and continue for a
term of twenty-four (24) months.
3. During the term of this Agreement, Consultant shall provide the
Company with such regular and customary financial consulting advice as is
reasonably requested by the Company, provided that 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 Consultant'
advice is not readily quantifiable, and that although Consultant shall be
obligated to render the advice contemplated by this Agreement upon the
reasonable request of the Company, in good faith, Consultant shall not be
obligated to spend any specific amount of time in so doing. Consultant' duties
may include, but will not necessarily be limited to, providing recommendations
concerning the following financial and related matters:
(a) Disseminating information about the Company to the investment
community at large;
(b) Rendering advice and assistance in connection with the
preparation of annual and interim reports and press releases;
(c) Assisting in the Company's financial public relations;
(d) Arranging, on behalf of the Company, at appropriate times,
meetings with securities analysts;
(e) Rendering advice with regard to internal operations,
including:
(i) the formation of corporate goals and their
implementation;
(ii) the Company's financial structure and its divisions or
subsidiaries;
(iii) securing, when and if necessary and possible, additional
financing through banks and/or insurance companies; and
(iv) corporate organization and personnel; and
1
(f) 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; and
(vii) sales of stock by insiders pursuant to Rule 144 or
otherwise.
In addition to the foregoing, upon Company's request, Consultant
agrees to furnish advice to the Company in connection with (A) 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 (B) 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").
Consultant shall also render such other financial consulting and/or
investment banking services ("Other Services") as may from time to time be
agreed upon by Consultant and the Company.
4. The Company shall pay Consultant the following compensation:
(a) upon execution of this Agreement, the Company is issuing to
GKN (or its designees) warrants ("Warrants") to purchase 250,000 shares of the
Company's Common Stock, exercisable for a period of three years commencing on
the date hereof at an exercise price of $6.50 per share. The Warrants are fully
earned by GKN as of the execution of this Agreement and may not be terminated by
the Company for any reason. The Warrants are evidenced by a warrant agreement(s)
in the form of Exhibit A hereto; and
(b) such fees as may be mutually agreed upon with respect to
Transactions, Bank Financings and Other Services.
5. Intentionally Omitted.
6. In addition to the fees payable hereunder, the Company shall
reimburse Consultant for all reasonable travel and out-of-pocket expenses
incurred in connection with the services performed by Consultant pursuant to
this Agreement, promptly after submission to the Company of appropriate evidence
of such expenditures; provided, however, that any single expense or group of
related expenses of more than $1,000 shall require prior written approval from
the Company.
7. (a) The Company acknowledges that all opinions and advice
(written or oral) given by Consultant to the Company in connection with
Consultant's 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 Consultant to be given hereunder, and no such
opinion or advice shall be used for any manner or for any purpose, nor may the
Company make any public references to Consultant, or use the Consultant's name
in any annual reports or any other reports or releases of the Company, without
Consultant's prior written consent.
2
(b) The Company acknowledges that Consultant makes no commitment
to make a market in the Company's securities, to recommend or advise its clients
to purchase the Company's securities, or to prepare research or corporate
finance reports.
8. Consultant will hold in confidence any confidential information
which the Company provides to Consultant pursuant to this Agreement which is
designated by an appropriate stamp or legend as being confidential.
Notwithstanding the foregoing, Consultant shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of the
public domain not due to the breach of this Agreement by Consultant; (ii) of
which it had independent knowledge prior to disclosure; (iii) which comes into
the possession of Consultant in the normal and routine course of its own
business from and through independent non-confidential sources; or (iv) which is
required to be disclosed by Consultant by laws, rules or regulators. If
Consultant is requested or required to disclose any confidential information
supplied to it by the Company, Consultant shall, unless prohibited by law,
promptly notify the Company of such request(s) so that the Company may seek an
appropriate protective order.
9. The Company acknowledges that Consultant 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 Consultant in
conducting such business with others, or in rendering such advice to others.
10. The Company recognizes and confirms that, in advising the
Company hereunder, Consultant will use and rely on data, material and other
information furnished to Consultant by the Company, without independently
verifying the accuracy, completeness or veracity of same.
11. The Company agrees to indemnify and hold harmless GKN, it
employees, agents, representatives and controlling persons from and against any
and all losses, claims, damages, liabilities, suits, actions, proceedings, costs
and expenses (collectively, "Damages"), including, without limitation,
reasonable attorney fees and expenses, as and when incurred, if such Damages
were directly or indirectly caused by, relating to, based upon or arising out of
the rendering by GKN of services pursuant to this Agreement, so long as GKN
shall not have engaged in intentional or willful misconduct, or shall have acted
grossly negligently, in connection with the services provided which form the
basis of the claim for indemnification. This paragraph shall survive the
termination of this Agreement.
12. Consultant shall perform its services hereunder as an
independent contractor and not as an employee or agent of the Company or any
affiliate thereof. Consultant shall have no authority to act for, represent or
bind the Company or any affiliate thereof in any manner, except as may be
expressly agreed to by the Company in writing from time to time.
13. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof. No provision of this
Agreement may be amended, modified or waived, except in a writing signed by both
parties. This Agreement shall be binding upon and inure to the benefit of each
of the parties and their respective successors, legal representatives and
assigns. This Agreement may be executed in counterparts. In the event of any
dispute under this Agreement, then and in such event, each party agrees that the
same shall be submitted to the American Arbitration Association ("AAA") in the
City of New York, for its decision and determination in accordance with its
rules and regulations then in effect. Each of the parties agrees that the
decision and/or award made by the AAA may be entered as judgment of the Courts
or the State of New York, and shall be enforceable as such. This Agreement shall
be construed and enforced in accordance with the laws of the State of New York,
without giving effect to conflict of laws.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the day and year first above written.
GKN SECURITIES CORP. US OPPORTUNITY SEARCH, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxx
------------------ -------------------
Xxxxxxx X. Xxxxxx Xxxxxxx Xxxxx
4
