AGREEMENT made as of this 4th day of May, 2007 by and between Andover
Medical, Inc. (the Company) with an address at 510 Turnpike Street, Suite
204, North Andover, MA 01845 and Marc Waldman (the Consultant), with an
address at 10 Century Trail, Harrison, NY 10528-1702.
W I T N E S S E T
WHEREAS, the Consultant is a consultant of
Ortho-Medical Products, Inc., a wholly-owned subsidiary of the Company;
WHEREAS, the Company believes it is in its best
interest to retain Consultant to find potential target companies to be acquired
by the Company and/or facilitate in the acquisition of such target companies
and Consultant wishes to perform such consulting services on behalf of the
WHEREAS, the Company desires to compensate the
Consultant in connection with such services and to retain the Consultant to
provide on-going financial consulting services; and
WHEREAS, the Consultant desires to be retained to
render such services.
NOW, THEREFORE, in consideration
of the premises and the mutual covenants and agreements hereinafter set forth,
the parties hereto hereby agree as follows:
1. The Services. The Company hereby retains the Consultant on
a non-exclusive (to both parties) basis to perform consulting services related
to mergers and acquisitions, corporate finance and other financial services
matters, and the Consultant hereby accepts such retention. In this regard,
subject to the terms set forth below, the Consultant shall furnish to the
Company advice and recommendations with respect to such aspects of the business
and affairs of the Company as the Company shall, from time to time, reasonably
request upon reasonable notice. In addition, the Consultant shall assist the
Company in evaluating and negotiating particular contracts or transactions at
such times and on such schedule as the Company and the Consultant may mutually
agree. In addition to the foregoing
consulting services, the Company and the Consultant acknowledge and agree that
the Consultant may act as a finder or financial consultant in various business
transactions not originated by Consultant, but in which the Company may be
involved, such as mergers, acquisitions or joint ventures.
2. Compensation for Services.
(a) Finders Fees. The Company hereby agrees that in the event
the Consultant shall first introduce the Company or any of its affiliates to
another party or entity, and a transaction is
consummated, the Company shall pay to the Consultant a
fee equal to (i) two (2%) percent of the amount of the Consideration (as
defined below) paid in such transaction, one (1%) percent of which shall be
paid in cash and one (1%) percent of which shall be paid in shares of the
Companys common stock valued at the closing price on the second business day
before such transaction is consummated, plus (ii) options to purchase 20,000
shares of the Companys common stock under the Companys 2006 Employee Stock
Incentive Plan at an exercise price equal to the closing price of the Companys
Common Stock on the second business day before such transaction is consummated
and vesting in 24 equal monthly installments commencing on the day such
transaction is consummated. The underlying shares of Common Stock shall be
included in the next available Form S-8 Registration Statement of the Company.
Such fee shall be paid at the closing of the transaction to which it relates,
and shall be payable whether or not the transaction involves stock, or a
combination of stock and cash, is made on the installment sale basis, or any
other acquisition structure. In addition, if the Company shall, within 12
months immediately following the termination of this Agreement, consummate a
transaction with any party first introduced by the Consultant to the Company
prior to such termination, the Company shall pay to the Consultant a fee with
respect to such transaction calculated in accordance with this paragraph.
(b) Fee for
Consulting Services. For all
transactions not originated by Consultant, but for which Consultant advises the
Company, negotiates or evaluates an investment or business relationship, or
otherwise facilitates the consummation of the closing of a transaction, the
Company shall pay to the Consultant, a fee equal to one percent (1%) of the
amount of the Consideration paid in such transaction, one-half of one percent
(0.5%) of which shall be paid in cash and one-half of one percent (0.5%) of
which shall be paid in shares of the Companys common stock at the closing
price on the second business day before such transaction is consummated.
Provisions regarding Fees.
(i) Definition of Consideration.
For purposes of calculating the Consultants
fee under the foregoing Sections, the term Consideration shall include any
and all forms of value transferred by the purchaser to the seller in such
transaction and treated as purchase price or an adjustment to purchase price
for purposes of generally accepted accounting principles in the Companys
financial statements. Notwithstanding the foregoing, debt owed by a seller
to a third party which is assumed by a purchaser shall not be included in Consideration
for any transaction unless such debt equals more than sixty percent (60%) of
the total value of the transaction. The value of any Consideration shall be as
stated in the relevant documents, or if not stated, the fair market value
thereof (as mutually determined by the Company and the Consultant). To
the extent any Consideration is contingent at the time of closing, the Company
shall pay the Consultant a supplement to his fee at such time as any
additional, contingent Consideration is thereafter paid. This provision
shall survive the expiration or other termination of this Agreement.
(ii) Adjustments to Stock. All share amounts of common stock to be
issued to the Consultant pursuant to Sections 2(a) or (b) shall be adjusted to
account for any stock splits, stock dividends, recapitalizations and similar
events that may occur after the date hereof.
3. Additional Services. If additional services beyond the foregoing
are required by the Company, the Consultant and the Company will discuss the
nature, extent and schedule of such services, and if the parties mutually
agree, the Consultant shall undertake to render such services pursuant to the
terms of a written agreement to be entered into by the parties with respect
thereto, setting forth the terms and conditions thereof (including without
limitation, the additional compensation to be paid by the Company to the
Consultant for such services). Nothing herein shall require the Company to
utilize the Consultants services in any particular transactions nor shall it
limit the Companys obligations arising under any other agreement or
4. Expense Reimbursement. The Consultant shall be entitled to
reimbursement of all reasonable business expenses consistent with the Companys
expense reimbursement policy, as amended from time to time, incurred by him in
the course of providing the services hereunder to the Company, subject to
appropriate documentation and in accordance with any budgets or guidelines
provided to him by the Company from time to time. Any travel required to be taken by the
Consultant hereunder shall be in economy class.
5. General. All obligations of the Consultant contained
herein shall be subject to the Consultants reasonable availability for such
performance, in view of the nature of the requested service and the amount of
notice received. The Consultant shall render the services in person, by
telephone, via video-conferencing or through such other means of communication
as the Consultant and the Company may reasonably deem appropriate. The Consultant shall devote such time and
effort to the performance of its duties hereunder as the Company and the Consultant
shall agree. The Consultant may look to such others for such factual
information, investment recommendations, economic advice and/or research, upon
which to base his advice to the Company hereunder, as he shall deem
appropriate. The Company shall furnish to the Consultant all information relevant
to the performance by the Consultant of his obligations under this Agreement,
or particular projects as to which the Consultant is acting as advisor, which
will permit the Consultant to know all facts material to the advice to be
rendered, and all material or information reasonably requested by the
Consultant. In the event that the Company fails or refuses to furnish any such
material or information reasonably requested by the Consultant, and thus
prevents or impedes the Consultants performance hereunder, any inability of
the Consultant to perform shall not be a breach of his obligations hereunder.
6. Confidential Information. The Consultant will hold in confidence any
confidential information which the Company provides to the Consultant pursuant
to this Agreement unless the Company gives the Consultant permission in writing
to disclose such confidential information to a specific third party; provided,
however, that the Consultant shall have the right to disclose such confidential
information to his advisors, assistants, agents or other professionals, or
those of the Company, who need to know such information in order to enable the
Consultant to perform his services hereunder.
The Consultant shall advise all such disclosees of the confidential
nature of all such disclosed information.
In addition, all confidential information which the Company provided to
the Consultant in connection with any offering materials shall be considered
confidential information for purposes of this Agreement. Notwithstanding the
foregoing, the Consultant shall not be required to maintain confidentiality
with respect to information (i) which is or becomes part of the public domain;
(ii) of which he
had independent knowledge prior to disclosure; (iii)
which comes into the possession of the Consultant in the normal and routine
course of his own business from and through independent non-confidential
sources; or (iv) which is required to be disclosed by the Consultant by
governmental requirements or legal process. If the Consultant is requested or
required (by oral questions, interrogatories, requests for information or
document subpoenas, civil investigative demands, or similar process) to
disclose any confidential information supplied to him by the Company, or the
existence of other negotiations in the course of his dealings with the Company
or its representatives, the Consultant shall, to the extent practicable, unless
prohibited by law, promptly notify the Company of such request(s) so that the
Company may seek an appropriate protective order.
7. Indemnification. The Company shall indemnify and hold the
Consultant harmless, including the Consultants partners, employees, agents,
representatives and controlling persons (and the officers, directors,
employees, agents, representatives and controlling persons of each of them)
from and against any and all losses, claims, damages, liabilities, costs and
expenses (and all actions, suits, proceedings or claims in respect thereof) and
any legal or other expenses in giving testimony or furnishing documents in
response to a subpoena or otherwise (including, without limitation, the cost of
investigating, preparing or defending any such action, suit, proceeding or
claim, whether or not in connection with any action, suit, proceeding or claim
in which either the Company or the Consultant is a party), as and when
incurred, directly or indirectly, caused by, relating to, based upon or arising
out of the Consultants performance of the services under this Agreement to the
maximum extent provided in the Companys Certificate of Incorporation and
By-Laws as in effect on the date hereof and under Delaware Corporation law.
This Section shall survive the termination of this Agreement.
8. No Assignment. This Agreement may not be transferred,
assigned or delegated by any of the parties hereto without the prior written
consent of the other party hereto.
9. Waiver. The failure or neglect of the parties hereto
to insist, in any one or more instances, upon the strict performance of any of
the terms or conditions of this Agreement, or their waiver of strict
performance of any of the terms or conditions of this Agreement, shall not be
construed as a waiver or relinquishment in the future of such term or
condition, but the same shall continue in full force and effect.
10. Term and Termination. This Agreement is for a term of twenty-four
(24) months from the date hereof. This Agreement may be terminated by either
party at any time upon 30 days notice.
All accrued but unpaid fees, and all incurred but unreimbursed expenses,
due to the Consultant but outstanding as of the termination date shall be paid
in full by the Company on such date.
Sections 2, 6 and 7 shall survive the expiration or termination of this
Agreement under all circumstances.
11. Notices. Any notices hereunder shall be in writing and
sent to the Company and to the Consultant at their respective addresses set
forth above. Any notice shall be given by registered or certified mail, postage
prepaid, and shall be deemed to have been given when deposited in the United
States mail. Either party may designate any other address to which notice
shall be given, by giving written notice to the other
of such change of address in the manner herein provided.
12. Governing Law. This Agreement has been made in the State of
New York and shall be construed and governed in accordance with the laws
thereof without giving effect to principles governing conflicts of law.
13. Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof, may not be altered
or modified, except in writing and signed by the party to be charged thereby,
and supersedes any and all previous agreements between the parties relating to
the subject matter hereof.
14. Binding Agreement. This Agreement shall be binding upon the
parties hereto, the indemnified parties referred to in Section 7, and their
respective heirs, administrators, successors and permitted assigns.
IN WITNESS WHEREOF, this Agreement has been executed
by the parties hereto as of the date first above written.
ANDOVER MEDICAL, INC.
/s/ Edwin A. Reilly
Edwin A. Reilly, Chief Executive Officer
/s/ Marc Waldman