FINANCIAL CONSULTING AGREEMENT
This Agreement is made and entered into as of the __ day of _______,
2000 by and between May Xxxxx Group, Inc., a Maryland corporation ("May Xxxxx")
and Utek Corporation, a Delaware corporation (the "Company").
WHEREAS, pursuant to that certain underwriting agreement dated __, 2000
between May Xxxxx and the Company (the "Underwriting Agreement"), May Xxxxx
agreed, inter alia, to purchase an aggregate of 1,000,000 shares (the "Firm
Securities") of the common stock, par value $.001 per share, of the Company (the
"Common Stock").
WHEREAS, under the terms of the Underwriting Agreement, on the First
Closing Date (as defined therein) the Company agreed to execute and deliver to
May Xxxxx an agreement to employ the services of May Xxxxx as a financial
consultant to the Company;
WHEREAS, the First Closing Date is the date hereof;
NOW, THEREFORE, in consideration of the mutual promises made in the
Underwriting Agreement and 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 paragraph 4 hereof, this Agreement
shall be effective from _________, 2000 to ___________, 2003.
3. Duties of May Xxxxx. During the term of this Agreement, May Xxxxx shall
seek out Transactions (as hereinafter defined) on behalf of the Company and
shall furnish advice to the Company in connection with any such Transactions.
4. Compensation. In consideration for the services rendered by May Xxxxx to
the Company pursuant to this Agreement (and in addition to the expenses provided
for in Paragraph 5 hereof), the Company shall compensate May Xxxxx as follows:
a. Contemporaneous with the execution and delivery of this Agreement,
the Company shall pay May Xxxxx a fee equal to $120,000.
b. In the event that any Transaction (as hereinafter defined) occurs
during the term of this Agreement or one year thereafter, the Company
shall pay fees to May Xxxxx as follows:
i. if the Consideration is $500,000 or less-- $25,000;
ii. if the Consideration is greater than $500,000 but not greater
than $5,000,000-- 5% of Consideration
iii. If the Consideration is in excess of $5,000,000-- $250,000
plus 1% of the Consideration in excess of $5,000,000.
c. For the purposes of this Agreement,"Consideration" shall mean the
total market value on the day of the closing of stock, cash, assets
and all other property (real or personal) exchanged or received,
directly or indirectly by the Company or any of its security holders
in connection with any Transaction. Any co-broker retained by May
Xxxxx shall be paid by May Xxxxx.
d. For the purposes of the Agreement, a "Transaction" shall mean:
i. any transaction originated by May Xxxxx, other than in the
ordinary course of trade or business of the Company, whereby,
directly or indirectly, control of or a material interest in the
Company or any of its businesses or any of their respective
assets, is transferred for Consideration; or
ii. any transaction originated by May Xxxxx whereby the Company
acquires any other company or the assets of any other company or
an interest in any other company (an "Acquisition").
e. In the event May Xxxxx originates a line of credit with a lender,
the Company and May Xxxxx will mutually agree on a satisfactory fee
and the terms of payment of such fee; provided, however, that in the
event the Company is introduced to a corporate partner by May Xxxxx in
connection with a merger, acquisition or financing and a credit line
develops directly as a result of the introduction, the appropriate fee
shall be the amount set forth in the schedule above.
f. In the event May Xxxxx 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%), or such mutually
agreed upon amount, of total sales generated directly from this
introduction during the first two years following the date of the
first sale. Total sales shall mean cash 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.
g. Commission payments shall be paid on the 15th day of each month
following the receipt of customers' payment. 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.
h. All fees to be paid pursuant to this Agreement, except as otherwise
specified, are due and payable to May Xxxxx in cash at the closing or
closings of any transaction specified in Paragraph 4 hereof.
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
reasonable fees and disbursements of May Xxxxx'x counsel and May Xxxxx'x
reasonable 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. Obligation after Termination. In the event that this Agreement shall not
be renewed or if terminated for any reason, notwithstanding any such non-renewal
or termination, May Xxxxx shall be entitled to a full fee as provided under
Paragraph 4 hereof and expenses as provided under Paragraph 5 hereof, 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.
7. Liability of May Xxxxx.
a. 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.
b. The Company acknowledges that May Xxxxx makes no commitment
whatsoever as to making a 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 May Xxxxx will, when and if prepared, be done solely on
the merits or judgment of analysis of May Xxxxx or any senior
corporate finance personnel of May Xxxxx.
8. May Xxxxx'x Services to Others. The Company acknowledges that May Xxxxx'x
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.
9. 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 the 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 and who agree to keep such information confidential.
10. Indemnification.
a. The Company shall indemnify and hold May Xxxxx 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 hereunder 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 hereunder 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.
b. 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 (i) any act or omission of May Xxxxx or (ii)
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 a 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.
c. In order to provide for just and equitable contribution under
the Act in any case in which (x) any person entitled to
indemnification under this Section 10 makes claim for
indemnification pursuant hereto but it is judicially determined
(by the entry of 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 (y)
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
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 portion 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 notwithstanding the above
in no event shall May Xxxxx be required to contribute any amount
in excess of 10% of the public offering price of any securities
to which such Prospectus applies; and provided, that, in any such
case, 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.
d. 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.
11. 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.
12. Miscellaneous.
a. 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.
b. 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: Utek Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
with a copy to: Xxxxxxx, Savage & Xxxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to May Xxxxx, to: May Xxxxx Group, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: Xxxxxx X. Xxxxxxxx
XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 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 (except for disputes relating
to any Transactions covered by this Agreement or fees relating
thereto for which a suit may be brought in the appropriate
jurisdiction) 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 12(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:________________________________
UTEK CORPORATION
By:________________________________
