Exhibit 10.10
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
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This agreement is made and entered into on the 9th day of August 2000 (the
"Effective Date") between Consultant and GraphOn, 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 for the term specified in Paragraph
2 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 August 9, 2000 and continue for a term
of 12 months.
3. During the term of this Agreement, Consultant and Consultant's
affiliates 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 the Consultant's 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's duties may include, but will not necessarily be limited
to, providing recommendations concerning the following financial and
related matters:
a. 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
b. 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
Consultant as used herein shall also mean and refer to any of
Consultant's affiliates rendering services here under.
In addition to the foregoing, 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 "Bank Financing").
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Consultant shall also render such other financial consulting and/or
investment-banking services as may from time to time be agreed upon by the
consultant and the Company.
4. The Company shall pay the Consultant the following compensation:
a. Upon execution of this Agreement, the Company is issuing to Consultant
(or its designees) warrants ("Warrants") to purchase 285,000 shares
of the Company's Common Stock, exercisable for a period of five years
from the date of this Agreement, at an exercise price equal to the
average closing bid price of the Company's common stock for a period
of 20 business days prior to the Effective Date of this Agreement.
The Warrants are evidenced by a warrant agreement(s) in the form of
Exhibit A hereto.
5. In addition to the above,
a. In the event Consultant directly or indirectly originates a Bank
Financing, the Company and Consultant will mutually agree on a
satisfactory fee.
b. If Consultant acts as an underwriter, placement agent or advisor in
the sale or distribution of securities by the Company to the public
or in a private transaction (an "Offering"), Consultant shall
receive, as compensation for services rendered, an amount to be
mutually agreed upon.
c. Fees and expenses payable to Consultant with regard to fairness
opinions and valuations will be determined by mutual agreement at
such time as the nature and terms of such opinions and valuations are
affirmed.
All fees to be paid pursuant to this paragraph 5, except as otherwise
agreed in writing, are due and payable to Consultant in cash at the
closing or closings of any transaction; the parties acknowledging and
agreeing that if the gross proceeds of any financing or other transaction
is to be realized by the Company over time, Consultant's fees will be
calculated and payable pro rata contemporaneously with the receipt by the
Company of such proceeds. In the event that this Agreement shall not be
renewed, or if this Agreement is terminated for any reason, then
notwithstanding any such non-renewal or termination, Consultant shall be
entitled to receive the full fee provided hereunder for any transaction
for which the discussions or introductions were initiated by consultant
during the term of this Agreement.
The parties acknowledge and agree that notwithstanding anything o the
contrary in this Agreement, the Company is under no obligation to enter
into any transaction originated or proposed by Consultant. Consultant has
no power to bind or commit the Company to any proposed transaction or
financing, which transaction or financing shall be subject to acceptance
by the Company in writing and formal approval by the Company's Board of
Directors.
6. In addition to the fees payable hereunder, and regardless of whether
any transaction set forth in paragraph 5 is proposed or consummated,
upon submission of itemized expense statements by Consultant in the
manner reasonably specified by the Company, 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, which reimbursement shall be made within a
reasonable period of time after submission of such expense statements.
All such expenditures in excess of $500 will be submitted to the
Company for approval in advance.
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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.
(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 acknowledges and agrees that its disclosure of any
confidential information of the Company may result in irreparable
injury and damage to the Company. Consultant will hold in confidence
any confidential information, which the company provides to Consultant
pursuant to this Agreement. 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 he
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 aggress to indemnify and hold harmless consultant, its
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
Consultant of services pursuant to this Agreement, so long as
consultant shall not have engaged in intentional or willful misconduct,
or shall have acted negligently, in connection with the services
provided which form the basis of the claim for indemnification;
provided, however, that (a) the company receives prompt written
notification of any claim for which it is being requested to provide
indemnification pursuant to this Section, (b) the company may assume,
in a prompt fashion, sole control of the defense or settlement of such
a claim, including the right to choose counsel for such defense or
settlement, provided, however, that in the event that counsel chosen by
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the Company has a conflict of interest in defending Consultant,
consultant may, at the Company's expense choose its own counsel and (c)
the Company receives, at its expense, such reasonable assistance from
Consultant as the Company may request. In the event that the Company
assumes sole control of the defense or settlement of such claim,
Consultant may, at its expense, participate in such defense or
settlement. 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 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
or nearest city, 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 of 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.
Consultant GraphOn Inc.
By: /s/ By: /s/
Title: Title:
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Exhibit A
Warrant Agreement
The warrant agreement referred to in the Consulting Agreement between Consultant
and GraphOn, Exhibit A, is incorporated by reference from Registrant's form S-3,
file number 333-51420, filed with the SEC on December 7, 2000.
