FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the ______ day
of __________, 1998 between Network 1 Financial Securities, Inc, a New Jersey
corporation ("Network 1" or the "Consultant"), and International Plastic
Technologies, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"). All references to the Company shall include any and
all subsidiaries thereof in existence on date hereof and to be formed within
the term specified in Paragraph 2 hereof.
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Purpose: The Company hereby engages Network 1 for the
term specified in Paragraph 2 hereof to render advice to the Company as an
investment banker relating to financial and similar matters upon the terms and
conditions set forth herein.
2. Term: Except as otherwise specified in Paragraph 4
hereof, this Agreement shall be effective for a twenty-four-month period,
commencing on the closing date (the "Closing Date") of the Company's initial
public offering of securities pursuant to an effective Registration Statement
on Form SB-2 (File No.: 333-48701) (the "Registration Statement").
3. Duties of Network 1: During the term of this Agreement,
Network 1 shall, upon the request of the Company, provide the Company with
corporate finance and related financial advisory services, advice with respect
to potential acquisitions and other business transactions and advice with
respect to stockholder relations matters. The Consultant shall devote such
time and effort
to the performance of its duties hereunder as the Consultant shall determine
is reasonably necessary. The Consultant may look to such others for such
factual information, investment recommendations, economic advice and/or
research, upon which to base its advice to the Company hereunder, as it shall
deem appropriate. The Company recognizes that Network 1 now renders and may
continue to render financial and other advisory services to other companies
which may or may not have policies and conduct activities similar to those of
the Company, and acknowledges that Network 1 shall be free to render advice
and to perform those services for such other companies.
4. Compensation: In consideration for the services rendered
by Network 1 to the Company pursuant to this Agreement (and in addition to the
expenses provided for in Paragraph 5 hereof), the Company shall pay Network 1
a non-refundable fee of One Hundred Twenty-Thousand Dollars ($120,000),
payable in advance on the Closing Date. In addition, if any Transaction (as
defined below) occurs during the term of this Agreement or within 12 months
thereafter, the Company shall pay fees to Network 1 as follows:
Consideration Fee
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First $1,000,000 5% of First $1,000,000
Second $1,000,000 4% of Second $1,000,000
Third $1,000,000 3% of Third $1,000,000
Fourth $1,000,000 2% of Fourth $1,000,000
In excess of the fourth 1% of Consideration in excess of the
$1,000,000 fourth $1,000,000
For the purposes of this Agreement, a "Transaction" shall mean (i) any
transaction originated by Network 1, other than in the ordinary course of
trade or business of the Company, whereby, directly or indirectly, control of,
or a material interest in, the Company and its subsidiaries or the business
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or assets of the Company and its subsidiaries is transferred for
Consideration, or (ii) any transaction originated by Network 1 whereby the
Company acquires any other company, or the assets of any other company or an
interest in any other company; and "Consideration" shall mean the total market
value on the day of the closing of stock, cash, assets and all other property
(real or personal) exchanged or received, directly or indirectly by the
Company or any of its security holders in connection with any Transaction. Any
co-broker retained by Network 1 shall be paid by Network 1. All Transaction
fees to be paid pursuant to this Agreement, except as otherwise specified, are
due and payable to Network 1 in cash at the closing or closings of a
Transaction. In the event that this Agreement shall not be renewed, or is
terminated for any reason, notwithstanding any such non-renewal or
termination, Network 1 shall be entitled to the entire fee provided in this
Paragraph 4 for any Transaction for which the discussions were initiated
during the term of this Agreement and which is consummated within a period of
12 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.
5. Expenses of Network 1: In addition to the fees payable
hereunder and regardless of whether any Transaction is proposed or
consummated, the Company shall reimburse Network 1 for the reasonable fees and
disbursements of Network 1's counsel and Network 1's reasonable travel and
out-of-pocket expenses incurred in connection with the services performed by
Network 1 pursuant to this Agreement and at the request of the Company,
including without limitation, hotels, food and associated expenses and
long-distance telephone calls. Such expenses shall not exceed $10,000 without
the prior written consent of the Company, which shall not be unreasonably
withheld.
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6. Liability of Network 1: In furnishing the Company with
advice and other services as herein provided, neither Network 1 nor any
officer, director or agent thereof shall be liable to the Company or its
creditors for errors of judgment or for anything, except for the Consultant's
gross negligence or intentional or willful misconduct in the performance of
its duties under this Agreement.
(a) It is further understood and agreed that
Network 1 may rely upon information furnished to it reasonably believed to be
accurate and reliable and that, except as herein provided, Network 1 shall not
be accountable for any loss suffered by the Company by reason of the Company's
action or inaction on the basis of any advice, recommendation or approval of
Network 1, its partners, employees or agents.
(b) The Company acknowledges that all opinions and
advice (written or oral) given by Network 1 to the Company in connection with
Network 1's engagement 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 Network 1 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 Network 1, or use
Network 1's name in any annual reports or any other reports or releases of the
Company without Network 1's prior written consent.
(c) The Company acknowledges that Network 1 makes
no commitment whatsoever as to making a market in the Company's securities or
to recommending or advising its clients to purchase the Company's securities,
except as otherwise provided for in that certain
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Underwriting Agreement between the Company and Network 1 in connection with
the Company's Registration Statement. Research reports or corporate finance
reports that may be prepared by Network 1 will, when and if prepared, be done
solely on the merits based upon an analysis performed by Network 1 and its
corporate finance personnel.
7. Company Information:
(a) The Company shall furnish to the Consultant all
data, material and other information relevant to the performance by the
Consultant of its 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. The Company acknowledges
and agrees that in performing its services under this engagement, Network 1
may rely upon the data, material and other information supplied by the Company
without independently verifying the accuracy, completeness or veracity of
same. In the event that the Company fails or refuses to furnish any such data,
material or information reasonably requested by the Consultant, and thus
prevents or impedes the Consultant's performance hereunder, any inability of
the Consultant to perform shall not be a breach of its obligations hereunder.
(b) Except as contemplated by the terms hereof or
as required by applicable law, Network 1 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 to such of its employees and advisors as Network 1
determines in its sole judgment need to have access thereto. Notwithstanding
the foregoing, the Consultant shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of
the
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public domain; (ii) of which it had independent knowledge prior to disclosure;
(iii) which comes into the possession of the Consultant or its employees or
agents in the normal and routine course of its own business from and through
independent non-confidential sources; or (iv) which is required to be
disclosed by the Consultant pursuant to legal process or in accordance with
governmental or regulatory requirements. 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 it by the Company, or the
existence of other negotiations in the course of its dealings with the Company
or its representatives, the Consultant shall, unless prohibited by law,
promptly notify the Company of such request(s) so that the Company may seek an
appropriate protective order.
8. Indemnification: The Company agrees to indemnify and hold
harmless the Consultant, its 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 costs 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 the Consultant is a party), as and when incurred, directly or
indirectly, caused by, relating to, based upon or arising out of the
Consultant's service pursuant to this Agreement. The Company further agrees
that the Consultant shall incur no liability to the Company or any other party
on account of this Agreement or any acts or omissions arising out of or
related to the actions of the Consultant relating to this Agreement or
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the performance or failure to perform any services under this Agreement,
except for the Consultant's gross negligence or intentional or willful
misconduct. Notwithstanding anything contained herein to the contrary, the
Company shall not indemnify Network 1, and shall incur no liability to Network
1, for any losses, claims, changes, liabilities, costs and expenses arising
out of or related to the Consultant's violation of any rules or regulations
promulgated by the Securities and Exchange Commission. The obligations of the
Company under the Section shall survive the termination of this Agreement.
9. Independent Contractor: Network 1 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 Network 1 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.
10. Miscellaneous:
(a) This Agreement between the Company and Network
1 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 (i) postage prepaid by registered mail. return
receipt requested, or (ii) by facsimile, 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, to: International Plastic Technologies, Inc.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Network 1, to: Network 1 Financial Securities, Inc.
One Financial Galleria
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(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 maybe amended,
modified or waived, except in a writing signed by all of the parties hereto.
(f) This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, 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
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Agreement, shall be adjudicated before a court located in New York City, and
they hereby submit to the exclusive jurisdiction of the courts of the State of
New York located in New York, New York and of the Federal District Court for
the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and they 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 Section 10(b) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
INTERNATIONAL PLASTIC
TECHNOLOGIES, INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
NETWORK 1 FINANCIAL SECURITIES, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
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