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EXHIBIT 6(e)
CONSULTING AGREEMENT
It is hereby understood that ViStra Growth Partners, Inc. (the "Financial
Advisor") will advise America's Senior Financial Services, Inc. ("AMSE") to
develop and implement AMSE's public markets strategy. Financial Advisor and
AMSE shall hereinafter collectively be referred to as the "Parties".
The Purpose and scope of this Agreement is to set forth the services to be
provided to AMSE by Financial Advisor, the compensation to be received by
Financial Advisor from AMSE for providing such services and the terms and
conditions that shall govern the relationship between the Parties. Financial
Advisor has been engaged as an exclusive financial advisor by AMSE for a period
of three (3) years commencing May 1, 1998.
In connection with the foregoing assignment, the Financial Advisor will provide
the following services to AMSE:
a. Study and review the business operations, historical financial
performance of AMSE (based upon management's forecast of financial
performance) so as to enable the Financial Advisor to provide advice to
AMSE.
b. Assist AMSE in attempting to formulate the optimal strategy to meet
AMSE's working capital and capital resources needs during the period of
this Agreement.
c. Assist AMSE in effecting the exercise of the outstanding warrants to
purchase AMSE's Common Stock and/or other authorized and outstanding shares
of Stock as applicable.
d. Assist in the formulation of the terms and structure of any reasonable
proposed business combination transaction ("Transaction") involving AMSE
and presented to Financial Advisor by AMSE, or to AMSE by Financial
Advisor.
e. Arrange for or assist AMSE in obtaining debt and/or equity financing in
such amounts that AMSE and the Financial Advisor agree are required for the
purpose of financing AMSE's operations ("Financing").
f. Assist in any presentation to the Board of Directors of AMSE, as
requested, in connection with a proposed Transaction or Financing.
g. If requested, render an opinion (a "Fairness Opinion") to the Board of
Directors of AMSE as to whether the consideration to be paid in any
proposed acquisition of any business by AMSE is fair and appropriate from
a financial point of view to its shareholders.
h. Advise AMSE as to the expected reaction of the financial community to
any Transaction and assist in determining the optimum means of
communicating the pertinent aspects, such as strategic considerations,
benefits to AMSE and financial impact, to the financial community.
Please note that the Financial Advisor is not an underwriter, broker-dealer nor
a merchant bank in any financing transaction and does not purport to serve in
that capacity. Further, Financial Advisor does not represent that it is acting
as an Attorney or Certified Public Accountant, and AMSE should seek
professional advice necessary in all legal and accounting matters. Rather,
Financial Advisor's role is to use its best efforts to assist AMSE in its effort
to obtain financing and to perform the advisory services detailed herein.
Accordingly, Financial Advisor will identify potential investors, help
negotiate one or more mutually agreeable transaction(s) and coordinate the
needed professionals to prepare the documentation, review same to confirm that
it meets the needs of AMSE and assure the timely closing of the contemplated
transaction(s).
For providing the financial advisory and investment banking services, AMSE
agrees to compensate the Financial Advisor as follows:
TRANSACTION FEE - ACQUISITIONS
It is understood by the Parties that Financial Advisor is relying upon AMSE to
provide compensation to it based on the successful completion of one or more
transactions and/or financing as herein defined. Upon execution of
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this Agreement between the Financial Advisor and AMSE, AMSE shall make an
initial payment to the Financial Advisor in the amount of $100.00. Upon AMSE's
receipt of a signed copy of this Agreement, AMSE shall cause a check to be
written to Vistra to remit the $100 as agreed.
1. In the event the Financial Advisor arranges for or assists in a
transaction closed by AMSE, a transaction fee ("Transaction Fee")
computed as follows and payable in the event of and upon the closing of
a Transaction: five percent (5%) of the first two million dollars; four
percent (4%) of the next two million dollars; three percent (3%) of the
next two million dollars; two percent (2%) of the next two million
dollars and one percent (1%) of the balance of the value of the
transaction, but in no event less than $25,000 for any transaction
consummated by AMSE.
2. For transactions involving acquisition candidates identified by AMSE
or its management who are acquired by or merged with AMSE and where
Financial Advisor assists to structure or negotiate such a transaction,
Financial Advisor shall be paid cash compensation for the consummation
of the transaction out of the proceeds of the transaction as follows:
A success fee based on seventy-five (75%) percent of the Modified
Xxxxxx Formula defined in the preceding Paragraph.
3. In the event of a merger or reorganization of AMSE, Financial
Advisor shall be compensated as follows: a success fee to be paid "in
kind" based on the modified Xxxxxx Formula defined in Paragraph 1,
above.
A Transaction means everything paid or payable by one party to the other in a
transaction, including but not limited to, cash, securities, promissory notes,
loans or any other purchase related consideration including payments contingent
upon future events or conditions all of which are agreed to be an integral part
of the transaction. Any such Transaction Fee due to the Financial Advisor will
be paid in cash or other consideration that is acceptable to the Financial
Advisor, at the closing of the particular Transaction for which the Transaction
Fee is due.
TRANSACTION FEE - PRIVATE PLACEMENT OR SECONDARY PUBLIC OFFERING
As part of this agreement, AMSE agrees to retain Financial Advisor to advise
AMSE with respect to AMSE's ongoing capital formation initiatives and generally,
to consult to the company. Financial Advisor will receive compensation for such
consulting services and a "success fee" under the different circumstances
outlined herein, as follows:
1. Financial Advisor shall be compensated for the consummation of any
Private Placement Financing(s), and paid at each closing, out of the
proceeds of the Financing, as follows: a success fee based on a
"Modified Xxxxxx Formula", as herein defined, (7.5% of the first
$500,000; 6% of the next two million dollars of transaction value; 4%
of the next two million dollars of transaction value; 3% of the next
two million dollars of transaction value; 2% of the next two million
dollars of transaction value; and 1% of the transaction value in
excess of $8.5 million), provided however, that if AMSE identifies the
funding source, or in the event of a secondary public offering, then
the compensation provided to the Financial Advisor shall be 60% of the
success fee calculated hereunder.
2. In addition to the cash compensation to be paid to Financial Advisor
upon the closing of a Financing as described in Number 1 above,
Financial Advisor shall be entitled to participate in the equity of
AMSE after a Private Placement Financing has been funded or a
secondary public offering has been completed. Specifically, Financial
Advisor shall receive .5% of the equity of AMSE for each $500,000 of
capital raised by Financial Advisor up to a maximum amount of 5% of
AMSE's equity based on the shares issued and outstanding immediately
after the capital raise. In addition to the grant of equity as detailed
herein, Financial Advisor shall receive options to purchase common
stock of AMSE under the following terms and conditions: Financial
Advisor shall receive, without limitation, options to purchase 0.75%
of the
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company's common stock for each $500,000 of cash consideration received by AMSE
pursuant to the efforts of Financial Advisor. Said options shall expire five (5)
years from the date of the financing. The exercise price of the options shall be
100% of the per share price paid by an investor(s) pursuant to the Financing, or
the average per share price of AMSE's common stock for the twenty (20) days
preceding the closing of a debt funding. All equity earned by Financial Advisor
shall be subject to the same dilution factors as is the privately held stock of
the founding shareholders. Company agrees to provide reasonable piggyback,
cashless exercise and non-dilutive provisions with regard to such options. The
Financial Advisor hereby agrees to provide Xxxxxx X. Xxxxx with an irrevocable
proxy with respect to the voting rights associated with any shares obtained by
the Financial Advisor pursuant to this paragraph 2. Financial Advisor further
agrees to normal and reasonable lock-up provisions with respect to the shares
obtained by the Financial Advisor pursuant to this paragraph 2, subject to the
other provisions of this paragraph.
In the event of a successful funding as described herein, AMSE shall retain
Financial Advisor as a consultant with respect to such matters as may from time
to time be requested by the Board of Directors of AMSE, any of its
subsidiaries, or members of AMSE's Executive Committee. In exchange for these
Consulting Services to be provided by Financial Advisor for a period of
twenty-four (24) months subsequent to the completion of the Private Placement
or Secondary Public Offering, Financial Advisor shall be paid a monthly
retainer in an amount to be determined by mutual agreement between the Board of
Directors of AMSE and the Financial Advisor, provided however, that the minimum
monthly retainer shall not be less than $5,000 per month, to be paid on a
mutually acceptable schedule that recognizes the Company's normal cash flow
requirements and leaves adequate cash resources for the Company to properly
fund its ongoing operation.
OTHER CONSIDERATION
In addition to any fees that may be payable to the Financial Advisor hereunder
and regardless of whether any Transaction or Financing is consummated:
(i) AMSE will be responsible for all of its legal and other professional
fees associated with the preparation and review of any necessary
documentation and the closing of any agreed upon transaction. Any investor
or acquisition candidate will be responsible for all of his or its legal
and other professional fees associated with the closing of any agreed upon
transaction. And, should Financial Advisor choose to retain professionals
in addition to those retained by AMSE, then Financial Advisor will be
responsible for all of such legal and professional fees unless approved in
writing by AMSE. In the event either Party shall enforce any remedy at law
or in equity and is the prevailing Party in such action, it shall be
entitled to recover its reasonable attorneys' fees and cost including on
appeal from the other Party.
(ii) AMSE hereby agrees from time to time upon request to reimburse the
Financial Advisor (a) for all reasonable travel, legal and all other
out-of-pocket expenses incurred in performing the services hereunder (it is
understood that the reimbursement for expenses in excess of $200.00 shall
be subject to the prior approval of AMSE, such approval not to be
unreasonably withheld); and (b) for all reasonable travel, legal and
out-of-pocket expenses incurred in assisting AMSE to prepare for, or defend
against any action, suit, proceeding, or claim brought or threatened to be
brought arising out of or based upon our services hereunder and in
providing evidence, producing documents or otherwise participating in any
such action, suit, proceeding, or claim except in the event that the costs
are incurred as a result of the ordinary negligence or willful misconduct
of the financial advisor.
Financial Advisor acknowledges that AMSE will be providing confidential
information to Financial Advisor. The Parties hereto agree that they will
cooperate with each other and provide full due diligence, and that all
conversations, documentation, or work products will be kept in the utmost
confidence. Financial
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Advisor agrees to execute as part of this Agreement a more detailed
confidentiality and non-disclosure agreement. Likewise, AMSE acknowledges that
Financial Advisor will be providing confidential information to AMSE.
Accordingly, AMSE agrees that the information, including but not limited to
Financial Advisor data base of investors, methods, systems and procedures, will
be kept confidential and shall not, without the prior written consent of
Financial Advisor, be disclosed by AMSE. Also, in recognition of the value
which Financial Advisor place on the information as defined herein, for the
term of this agreement and for a period of one (1) year thereafter, AMSE shall
not, without Financial Advisor's written consent, participate in any business
venture with any person or company introduced to it directly or indirectly by
Financial Advisor. Finally, Financial Advisor intends to introduce the Client to
its contacts including private and institutional financing sources or strategic
alliances. AMSE agrees that it will respect Financial Advisor's relationships
with these investors and other sources of financing and that AMSE shall not
participate in or permit the circumvention of any obligation to Financial
Advisor created by this Agreement by any means. It is agreed that should the
Client receive funds from a financing source introduced by Financial Advisor
within a period of one (1) years from the date of introduction, the Client
shall promptly pay Financial Advisor its fees according to this Agreement. As
used herein, the term "introduced" shall mean one or more formal meetings (where
a formal meeting is defined as a meeting with a principal investor or his
authorized agent who has been qualified by Financial Advisor and who has
reviewed AMSE's materials and expressed an interest in making an investment in
AMSE) or substantive discussions in connection with the provision of funds, and
shall exclude sources to whom the client is previously known or to whom the
client has been previously introduced prior to the introduction facilitated by
Financial Advisor.
Recognizing the matters of the type contemplated in this engagement sometimes
result in litigation and that the Financial Advisor's role is advisory, AMSE
agrees to hold the Financial Advisor harmless and to indemnify the Financial
Advisor (including any of its affiliated companies and any director, officer,
employee or agent of the Financial Advisor) and any other controlling person
within the meaning of Section 15 of the Securities Act of 1993 (the "1993 act")
or Section 20(a) of the Securities Exchange Act of 1934 (the "1934 act") or the
Financial Advisor (including any of its affiliated companies) (collectively,
"Indemnified Persons") from and against any and all losses, claims, damages,
liabilities or expenses whatsoever as incurred by an Indemnified Person in
investigating, preparing or defending any litigation or proceeding, commenced or
threatened, or in connection with any claim whatsoever, whether or not resulting
in any liability, to which such Indemnified Person may become subject under
any applicable Federal or state law or otherwise caused by or arising out of our
based upon or otherwise relating to or in connection with the Financial
Advisor's engagement hereunder, or any Transaction and if such indemnification
were for any reason not to be available, to contribute to the settlement, loss,
or expenses involved in the proportion that AMSE's interest bears to the
Financial Advisor's interest in any transaction referred to herein. Under no
circumstances, however, shall contributions by the Financial Advisor exceed the
fees received by the Financial Advisor pursuant to this letter. However, such
indemnification and contribution shall not apply to any claim, loss or expense,
which has arisen solely from the Financial Advisor's ordinary negligence or
willful misconduct in performing its services hereunder.
The indemnity provided herein shall remain operative and in full force and
effect regardless of (i) any withdrawal, termination, or consummation or failure
to initiate or consummate any transaction referred to herein, (ii) any
investigation made by or on behalf of any Indemnified Person, (iii) any
termination or the completion or expiration of this Agreement or the Financial
Advisor's engagement as AMSE's Financial Advisor and (iv) whether or not the
Financial Advisor shall be called upon to render any formal or informal advise
in the course of such agreement.
The invalidity or enforceability of any particular provision of this Agreement
shall affect the other provisions hereof, and this Agreement shall be construed
in all respects as if such invalid or unenforceable provision were omitted.
The terms and conditions of this Agreement constitute an offer on the part of
Financial Advisor to provide the services comtemplated herein to AMSE. Upon
execution, this Agreement may only be modified by an addendum which shall be in
writing and which shall be incorporated and merged into this Agreement as if
fully
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set forth at the time of the initial execution of this Agreement. All such
addenda hereto shall not alter the original terms and conditions of this
Agreement, except as specifically stated in the addendum.
Should AMSE not pay invoices upon presentation, any material, documentation, or
work completed by Financial Advisor shall be returned immediately to Financial
Advisor. Work performed by Financial Advisor and not returned upon request shall
constitute work accepted and shall be paid for by AMSE based on normal and
customary fees for such work product. During the term of this Agreement, work
may be submitted to AMSE in rough form such as research and final drafts of work
product. The Parties hereto agree that non-payment of an invoice upon
presentation shall constitute a termination and breach of this Agreement.
However, the Financial Advisor agrees that AMSE shall pay such invoices in a
mutually decided manner on a case by case basis, (such as was demonstrated in
the processing of the DOW transaction invoices), that is to say in a manner that
preserves adequate cash resources to allow AMSE to protect the ordinary course
of its operations. This Agreement shall not be assigned by either Party without
the prior written consent of the parties.
No waiver by a Party of any default or breach by any other Party under this
Agreement shall operate as a waiver of any future default or breach, whether of
like or different character or nature.
The Company may terminate this Agreement with the Financial Advisor pursuant to
its terms at any time for cause by giving written notice of termination. Such
termination will become effective upon the giving of such notice. Upon any such
termination for cause, the Financial Advisor shall have no right to the
transaction fees or other consideration as provided for hereunder. For purposes
of this agreement, "cause" shall mean: (i) the Chief Executive Officer of the
Financial Advisor is convicted of a felony which is related to the Financial
Advisor's services to be provided to AMSE hereunder or to the business of the
Company; (ii) the Chief Executive Officer of the Financial Advisor, in carrying
out his duties hereunder, has been found in a civil action to have committed
gross negligence or intentional misconduct resulting in either case in material
harm to the Company, or (iii) the Financial Advisor materially breaches any
provision of this Agreement. The term "found in a civil action" shall not apply
until all appeals permissible under the applicable rules of procedure or
statutes have been determined and no further appeals are permissible.
Other than the provisions for termination of the Financial Advisor by AMSE,
either Party may terminate this Agreement upon the occurrence of any of the
following events: (i) an assignment by the other Party for the benefit of
creditors; or (ii) the filing of a voluntary or involuntary petition by or
against the other Party under any federal or state law for the purpose of
adjudicating the other Party bankrupt, or (iii) the filing of a voluntary or
involuntary petition by or against the other Party for reorganization,
dissolution, or arrangement on account of or to prevent bankruptcy or
insolvency, or (iv) the appointment of a receiver for the assets of the other
Party; or (v) loss of any permit or approvals needed to conduct the business of
the parties. Each of the foregoing events shall constitute a default hereunder
and a breach of this Agreement. All remedies of both Parties hereunder are
cumulative and may, to the extent permitted by law, be exercised concurrently or
separately, and the exercise of any one remedy shall not preclude the exercise
of any other remedy. No failure or delay on the part of either Party to exercise
any right or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by either Party of any right or remedy hereunder
preclude any other or further exercise of any right or remedy. If any payment is
not made when due hereunder, the Parties shall pay interest on such payment at
the maximum rate permitted by Florida law.
Any notice required or permitted by this Agreement shall be in writing and shall
be deemed given at the time it is deposited in the United States Mail, postage
prepaid, certified or registered mail, return receipt requested or hand
delivered with a receipt addressed to the Party whom it is to be given as
follows:
AMSE: Financial Advisor:
00000 XX 00xx Xxxxx ViStra Growth Partners, Inc
Xxxxx Xxxxx, Xxxxxxx 00000 0000 XX 00xx Xxxxxx
Attention: Xxxxxx X. Xxxxx, President Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, President
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Either Party may change its address to which notices shall be sent by a notice
similarly sent.
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Florida and venue for any dispute relating to or
arising under this Agreement shall be in Broward County, Florida courts.
This Agreement represents the entire understanding of the Parties with respect
to the subject matter hereof and supersedes and merges herein all prior
negotiations, understanding, agreements and representations. No amendment of
this Agreement shall be binding or any affect unless in writing duly signed by
the Party against which such amendment is sought to be enforced.
Any titles herein have been inserted as a matter of convenience of reference
only and shall not control or affect the meaning or construction of any of the
terms and provisions hereof. As used in this Agreement, the plural shall include
the singular and the singular shall include the plural whenever appropriate.
The Parties hereto may execute this Agreement in any number of separate
counterparts, each of which, when executed and delivered by the Parties hereto,
shall have the force and effect of any original. All such counterparts shall be
deemed to constitute one and the same instrument.
The Parties to this Agreement each agree to keep the contractual relationship
and the terms and conditions herein confidential except as may be required by
force of law or due to demand of any federal or state or local agency, or except
to the Party's attorney, accountant or employees who have a need to know. Each
Party agrees to notify the other Party if disclosure is required.
IT IS HEREBY AGREE THAT THE TERMS AND CONDITIONS AS CONTAINED HEREIN ARE
SATISFACTORY TO ALL PARTIES AND THEY SET THEIR HANDS AND SEAL TO THIS AGREEMENT
THIS 25TH DAY OF AUGUST 1998.
For ViStra Growth Partners, Inc.:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
Date: 8-25-98
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Agreed for America's Senior Financial Services, Inc.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
Date: 8/25/98
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