Exhibit 10.10
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the day of ,
1996 by and between Maidstone Financial, Inc., a Delaware corporation
("Maidstone" or the "Advisor"), and Community Care Services, Inc., a New York
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 the Advisor 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 , 1996 to , 1999.
3. Duties of the Advisor: During the term of this Agreement,
the Advisor 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
the Advisor to the Company pursuant to this Agreement (and in addition to the
expenses provided for in Paragraph 5 hereof), the Company shall compensate the
Advisor as follows:
(a) The Company shall pay the Advisor a fee of $104,600 for
the entire term of this Agreement. The entire fee shall be payable on the date
hereof.
(b) In the event that any Transaction occurs during the term
of this Agreement or one year thereafter, the Company shall pay fees to the
Advisor as follows:
Consideration Fee
$ - 0 - to $ 500,000 $25,000
$ 500,000 to $5,000,000 5% of Consideration
$5,000,000 or more $250,000 plus 1% of the Consideration
in excess of $5,000,000
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. In the event that the Consideration is not in the form of
Securities of a publicly traded company, the parties shall mutually appoint an
independent third party to make a determination as to the fair market value of
such property whose valuation shall be final. Any co-broker and/or co-
underwriter retained by the Advisor shall be paid by the Advisor.
(c) For the purposes of the Agreement, the term "Transaction"
shall include (i) any transaction originated by the Advisor, other than in the
ordinary course of trade or business of the Company, whereby, directly or
indirectly, control of, or an interest in, the Company or any of its
businesses or any of their respective assets, is transferred for Consideration,
(ii) any transaction originated by the Advisor whereby the Company acquires any
other company or the assets of any other company or an interest in any other
company (an "Acquisition") or (iii) any joint venture or line of credit arranged
by the Advisor for the benefit of the Company as more fully set forth in the
next paragraph.
Notwithstanding Paragraph 4(b) above, in the event the Advisor
originates a line of credit with a lender or a corporate partner, or the Advisor
introduces the Company to a joint venture partner or customer and sales develop
as a result of the introduction, the Company and the Advisor will mutually agree
on a satisfactory fee and the terms of payment of such fee.
(d) All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to the Advisor in cash at the closing
or closings of any Transaction. In the event that this Agreement shall not be
renewed or if terminated for any reason, notwithstanding any such non-renewal or
termination, the Advisor shall be entitled to a full fee and repayment of all
expenses 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 12 months after non-renewal or termination of
this Agreement. Nothing herein shall impose any obligation on the part of the
Company to enter into any Transaction.
5. Expenses of the Advisor: In addition to the fees payable
hereunder and regardless of whether any Transaction is proposed or consummated,
the Company shall reimburse the Advisor for all reasonable fees and
disbursements of the Advisor's counsel and the Advisor's travel and
out-of-pocket expenses incurred in connection with the services performed by
them pursuant to this Agreement, including without limitation, hotels, food and
associated expenses and long-distance telephone calls, except that all fees and
disbursements of the Advisor's counsel and expenses exceeding $1,000 must be
pre-approved in writing by the Company.
6. Liability of the Advisor:
(1) The Company acknowledges that all opinions and advice
(written or oral) given by the Advisor to the Company in connection with the
Advisor'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 the Advisor 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 the Advisor, or use the Advisor's name in
any annual reports or any other reports or releases of the Company, in each
case, without the Advisor's prior written consent.
(2) Other than as to comply with the rules and
regulations of listing on the NASDAQ System, the Company acknowledges that the
Advisor 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 the Advisor, when and if prepared, will be done solely on the merits or
judgment of analysis of the Advisor or any senior corporate finance personnel of
the Advisor.
7. The Advisor's Services to Others: The Company acknowledges
that the Advisor 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 the Advisor 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, the Advisor will use and
rely on data, material and other information furnished to the Advisor by the
Company. The Company acknowledges and agrees that in performing its services
under this engagement, the Advisor 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 in the opinion of counsel to the Company, the Advisor shall
keep confidential all non-public information provided to it by the Company, and
shall not disclose such information to any third party without the Company's
prior written consent, other than such of its employees and advisors as the
Advisor determines to have a need to know. In the event that the Advisor
discloses such information to its employees or advisors, it will cause such
employees or advisors to be bound by the provisions of this Section 8(b).
9. Indemnification:
(a) The Company shall indemnify and hold harmless the Advisor
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
(the "1933 Act"), the Securities Exchange Act of 1934, (the "Act") or any other
federal or state statute, at common law or otherwise, insofar as said
liabilities, claims and lawsuits (including costs, expenses, awards and/or
judgments) arise out of or are in connection with the services rendered by the
Advisor or any Transactions effected in connection with this Agreement, except
for any liabilities, claims and lawsuits (including awards and/or judgments),
arising out of acts or omissions of the Advisor. In addition, the Company shall
also indemnify and hold harmless the Advisor against any and all costs and
expenses, including reasonable counsel fees, incurred or relating to the
foregoing.
The Advisor shall give the Company prompt notice of any such
liability, claim or lawsuit which the Advisor 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
therefrom any and all proceedings or hearings before any regulatory bodies
and/or authorities.
The Advisor shall indemnify and hold harmless the Company
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 costs, expenses, awards
and/or judgments) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or the omission to disclose a material fact
required to be stated or necessary to make the statement not misleading, which
statement or omission was made in reliance upon information furnished in writing
to the Company by or on behalf of the Advisor for inclusion in any registration
statement, prospectus or other document or any amendment or supplement thereto
in connection with any Transaction to which this Agreement applies. In addition,
the Advisor shall also indemnify and hold harmless the Company against any and
all costs and expenses, including reasonable counsel fees, incurred or relating
to the foregoing.
The Company shall give the Advisor prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
the Advisor's indemnification and the Advisor 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.
(b) In order to provide for just and equitable contribution
under the 1933 Act in any case in which (i) any person entitled to
indemnification under this Paragraph 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 Paragraph 9 provides
for indemnification in such case, or (ii) contribution under the 1933 Act may be
required on the part of any such person in circumstances for which
indemnification is provided under this Paragraph 9, then, and in each such case,
the Company and the Advisor 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 or other
document 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 the Advisor be required to contribute any amount in
excess of 10% of the 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 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
Within 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 to so 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 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 Paragraph 9 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
10. The Advisor as an Independent Contractor: The Advisor
shall perform its services hereunder as an independent contractor and not as an
employee of the Company or affiliates thereof. It is expressly understood and
agreed to by the parties hereto that the Advisor 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:
(a) This Agreement between the Company and the Advisor
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: Community Care Services, Inc.
00 Xxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx
Fax Number: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx Xxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxxxxxx, Esq.
Fax Number: (000) 000-0000
If to Maidstone, to: Maidstone Financial, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Fax Number: (000) 000-0000
With a copy to: Gersten, Savage, Kaplowitz & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxxxx, Esq.
Fax Number: (000) 000-0000
(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 may be terminated by a written agreement
signed by both of the parties hereto. Upon termination of the Agreement, no
party hereto shall thereafter have any further liability or obligation hereunder
other than the Company's obligations under Paragraph 4(d).
(g) 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 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.
MAIDSTONE FINANCIAL, INC.
By:
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Name:
Title:
COMMUNITY CARE SERVICES, INC.
By:
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Name:
Title:
