FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
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This Agreement is made and entered into as of the day of , 1997 between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & Company, Inc., a New York corporation ("Consultant"),
and ProtoSource, a corporation organized under the laws of the (the "Company").
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 Consultant 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 from _________, 1998 to _________________, 2000. 3.
Duties of Consultant: During the term of this Agreement, Consultant 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. All obligations of the Consultant contained
herein shall be subject to the Consultant's availability to perform such
services and the amount of notice received from the Company. 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 Consultant
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 Consultant shall be free
to render advice and to perform those services for such other companies.
4. Compensation: In consideration for the services rendered by Consultant
to the Company pursuant to this Agreement (and in addition to the expenses
provided for in Paragraph 5 hereof), the Company shall pay Consultant a
non-refundable fee of $180,000, payable in advance, upon the execution of this
Agreement. In addition, if any Transaction (as defined below) occurs during the
term of this Agreement or within twelve months thereafter, the Company shall pay
fees to Consultant as follows:
Consideration Fee
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
Consideration in excess of
the fourth $1,000,000 1% of Consideration in excess
of the fourth $1,000,000
For the purposes of this Agreement, a "Transaction" shall mean (i) any
transaction originated by Consultant, 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 or assets
of the Company and its subsidiaries, is transferred for Consideration, or (ii)
any transaction originated by Consultant whereby the Company acquires any other
company, or the assets of any other company or an interest in any other company;
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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 Consultant shall
be paid by Consultant. All Transaction fees to be paid pursuant to this
Agreement, except as otherwise specified, are due and payable to Consultant 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, Consultant 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 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.
5. Expenses of Consultant: In addition to the fees payable hereunder and
regardless of whether any Transaction is proposed or consummated, the Company
shall reimburse Consultant for the reasonable fees and disbursements of
Consultant's counsel and Consultant's reasonable travel and out-of-pocket
expenses incurred in connection with the services performed by Consultant
pursuant to this Agreement and at the request of the Company, including without
limitation, hotels, food and associated expenses and long-distance telephone
calls.
6. Liability of Consultant:
(a) In furnishing the Company with advice and other services as herein
provided, neither Consultant 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 intentional or willful misconduct in the performance
of its duties under this Agreement.
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(b) It is further understood and agreed that Consultant may rely upon
information furnished to it reasonably believed to be accurate and reliable and
that, except as herein provided, Consultant 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 Consultant, its partners,
employees or agents.
(c) The Company acknowledges that all opinions and advice (written or
oral) given by Consultant to the Company in connection with Consultant'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 Consultant 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 Consultant, or use Consultant's name in
any annual reports or any other reports or releases of the Company without
Consultant's prior written consent.
(d) The Company acknowledges that Consultant 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. Research reports
or corporate finance reports that may be prepared by Consultant will, when and
if prepared, be done solely on the merits based upon an analysis performed by
Consultant and its corporate finance personnel.
7. Company Information:
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(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, Consultant 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, Consultant 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 Consultant 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 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
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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 the performance or failure to perform any services
under this Agreement, except for the Consultant's intentional or willful
misconduct. The obligations of the Company under the Section shall survive the
termination of this Agreement.
9. Independent Contractor: Consultant shall perform its services hereunder
as an independent contractor and not as an employee of the Company or an
affiliate thereof. It is expressly
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understood and agreed to by the parties hereto that Consultant 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 Consultant 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:
If to the Company, to: ProtoSource Corporation
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Consultant: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Wise & Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(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 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 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.
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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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & CO., INC.
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
PROTOSOURCE CORPORATION
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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