EXHIBIT 10.26
INVESTMENT BANKING AGREEMENT
This Agreement has been entered into on April 5, 2004 by and between tarpon
Industries, Inc., located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Tarpon"),
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., LLC, located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
("JGUN").
By execution of this document (the "Investment Banking Agreement" or, the
"Agreement") Tarpon agrees to retain JGUN and JGUN agrees to be retained by
Tarpon, on a non-exclusive basis, pursuant to the following terms and
conditions;
1. SERVICES. JGUN shall perform investment banking services related to
corporate finance matters on behalf of Tarpon. In this regard, JGUN shall
devote such general advisory consultative time and attention to such
presently ongoing and potentially upcoming Tarpon non-transactional
business development matters on which Tarpon shall request its services,
subject to the direction of its Board of Directors. Furthermore, JGUN also
stands ready, on a non-exclusive basis and subject to mutually acceptable
case-by-case terms, to investigate, analyze and process transactional
business development matters deemed appropriate by Tarpon, i.e., business
combinations; capital raisings; joint ventures; shareholder rights
offerings; credit facilities; debt financings; and such other projects
generally considered investment banking activity. It is acknowledged that
Tarpon shall not be required to accept nor use any General Advisory
Services, as defined, provided by JGUN nor will Tarpon be required to
retain JGUN for any Business Combination Services nor Capital Raising
Transactions, as each is defined.
2. TERM. JGUN's retention shall be for twelve (12) months commencing on the
date hereof (the "Term") and automatically renewed yearly unless either
Tarpon or JGUN notifies the other of its intention to not renew prior to
the expiration of the then applicable term.
3. COMPENSATION.
(a) For General Advisory Services (relating to any corporate finance
topic and inclusive of business combination initial due diligence
analysis): JGUN shall be compensated in the amount of $7,500 per
month plus reimbursement of reasonably incurred out-of-pocket
expenses. Payment for the period ending May 4, 2004 shall be made
upon execution of this Agreement and then on the 1st of each month
thereafter. In the event of a business combination transaction fee
due JGUN as hereinafter described, 25% of any such monthly General
Advisory Services fees paid to JGUN to that point shall be applied
against such business combination transaction fees otherwise due.
(b) (For Business Combination Transactions (merger, acquisition, sale
and joint venture): JGUN shall be entitled to receive success based
compensation equal to five percent (5%) of the initial $5,000,000,
four percent (4%) of the next $5,000,000, and three percent (3%)
beyond $10,000,000 of the Total
Consideration (as hereinafter defined, see Exhibit A) relating to
(i) any acquisition of 20% or more of the stock or assets of any
company consummated or agreed to pursuant to term sheet, letter of
intent or similar, and thereafter consummated (ii) any sale of 20%
or more of the stock or assets of Tarpon consummated or agreed to
pursuant to term sheet, letter of intent or similar, and thereafter
consummated, and (iii), any merger or other business combination,
including joint ventures, involving Tarpon, consummated or agreed to
pursuant to term sheet, letter of intent or similar, and thereafter
consummated (any such transactions set forth in (i)-(iii)
hereinafter referred to as a ("Sale Transaction") during the Term or
renewed Term(s), if applicable
(c) For Capital Raising Transactions: Tarpon and JGUN acknowledge that
JGUN shall be entitled to receive success based compensation in a
mutually agreeable combination of cash and warrants to purchase
Tarpon common stock in amounts to be determined on a case-by-case
basis.
(d) For Corporate Projects And Transactions Not Describe In a), b) and
c) Above: JGUN shall be compensated pursuant to mutual agreement of
Tarpon and JGUN based upon the scope of such services contemplated
prior to commencement of such services.
4. SEMI-EXCLUSIVITY. Tarpon agrees that JGUN shall have no preferential right
for the Term and renewed Term(s), if applicable, to participate in any
financing transaction for Tarpon but, nevertheless, Tarpon shall use its
best efforts as follows: (i) with respect to any underwritten public
offering, of equity or debt (which shall not include for purposes hereof
any senior secured bank financing), or Rule 144A offering (collectively
referred to as a "Financing Transaction") raising gross proceeds of
$25,000,000 or less, JGUN shall be afforded the opportunity to "pitch" for
the lead management of such Financing Transaction (whether as underwriter
or placement agent) unless such offering is to be lead managed by a major
bracket underwriting firm, in which event JGUN shall be offered the right
to participate in such Financing Transaction as a co-manager and (ii) with
respect to any Financing Transaction raising gross proceeds in excess of
$25,000,000, JGUN shall be afforded the opportunity to "pitch" its ability
to act as a selling group member.
5. LIABILITY AND INDEMNIFICATION.
(a) JGUN shall not be subject to liability to Tarpon or to any office,
director, employee, shareholder or creditor of Tarpon by virtue of
any act or omission in the course of or connected with the rendering
or providing of general advisory/consulting and/or corporate
transaction services hereunder, except for JGUN acts of bad faith or
gross negligence.
(b) Tarpon agrees to defend, indemnify and hold harmless JGUN from and
against any and all costs, expenses, and liabilities (including
reasonable attorney's fees) which may in any way result from
services rendered by JGUN pursuant to or in
connection with this Agreement, except for JGUN acts of bad faith or
gross negligence.
6. NOTICES. Notices shall be sent to Tarpon and JGUN at their respective
addresses set forth above to the attention of President at Tarpon and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ at JGUN. 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 described here.
7. 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. Any
action relating to this Agreement shall be brought only in Federal and
State courts in the City, County and State of New York.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Tarpon and JGUN, and may not be altered or modified except in writing and
signed by the party to be charged thereby. Tarpon and JGUN acknowledge
that certain terms of an Underwriting Agreement consummated prior to
expiration of the Term may be inconsistent with and shall supercede those
of this Agreement but nevertheless, this Agreement shall, to the extent
not inconsistent, survive in accordance with its terms.
9. BINDING EFFECT. This Agreement shall be binding upon Tarpon and JGUN and
their respective heirs, administrators, successors and assigns and may
only be assigned upon written agreement of Tarpon and JGUN.
The terms and conditions described above are acknowledged and acceptable:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., LLC Tarpon Industries, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director ▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive
Officer