ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the __ day of , 1998 by and
between Xxxxx Xxxx & Co., Inc., a Delaware corporation ("Xxxxx Xxxx"), and Pride
Automotive Group, Inc., a Delaware corporation (the "Company").
In consideration of the mutual promises made 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 Xxxxx Xxxx 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 , 1998 to , 2001.
3. Duties of Xxxxx Xxxx: During the term of this Agreement, Xxxxx Xxxx
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 Xxxxx Xxxx
to the Company pursuant to this Agreement (and in addition to the expenses
provided for in Paragraph 5 hereof), the Company shall compensate Xxxxx Xxxx as
follows: (a) The Company shall pay Xxxxx Xxxx a fee of $_______ per month during
the term of this Agreement. The sum of $__________ shall be payable in full on
the date of this Agreement; (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 Xxxxx Xxxx as follows:
Consideration Fee
$-0- to $1,000,000 5% of Consideration
$1,000,001 to $2,000,000 $50,000 plus 4% of the
Consideration between
$1,000,001 and $2,000,000
$2,000,001 to $3,000,000 $90,000 plus 3% of the
Consideration between
$2,000,001 and $3,000,000
$3,000,001 to $4,000,000 $120,000 plus 2% of the
Consideration between
$3,000,001 and $4,000,000
$4,000,001 or more $140,000 plus 1% of the
Consideration above $4,000,001
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
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received, directly or indirectly by the Company or any of its security holders
in connection with any Transaction. Any co-broker retained by Xxxxx Xxxx shall
be paid by Xxxxx Xxxx.
For the purposes of the Agreement, a "Transaction" shall mean (a) any
transaction originated by Xxxxx Xxxx, 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, (b) any transaction
originated by Xxxxx Xxxx whereby the Company acquires any other company or the
assets of any other company or an interest in any other company (an
"Acquisition") or (c) any sale or Acquisition in connection with which the
Company engages an investment banker other than Xxxxx Xxxx and pays such
investment banker a fee in respect of such Transaction.
In the event Xxxxx Xxxx originates a line of credit with a lender, the
Company and Xxxxx Xxxx 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 Xxxxx Xxxx 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. In the event Xxxxx Xxxx 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
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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. 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. All fees to be paid
pursuant to this Agreement, except as otherwise specified, are due and payable
to Xxxxx Xxxx in cash at the closing or closings of any transaction specified in
Paragraph 4 hereof. In the event that this Agreement shall not be renewed or if
terminated for any reason, notwithstanding any such non-renewal or termination,
Xxxxx Xxxx shall be entitled to a full fee as provided under Paragraphs 4 and 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.
The Company and Xxxxx Xxxx shall have the right to modify the compensation
payable on any Transaction provided that such modification is memorialized by a
written agreement signed by both parties.
5. Expenses of Xxxxx Xxxx: In addition to the fees payable hereunder, and
regardless of whether any transaction set forth
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in Paragraph 4 hereof is proposed or consummated the Company shall reimburse
Xxxxx Xxxx for all fees and disbursements of Xxxxx Xxxx'x counsel and Xxxxx
Xxxx'x travel and out-of-pocket expenses incurred in connection with the
services performed by Xxxxx Xxxx pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long-distance telephone
calls.
6. Liability of Xxxxx Xxxx:
(1) The Company acknowledges that all opinions and advice (written or
oral) given by Xxxxx Xxxx to the Company in connection with Xxxxx Xxxx'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 Xxxxx Xxxx 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 Xxxxx Xxxx, or
use Xxxxx Xxxx'x name in any annual reports or any other reports or
releases of the Company without Xxxxx Xxxx'x prior written consent.
(2) The Company acknowledges that Xxxxx Xxxx 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
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that may be prepared by Xxxxx Xxxx will, when and if prepared, be done
solely on the merits or judgment of analysis of Xxxxx Xxxx or any senior
corporate finance personnel of Xxxxx Xxxx.
7. Xxxxx Xxxx'x Services to Others: The Company acknowledges that Xxxxx
Xxxx'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 Xxxxx Xxxx in conducting such business with respect to others,
or in rendering such advice to others.
8. Company Information:
(a) The Company recognizes and confirms that, in advising the Company
and in fulfilling its engagement hereunder, Xxxxx Xxxx will use and rely on
data, material and other information furnished to Xxxxx Xxxx by the
Company. The Company acknowledges and agrees that in performing its
services under this engagement, Xxxxx Xxxx 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, Xxxxx Xxxx 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
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such of its employees and advisors as Xxxxx Xxxx determines to have a
need to know.
9. Indemnification:
a. The Company shall indemnify and hold Xxxxx Xxxx 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 Xxxxx Xxxx 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 Xxxxx Xxxx.
In addition, the Company shall also indemnify and hold Xxxxx Xxxx harmless
against any and all costs and expenses, including reasonable counsel fees,
incurred or relating to the foregoing.
Xxxxx Xxxx shall give the Company prompt notice of any such liability,
claim or lawsuit which Xxxxx Xxxx 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
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therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
Xxxxx Xxxx 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 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 Xxxxx Xxxx 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, Xxxxx Xxxx 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 Xxxxx Xxxx prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject
matter of Xxxxx Xxxx'x indemnification and Xxxxx Xxxx 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
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therefrom any and all proceedings or hearings before any regulatory
bodies and/or authorities.
x.Xx order to provide for just and equitable contribution under the
Act in any case in which (i) any person entitled to indemnification under
this Section 9 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 (ii) 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 Xxxxx Xxxx 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 Xxxxx
Xxxx be
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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.
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
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rights or remedies which either party hereto may have with respect to
the other or hereunder.
10. Xxxxx Xxxx an Independent Contractor : Xxxxx Xxxx 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 Xxxxx Xxxx 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.
11. Miscellaneous:
(1) This Agreement between the Company and Xxxxx Xxxx 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.
(2) 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:
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If to the Company, to: Pride Automotive Group, Inc.
Pride House, Watford Metro Centre
Tolpits Lane
Watford, Hartfordshire
WD1 8SB England
with a copy to: Xxxxxxx & Xxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxx Xxxx, to: Xxxxx Xxxx & Co., Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: XXX X. XXXXXXXXX
Gersten, Savage, Xxxxxxxxx
& Xxxxxxxxxx, LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(3)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.
(4)This Agreement may be executed in any number of counterparts, each
of which together shall constitute one and the same original document.
(5) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(6) 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 shall be
adjudicated before a court located in New York City, and they hereby submit
to the exclusive
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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 11(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.
XXXXX XXXX & CO., INC.
By:________________________________
PRIDE AUTOMOTIVE GROUP, INC.
By:________________________________
J:\pride\financial adv agr.wpd
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