NON-EXCLUSIVE FINANCIAL ADVISORY AGREEMENT
This Agreement is made and entered into as of the 26 day of January 2001,
("Effective Date") between INSYNQ, INC., a Delaware corporation (the "Company")
and XXXXXX XXXXXX SECURITIES, INC., a Texas corporation, (the "Financial
Advisor").
W I T N E S S E T H :
WHEREAS, the Financial Advisor is an investment banker and registered NASD
broker/dealer and 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, on a non-exclusive basis, 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:
I. PURPOSE - The Company hereby engages the Financial Advisor for the term
specified in this Agreement to render financial advisory consulting advice on a
non-exclusive basis to the Company as an investment banker relating to
financial, market acceptance and similar matters upon the terms and conditions
set forth herein.
II. 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 and public market 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, nor shall Company be restricted from seeking such, or related services,
from other sources, including other investment banking firms.
III. DUTIES OF THE FINANCIAL ADVISOR - During the term of this Agreement, the
Financial Advisor will provide the Company with consulting advice as specified
below, provided that the Financial Advisor shall not be required to undertake
duties not reasonable 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:
A. Advice relating to corporate financing activities and related market
acceptance of Company's business and securities, including monitoring
the progress and status of the Company's marketing efforts through
Financial Advisor's relationships with industry investment bankers;
B. Recommendations relating to specific business operations and
investments;
C. Advice relating to financial planning;
D. Advice regarding future finances involving securities of the Company
or any subsidiary; and
E. Advice relating to the content and timing of press releases to the
public.
IV. TERM - The term of this Agreement shall commence on the Effective Date and
terminate two years from the Effective Date, provided, however, that this
Agreement may be renewed, modified, canceled or extended upon such terms and
conditions as may be mutually agreed upon by the parties hereto.
V. COMPENSATION - The Company shall compensate the Financial Advisor, its
designee or assign in the manner set forth on Schedule A. To the extent that
such compensation may include Restricted Stock (as defined on Schedule A),
Financial Advisor, its designee(s) or assign(s) represents and warrants that
Financial Advisor, its designee(s) or assign(s) (i) is acquiring the Restricted
Stock solely for its own beneficial account and not with a view to, or resale
in connection with any distribution, and (ii) understands that the Restricted
Stock has not been registered under the Securities Act of 1933, as amended, or
any state securities laws by reason of specific exemptions under the provisions
thereof.
VI. EXPENSES - In addition to the compensation payable hereunder, the Company
shall reimburse the Financial Advisor, within five (5) business days of its
request, for any and all out-of-pocket expenses incurred in connection with the
services performed by the Financial Advisor and its counsel pursuant to this
Agreement, including hotel, food and associated expenses, all charges for
travel, long-distance telephone calls and other expenses spent or incurred on
the Company's behalf, provided any expenses must be pre-approved by Company
prior to being incurred.
VII. 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 other than as required by rule
or law without the prior written consent of the Financial Advisor. The Company
acknowledges that the Financial Advisor makes no commitment whatsoever as to
guaranteeing the making of a public trading market in the Company's securities
or to recommending or advising its clients to purchase the Company's
securities; however, nothing contained herein shall preclude such actions at
Financial Advisor's sole discretion and responsibility. Research reports,
corporate finance or like reports that may be prepared by the Financial Advisor
or its contractors or suppliers will, when and if prepared, be initiated on the
merits or judgment of analysis of the Financial Advisor or prepared by a
contractor or supplier, solely on the discretion and judgment of that
individual contractor or supplier.
VIII. 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. Company confirms
that all public information given to Financial Advisor or its contractors or
suppliers shall be accurate and comply with SEC Regulation F.D.
IX. INDEMNIFICATION AND CONTRIBUTION:
A. 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 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 acts or willful omissions or negligence of the
Financial Advisor. In addition, the Company shall also indemnify and
hold harmless the Financial Advisor against any and all 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 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 any omission or untrue statement or alleged
untrue statement of a material fact required to be stated or
necessary to make the statement therein, not misleading, which
statement or omission was made in reliance upon information furnished
in writing to the Company by or on behalf of the Financial Advisor
for inclusion in any registration statement or prospectus or any
amendment or supplement thereto. In addition, the Financial Advisor
shall also indemnify and hold the Company harmless against any and
all costs and expenses, including reasonable counsel fees, incurred
relating to willful acts, negligence or willful material omissions of
Financial Advisor or 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.
B. In order to provide for just and equitable contribution in any case
in which (i) any person entitled to indemnification under this
paragraph 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 provides for indemnification in such case,
or (ii) contribution may be required on the part of any such person
in circumstances for which indemnification is provided under this
paragraph, then, and in each such case, the Company and the Financial
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 from any other document or agreement with respect to
any transactions in connection with this Agreement (taking into
account the portion of the proceeds of the transaction 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, 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 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
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 paragraph are in addition to any other
rights or remedies which either party hereto may have with respect to
the other or hereunder.
X. THE FINANCIAL ADVISOR AS AN INDEPENDENT CONTRACTOR: - The Financial
Advisor shall perform its services hereunder as an independent contractor and
not as an agent or 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. From time to time Financial Advisor
may contract with other entities to perform some of the duties of Financial
Advisor described in Section 3 herein or such other functions as Financial
Advisor in its sole discretion deems appropriate or necessary, and may
compensate such contractors with a portion of the compensation described on
Schedule A.
XI. 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 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:
If to the Company:
Insynq, Inc.
Attention: Xxxx Xxxxx, CEO
0000 Xxxxxxxx Xxxxx
Xxxxxx, X X 00000
Telephone: (000) 000-0000
If to the Financial Advisor:
Xxxxxx Xxxxxx Securities, Inc.
Attention: A. Xxxxx Xxxxxx III
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: 000-000-0000
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.
C. This Agreement may be executed in any number of counterparts, each of
which together shall constitute one and the same original document.
D. No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto:
E. This Agreement shall be construed in accordance with and governed by
the laws of the State of Texas, 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 Xxxxxx
County, Texas, and they hereby submit to the exclusive jurisdiction
of the courts of the State of Texas located in Xxxxxx County, Texas
and of the federal courts in the Southern District of Texas with
respect to any action or legal proceeding commenced by and 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.
F. This Agreement has been duly authorized, executed and delivered by
and on behalf of the Company and the Financial Advisor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
INSYNQ,
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: CEO
XXXXXX XXXXXX SECURITIES, INC.
By: /s/ A. Xxxxx Xxxxxx, 3rd
Name: A. Xxxxx Xxxxxx, 3rd
Title: CEO
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SCHEDULE "A"
Company shall compensate Financial Advisor for the duties performed by
Financial Advisor under this Agreement, as follows:
A. Company shall deliver to Financial Advisor upon execution of this
Agreement, certificates for SIX HUNDRED THOUSAND (600,000) fully-paid
and non-assessable shares of INSYNQ, INC. Common Stock which shall be
restricted as to transferability under the federal securities laws
("Restricted Stock"). The Restricted Stock certificate(s) shall bear
the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 [OR UNDER ANY
APPLICABLE STATE LAW]. THEY MAY NOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED [OR UNDER ANY APPLICABLE STATE
LAW], OR FOR WHICH AN EXEMPTION IS AVAILABLE FROM SUCH REGISTRATION
AND FOR WHICH THE COMPANY IS PROVIDED WITH AN OPINION OF COUNSEL TO
THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT SUCH TRANSFER IS NOT IN VIOLATION OF ANY OF SAID SECURITIES
LAWS.
B. Not later than one year from the date of this Agreement, Company
shall file a XX-0, XX-0, X-0 (or other applicable form) registration
with the Securities and Exchange Commission pursuant to which the
Company will register or qualify the Restricted Stock to the extent
requisite to permit the public offering and sale of the Restricted
Stock, and Company will use its best efforts to cause such
registration statement to become effective as promptly a practicable.
The Company shall bear all expenses incurred in connection
with the filing of such registration statement. Regardless of the
foregoing, all Restricted Shares issued pursuant to this Agreement
shall have "piggyback" registration rights in the first and any
registrations filed by the Company subsequent to the date of this
Agreement, and all of the shares covered by this Agreement shall be
registered in the first of any such registrations by Company
regardless of whether held by Financial Advisor or any subsequent
owner.
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