EXHIBIT 10.7
FINANCIAL ADVISORY AGREEMENT
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This Agreement is made and entered into as of the _____day of
__________, 1998, between Host America Corporation (the "Company") and
Xxxxxx Xxxxx Securities, Inc. (the "Financial Advisor").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, The Company has engaged the Financial Advisor to act as the
Underwriter in connection with the public offering of the Company's
securities; and
WHEREAS, the Financial Advisor has experience in providing financial
and business advice to public and private companies; and
WHEREAS, the Company is seeking and the Financial Advisor is willing
to furnish business and financial related advice and services to the
Company on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of, and for the mutual promises and
covenants contained herein, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties agree as follows:
1. PURPOSE. The Company hereby engages the Financial Advisor on a
non-exclusive basis for the term specified in this Agreement to render
financial advisory and consulting advice to the Company as an investment
banker relating to financial and similar matters upon the terms and
conditions set forth herein. However, the advisory will only be rendered
if specifically requested in writing by the CEO of the Company.
2. REPRESENTATIONS OF THE FINANCIAL ADVISOR AND THE COMPANY. The
Financial Advisor represents and warrants to the Company that (i) it is a
member in good standing of the National Association of Securities Dealers,
Inc. ("NASD") and that it is engaged in the securities brokerage business;
(ii) in addition to its securities brokerage business, the Financial
Advisor provides consulting advisory services; and (iii) it is free to
enter into this Agreement and the services to be provided pursuant to this
Agreement are not in conflict with any other contractual or other
obligation to which the Financial Advisor is bound. The Company
acknowledges that the Financial Advisor is in the business of providing
financial services and consulting advice (of the type contemplated by this
Agreement) to others and that nothing herein contained shall be construed
to limit or restrict the Financial Advisor in conducting such business with
respect to others, or rendering such advice to others.
3. DUTIES OF THE FINANCIAL ADVISOR. During the term of this
Agreement, the Financial Advisor will provide the Company with consulting
advice as specified below at the request of the Company, provided that the
Financial Advisor shall not be required to undertake duties not reasonably
within the scope of the consulting advisory service in which the Financial
Advisor is engaged generally. In performance of these duties, the
Financial Advisor shall provide the Company with the benefits of its best
judgment and efforts. It is understood and acknowledged by the parties
that the value of the Financial Advisor's advice is not measurable in any
quantitative manner, and that the amount of time spent rendering such
consulting advice shall be determined according to the Financial Advisor's
discretion.
The Financial Advisor's duties may include, but will not necessarily
be limited to:
1) Advice relating to corporate financing activities;
2) Recommendations relating to specific business operations and
investments;
3) Advice relating to financial planning; and
4) Advice regarding future financings involving securities of
the Company or any subsidiary.
4. TERM. The term of this Agreement shall be for twelve (12) months
commencing on the first day of the month following the Company's receipt of
the proceeds from the contemplated public offering (the "Commencement
Date"); provided, however, that this Agreement may be renewed or extended
upon such terms and conditions as may be mutually agreed upon by the
parties hereto.
5. FEE. The Company shall pay the Financial Advisor a fee of
$108,000 for the financial services to be rendered pursuant to this
Agreement, all of which shall be payable at the Closing Date of the
Company's proposed public offering.
6. EXPENSES. In addition to the fees payable hereunder, the Company
shall reimburse the Financial Advisor, within five (5) business days of its
request, for any and all reasonable out-of-pocket expenses incurred in
connection with the services performed by the Financial Advisor and its
counsel pursuant to this Agreement, including (i) reasonable hotel, food
and associated expenses; (ii) reasonable charges for travel; (iii)
reasonable long-distance telephone calls; and (iv) other reasonable
expenses spent or incurred on the Company's behalf. All such expenses in
excess of $500 shall be pre-approved by the Company.
7. INTRODUCTION OF CUSTOMERS, ORIGINATION OF LINE OF CREDIT AND
SIMILAR TRANSACTIONS. In the event the Financial Advisor
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originates a line of credit with a lender or a corporate partner, the
Company and the Financial Advisor will mutually agree on a satisfactory fee
and the terms of payment of such fee. In the event the Financial Advisor
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. Total
sales shall mean cost 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' payments. 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 paragraph, except as otherwise
specified, are due and payable to the Financial Advisor in cash at the
closing or closings of any transaction specified in this paragraph. In the
event that this Agreement shall not be renewed or if terminated for any
reason, notwithstanding any such non-renewal or termination, the Financial
Advisor shall be entitled to a full fee as provided under this paragraph
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. Nothing herein
shall impose any obligation on the part of the Company to enter into any
transaction or to use any services of the Financial Advisor offered
pursuant to this paragraph or this Agreement.
8. USE OF ADVICE BY THE COMPANY; PUBLIC MARKET FOR THE COMPANY'S
SECURITIES. The Company acknowledges that all opinions and advice (written
or oral) given by the Financial Advisor to the Company in connection with
the engagement of the Financial Advisor 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 Financial
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 Financial Advisor, or use of the Financial
Advisor's name in any annual reports or any other reports or releases of
the Company without the prior written consent of the Financial Advisor.
The Company acknowledges that the Financial Advisor makes no
commitment whatsoever as to making a public trading market in the Company's
securities or to recommending or advising its clients to purchase the
Company's securities. Research reports or corporate
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finance reports that may be prepared by the Financial Advisor will, when
and if prepared, be done solely on the merits or judgment and analysis of
the Financial Advisor or any senior corporate finance personnel of the
Financial Advisor.
9. COMPANY INFORMATION; CONFIDENTIALLY. The Company recognizes and
confirms that, in advising the Company and in fulfilling its engagement
hereunder, the Financial Advisor will use and rely on data, material and
other information furnished to the Financial Advisor by the Company. The
Company acknowledges and agrees that in performing its services under this
engagement, the Financial Advisor may rely upon the data, material and
other information supplied by the Company without independently verifying
the accuracy, completeness or veracity of same. In addition, in the
performance of its services, the Financial Advisor may look to such others
for such factual information, economic advice and/or research upon which to
base its advice to the Company hereunder as the Financial Advisor shall in
good xxxxx xxxx appropriate.
Except as contemplated by the terms hereof or as required by
applicable law, the Financial 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 Financial
Advisor determines to have a need to know.
10. INDEMNIFICATION. The Company shall indemnify and hold harmless
the Financial 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 "Act"), the Securities
Exchange Act of 1934, as amended (the "1934 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
Financial Advisor or any transactions in connection with this Agreement,
except for any liabilities, claims and lawsuits (including awards and/or
judgments), arising out of willful misconduct or willful omissions of the
Financial Advisor. In addition, the Company shall also indemnify and hold
harmless the Financial Advisor against any and all reasonable costs and
expenses, including reasonable counsel fees, incurred relating to the
foregoing.
The Financial Advisor shall give the Company prompt notice of any such
liability, claim or lawsuit which the Financial 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
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before any regulatory bodies and/or authorities.
The Financial Advisor 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 Act, the
1934 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 willful
misconduct or willful omissions of the Financial Advisor. In addition, the
Financial Advisor shall also indemnify and hold the Company harmless
against any and all reasonable costs and expenses, including reasonable
counsel fees, incurred relating to the foregoing.
The Company shall give the Financial Advisor prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject
matter of the Financial Advisor's indemnification and the Financial Advisor
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 or
dispose of such liability, claim or lawsuit, excepting therefrom any and
all proceedings or hearings before any regulatory bodies and/or
authorities.
11. THE FINANCIAL ADVISOR AS AN INDEPENDENT CONTRACTOR. The
Financial Advisor 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 the
Financial 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.
12. MISCELLANEOUS.
(a) This Agreement between the Company and the Financial 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 by facsimile and postage prepaid by certified or registered mail,
return receipt requested, 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: Xxxxxxxx X. Xxxxxx, President
Host America Corporation
Two Broadway
Hamden, Connecticut 06518
Copy to: Xxxx X. Xxxxx, Esq.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
If to the
Financial Advisor: Xxxxxx X. Xxxx, President
Xxxxxx Xxxxx Securities, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Copy to: Xxxxx X. Xxxxxx, P.A.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
(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 shall be governed by and construed in accordance
with the laws of the State of Florida applicable to contracts made and to
be performed entirely within the State of Florida. The parties agree that
any action brought by any party against another party in connection with
any rights or obligations arising out of this Agreement shall be instituted
properly in a federal or state court of competent jurisdiction with venue
only in the Fifteenth Judicial Circuit Court in and for Palm Beach County,
Florida or the United States District Court for the Southern District of
Florida, West Palm Beach Division. A party to this Agreement named as a
Defendant in any action brought in connection with this Agreement in any
court outside of the above named designated county or district shall have
the right to have the venue of said action changed to the above designated
county or district or, if necessary, have the case dismissed, requiring the
other party to refile such action in an appropriate court in the above
designated county or federal district.
(g) This Agreement has been duly authorized, executed and delivered
by and on behalf of the Company and the Financial Advisor.
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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.
Very truly yours,
HOST AMERICA CORPORATION
BY:________________________________________
Xxxxxxxx X. Xxxxxx, President
XXXXXX XXXXX SECURITIES, INC.
BY:________________________________________
Xxxxxx X. Xxxx, President
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