ADVISORY AND INVESTMENT BANKING AGREEMENT
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This Agreement is made and entered into as of the __th day of March,
2001 by and between Xxxxxx Partners, Inc. ("Xxxxxx"), and Weststar
Environmental, Inc., a Florida 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 Xxxxxx 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 for a one year term commencing.
3. Duties of Xxxxxx: During the term of this Agreement, Xxxxxx
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.
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4. Compensation: In consideration for the services rendered by
Xxxxxx to the Company pursuant to this Agreement (and in addition to the
expenses provided for in Paragraph 5 hereof), the Company shall compensate
Xxxxxx as follows:
(a) The Company shall pay Xxxxxx a fee of $9,000 per
month during the term of this Agreement. The sum of $108,000 shall be payable in
full on the date of this Agreement. In the event that Xxxxxx ceases its business
operations as a financial advisor and investment banker, materially breaches or
is unable to satisfy its performance obligations hereunder, then Xxxxxx shall
repay to the Company the pro rata unearned portion of foregoing fee, based on
the number of months for which performance was delivered and the remaining
number of months in the term.
(b) In the event that any Transaction (as hereinafter
defined) occurs during the term of this Agreement or one year thereafter, the
Company shall pay fees to Xxxxxx as follows:
Consideration Fee
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$ - 0 - to $ 1,000,000 5% of Consideration
$1,000,001 to $2,000,000 4% of Consideration
$2,000,001 to $3,000,000 3% of Consideration
$3,000,001 to $4,000,000 2% of Consideration
$4,000,001 or more 1% of the Consideration in excess of $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 received, directly or indirectly
by the Company or any of its security holders in connection with any
Transaction. Any co-broker or brokers retained by Xxxxxx shall be paid by
Xxxxxx.
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For the purposes of the Agreement, a "Transaction" shall mean (a) any
transaction originated by Xxxxxx, 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 (b) any transaction
originated by Xxxxxx whereby the Company acquires any other company or the
assets of any other company or an interest in any other company (an
"Acquisition"). If the Company engages an investment banker other than Xxxxxx
and pays such investment banker a fee in respect of such Transaction for which
definitive agreements are executed before the second anniversary of the
execution of this Agreement, the Company will pay Xxxxxx a document review fee
of $20,000 for each such Transaction, unless Xxxxxx was unwilling to so act.
In the event Xxxxxx originates a line of credit with a lender, the
Company and Xxxxxx will mutually agree on a satisfactory fee for such services
provided based upon reasonable and customary practice in the industry and the
terms of payment of such fee; provided, however, that in the event the Company
is introduced to a corporate partner by Xxxxxx 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 with consideration to be based upon the amount of the line of credit. In
the event Xxxxxx 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 two years following the date of the first sale, in
lieu of the fees set forth in the schedule above. 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
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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 Xxxxxx 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,
Xxxxxx 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.
5. Expenses of Xxxxxx: 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 Xxxxxx for all fees and
disbursements of Xxxxxx'x counsel and Xxxxxx'x travel and reasonable
out-of-pocket expenses incurred in connection with and in direct furtherance of
the services performed by Xxxxxx pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long-distance telephone
calls. Xxxxxx shall obtain the consent of the Company before incurring any
expense over $1,000.
6. Liability of Xxxxxx:
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(1) The Company acknowledges that all opinions and advice
(written or oral) given by Xxxxxx to the Company in connection with Xxxxxx'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
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person or entity other than the Company shall be entitled to make use of or rely
upon the advice of Xxxxxx 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 Xxxxxx, or use Xxxxxx'x name in any annual reports
or any other reports or releases of the Company without Xxxxxx'x prior written
consent.
(2) The Company acknowledges that Xxxxxx 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,
except that Xxxxxx has committed to make a market in the Company"s securities
for at least 45 days after the effective date of the Company"s initial public
offering. Research reports or corporate finance reports that may be prepared by
Xxxxxx will, when and if prepared, be done solely on the merits or judgment of
analysis of Xxxxxx or any senior corporate finance personnel of Xxxxxx.
7. Xxxxxx'x Services to Others: The Company acknowledges that
Xxxxxx'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 Xxxxxx in conducting such business with respect to others, or
in rendering such advice to others.
8. Company Information:
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(a) The Company recognizes and confirms that, in advising
the Company and in fulfilling its engagement hereunder, Xxxxxx will use and rely
on data, material and other information furnished to Xxxxxx by the Company. The
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Company acknowledges and agrees that in performing its services under this
engagement, Xxxxxx 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, Xxxxxx 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 Xxxxxx determines to have a need to know. Upon termination of this
Agreement, at the request of the Company, Xxxxxx shall deliver to the Company
all non-public material in its possession relating to the business affairs of
the Company.
9. Indemnification:
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a. The Company shall indemnify and hold Xxxxxx and its
directors, officers, employees and agents 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 Xxxxxx or any transactions
in connection with this Agreement, except for any liabilities, claims and
lawsuits (including awards judgments and related costs and expenses), arising
out of acts or omissions of Xxxxxx. In addition, the Company shall also
indemnify and hold Xxxxxx harmless against any and all reasonable costs and
expenses, including reasonable counsel fees, incurred or relating to the
foregoing. If it is finally judicially determined that the Company will not be
responsible for any liabilities, claims and lawsuits or expenses related
thereto, the indemnified party, by his or its acceptance of such amounts, agrees
to repay the Company all amounts previously paid by the Company to the
indemnified person and will pay all costs of collection thereof, including but
not limited to reasonable attorneys' fees related thereto.
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Xxxxxx shall give the Company prompt notice of any such liability,
claim or lawsuit which Xxxxxx 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.
Xxxxxx shall indemnify and hold the Company and its directors,
officers, employees and agents 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
Xxxxxx'x xxxxx negligence, useful misconduct, bad faith or any untrue statement
or alleged untrue statement of a material fact or omission at a material fact
required to be stated or necessary to make the statement provided by Xxxxxx, not
misleading, which statement or omission was made in reliance upon information
furnished in writing to the Company by or on behalf of Xxxxxx 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,
Xxxxxx 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.
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The Company shall give to Xxxxxx prompt notice of any such liability,
claim or lawsuit which the Company contends is the subject matter of Xxxxxx'x
indemnification and Xxxxxx 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 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
Xxxxxx 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 Xxxxxx 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.
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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.
10. Xxxxxx an Independent Contractor : Xxxxxx 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 Xxxxxx 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.
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11. Miscellaneous:
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(1) This Agreement between the Company and Xxxxxx
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:
If to the Company, to: Weststar Environmental, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxx. Xxxxxxx 00000
Attn: Xxxxxxx Xxxx, President
with a copy to: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
If to Xxxxxx, to: Xxxxxx Partners, Inc.
0000 Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X. Xxxx
with a copy to: Sichenzia, Ross & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
(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.
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(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 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
XXXXXX PARTNERS, INC.
By:________________________________
WESTSTAR ENVIRONMENTAL, INC.
By:________________________________
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