(10) Investment Banking Services Agreement between
Diagnon Corporation and ▇▇▇▇▇▇▇ Associates,
Inc. dated March 12, 1997.
▇▇▇▇▇▇▇ Associates, Inc.
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CONFIDENTIAL
March 12, 1997
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman, President
and Chief Executive Officer
Diagnon Corporation
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Dear ▇▇▇▇:
The following shall confirm the agreement between Diagnon Corporation ("Diagnon"
or the "Company") and ▇▇▇▇▇▇▇ Associates, Inc. ("SA"), whereby SA shall provide
Diagnon certain investment banking services.
Scope of Services
SA shall render the following investment banking services to Diagnon:
1. Assist and advise the Company in evaluating it's financial
alternatives.
2. Assist and advise in the preparation of a confidential Private
Placement Memorandum describing Diagnon and its proposed activities and
use of proceeds.
3. Assist and advise the Company in identifying Investors (the
"Investors") who may have an interest in providing capital to Diagnon.
4. Assist and advise Diagnon in contacting the Investors.
5. Assist and advise Diagnon in making financial presentations to the
Investors.
6. Assist and advise Diagnon in negotiation of the terms of any proposed
investment by the Investors.
7. Assist and advise Diagnon in any other matters necessary to facilitate
the financing.
SA does not in any way guarantee or underwrite any securities proposed
to be issued by Diagnon.
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Page 2
Other
SA is a registered broker dealer with the NASD. SA is acting strictly as a
private placement agent herein, pursuant to regulation D and only deals with
institutional investors.
Compensation
SA shall be compensated as follows:
SA shall receive a private placement fee of 5% of the gross proceeds raised or
committed by the Investors.
Such fees shall be payable at closing and subject to a minimum of $100,000.
Expenses
Diagnon shall reimburse SA for any out-of-pocket expenses incurred in connection
with the engagement herein. SA shall notify the Company in the event that it
incurs any legal expenses. It is expected that the out-of-pocket expenses shall
be in the range of $15,000. However, they could be higher or lower pending
market conditions.
Term
The initial term ("Term") of the engagement shall be for 6 months from the date
herein. Thereafter, the agreement may be terminated by Diagnon at any time upon
payment of a termination fee of $25,000. However, if in the twenty-four month
period following the Term, Diagnon enters into any agreement with any parties
whom SA contacted or with whom significant discussions occurred during the Term
of the engagement, then SA shall be due all fees as applicable.
Indemnification
Diagnon shall indemnify SA in connection with the engagement therein. Such
indemnification is incorporated as Exhibit A, and will survive the expiration,
termination or supercession of this agreement.
Exclusivity
The services rendered by SA therein shall be on an exclusive basis.
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Construction
This agreement will be construed in accordance with the laws of the State of New
York.
If the preceding is acceptable, please indicate by signing below. We look
forward to working with Diagnon on this important assignment.
Sincerely,
▇▇▇▇▇▇▇ ASSOCIATES, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
_______________________
▇▇▇▇▇ ▇▇▇▇▇▇▇
President
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_______________________
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Principal
Accepted and agreed:
DIAGNON CORPORATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman, President and Chief Executive Officer
Diagnon Corporation
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Exhibit A
▇▇▇▇▇▇▇ Associates, Inc.
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Gentlemen:
This letter will confirm that we (the undersigned also being the "Company")
agree to indemnify you in connection with your retention to provide investment
banking services to the Company pursuant to the engagement letter dated as of
the date hereof (the "Engagement Letter"), as set forth below. The
indemnification provisions of this letter will apply equally to you, your
officers, directors, agents, employees and affiliates and each person, if any,
who controls you or any of your affiliates (collectively, the "SA Indemnitees").
We will furnish to you such information and data (the "Information") relating to
the Company as you reasonably request and will provide you with reasonable
access to the Company's officers, directors, employees, counsel and independent
accountants. You will not disclose the Information except to such of you and
your affiliates' officers, employees and agents as need to know the Information
in connection with your services under the Engagement Letter. You may rely upon
the Information without independently verifying it, and you do not assume
responsibility for its accuracy or completeness, whether or not you
independently verify the Information, and you will not make an independent
appraisal of the assets of the Company.
We will indemnify and hold harmless the SA Indemnitees from and against all
losses, claims, damages and liabilities (collectively, "Liabilities") which are
(a) related to actions taken or omitted to be taken (including any untrue
statements made or any statements omitted to be made) by us or by any SA
Indemnitee with our consent or in conformity with our instructions, or (b)
otherwise related to your acting pursuant to the Engagement Letter, unless,
solely in the case of this clause (b) a court of competent jurisdiction
determines that such Liabilities resulted primarily from an SA Indemnitee's
willful misconduct or gross negligence. We will also reimburse each SA
Indemnitee for any expenses incurred, including fees and disbursements of
counsel, (collectively, "Expenses") in connection with any formal or informal
proceeding in connection with your acting pursuant to the Engagement Letter,
whether or not an SA Indemnitee is named a party or any liability results.
▇▇▇▇▇▇▇ Associates, Inc. 2
Promptly after your receive notice of the commencement of any proceeding in
connection with your activities pursuant to the Engagement Letter, you will
notify us in writing. We will assume the defense, including the employment of
counsel satisfactory to you and payment of such counsel's fees and
disbursements. Should you determine that separate counsel is necessary (whether
due to the existence of different defenses, potential conflicts of interest or
otherwise), or if we have not assumed the defense, then you may employ separate
counsel, and we shall pay such counsel's reasonable fees and disbursements as
incurred.
If any indemnification or reimbursement sought pursuant to this agreement is
held by a court to be unavailable for any reasons, then you and we will
contribute to the Liabilities and Expenses for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate to
reflect the relative benefits to you, on the one hand, and us, on the other
hand, in connection with the transaction or transactions contemplated by the
Engagement Letter, which contribution by you shall in no event exceed the amount
of fees actually received by you pursuant to the Engagement Letter. We both
agree that the relative benefits to you and to us of any transaction or proposed
transaction contemplated by the Engagement Letter shall be deemed to be in the
same proportion that (1) the fee payable to you pursuant to the Engagement
Letter with respect to the transaction giving rise to the Liabilities or
Expenses bears to (2) the total value received or paid by or proposed to be
received or paid by us in such transaction (whether or not such transaction is
consummated).
In the event of any proceedings in connection with the services provided under
the Engagement Letter, you agree that, if requested, your representatives will
testify or otherwise assist us in preparing for testimony. We will pay you
additional compensation as agreed to by us both to fully compensate you at your
customary rates for testifying in connection with such proceedings or testimony
and will reimburse you for all expenses reasonably incurred by you in connection
with the proceedings, including the fees and disbursements of your legal
counsel.
Agreed and Accepted: Sincerely,
▇▇▇▇▇▇▇ ASSOCIATES, INC. DIAGNON CORPORATION
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________ _________________________
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Principal Chairman, President
and Chief Executive Officer
