FINANCIAL ADVISORY/INVESTMENT BANKING AGREEMENT
This AGREEMENT made as of this 26th day of April 2000, by and between METHOD
PRODUCTS CORP., a Florida corporation, (the "Company"), with its principal place
of business at 1301 Copans Road, Suite F-1, Pompano Beach, Florida 33064, and
Thornhill Group, Inc. a Florida corporation ("THORNHILL") having an offices for
the transaction of business located at 1900 Corporate Blvd., Suite 305 West,
Boca Raton, Florida 33431.
RECITALS
WHEREAS, The Company desires to obtain the investment banking, advisory services
and corporate finance expertise of THORNHILL.
WHEREAS, THORNHILL desires to provide the investment banking, advisory services
and corporate finance expertise required by the Company, and advise the company
on how to become a publicly trading corporation.
NOW, THEREFORE, in consideration of the mutual promises set forth herein, the
parties hereto hereby agrees as follows:
1. During the term of this Agreement, THORNHILL is hereby retained by the
Company to provide investment banking, advisory services to the Company. In
addition to said services, THORNHILL, will assist the company with corporate
finance matters, including, without limitation, advice regarding capital
structure, capital offerings, joint ventures, financial strategies, mergers,
acquisitions and divestitures. THORNHILL shall provide such investment banking
and advisory services as are reasonably requested by the Company during the term
of this Agreement. Unless otherwise agreed to by THORNHILL, all services
hereunder shall be performed by THORNHILL, in its sole discretion, at its
principal place of business or other offices. Notwithstanding anything contained
herein to the contrary, the services to be performed by THORNHILL hereunder may
be performed by any employee of, or consultant to THORNHILL, in its sole
discretion.
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2. The term of this Agreement shall be fore three years from May 1, 2000,
through April 30, 2003. The Company agrees that it will not enter into similar
agreements during the term of this Agreement without the prior written consent
of THORNHILL.
3. In consideration of the services to be rendered and performed by THORNHILL
during the term of this Contract, the Company will pay THORNHILL a fee of
$10,000 or 20,000 shares of the Company's common stock, per month during the
term of this Contract. In consideration for the performance of services
hereunder, the Company hereby agrees to pay to THORNHILL a retainer in the form
of 60,000 shares of the Company's common stock, upon execution of this
agreement. These shares shall be registered with the next or first registration
statement filed by the Company.
In consideration for the performance of services hereunder, the Company hereby
agrees to pay to THORNHILL such success fees as outlined below plus THORNHILL
shall also be reimbursed for all out-of-pocket expenses incurred in the
performance of its duties, including but not limited to, attorney's and other
professional fees and expenses, travel, meals, lodging, long distance telephone,
photocopies, printing, couriers, facsimiles, and other expenses incurred by
THORNHILL and by any professional from time to time in connection with any of
the activities mentioned herein. In addition to the foregoing, the Company shall
bear all the Company's approved fees, disbursements, printing and mailing,
Internet listing services and expenses, without limitation, the Company's legal
and accounting fees and disbursements and the cost of background checks on all
key management personal not to exceed $2,500, that THORNHILL deems necessary.
The Company agrees to pay such approved fees that are reasonable and customary
and expenses after closing, and to reimburse THORNHILL within 10 days upon
presentation of monthly invoice. THORNHILL agrees that no single expense item
from time to time sought to be reimbursed shall exceed $2,500, without the prior
approval or request of the Company.
As compensation for THORNHILL's services hereunder, the Company agrees to pay
THORNHILL, a 10% placement fee plus a 3% non-accountable expense allowance on
all sales made by THORNHILL or the officers, directors or employees of the
Company in a proposed Private Placement for the Company on terms to be
determined. In addition, the Company shall grant the Placement Agent a five-year
option to purchase an addition 10% of the Stock sold in the placement, under the
same terms as the Offering.
In the event the Company effectuates a merger, acquisition, joint venture, or
other similar business relationship or business transaction ("Transaction") for
the Company subsequent to the date hereof and or prior to two years from the
date of termination of this Agreement, irrespective of any reason for such
termination, and such Transaction is effectuated as a result or consequence of
any introduction made directly or indirectly by THORNHILL through any third
party introduced by THORNHILL to the Company, or by a person whose introduction
to the Company can be traced back to THORNHILL, during the term of this
Agreement, or which THORNHILL was requested by The Company to provide advice,
then the Company hereby agrees to pay THORNHILL the following consideration,
which payment shall be due and payable on the date of any such closing with
respect thereto:
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10% of the first $2,000,000 of total consideration paid in the Transaction,
plus
8% of the next $2,000,000 of total consideration paid in the Transaction,
plus
6% of the next $2,000,000 of total consideration paid in the Transaction,
plus
4% of the next $2,000,000 of total consideration paid in the Transaction,
plus
2% of the balance of total consideration paid in the Transaction.
For purposes of this Agreement, "consideration" shall mean the aggregate
consideration paid by the acquirer or The Company in connection with the merger,
joint venture, acquisition or divestiture, described herein and shall include
all cash, the principal of any notes executed as part of the purchase price for
such Transaction, the value, as determined in good faith by the parties hereto,
of any securities paid or exchanged in connection with merger, joint venture,
acquisition or divestiture and the amounts of any long-term liabilities, capital
leases, or bank financing, royalty or licensing fees arrangements of the
acquired entity and which are paid or assumed by the acquiring entity as part of
the purchase price for the acquisition.
As an inducement to THORNHILL or its assigns to enter into Agreement, the
Company will issue to THORNHILL, Options to purchase a total of 9.9% of the
outstanding shares as of April 30, 2002, of the Company's common stock,
("common"), exercisable until April 30, 2005, or such later date to which the
term of the per share Option may be extended pursuant to the terms hereof, $.75,
("Exercise Price"). By execution of this Agreement the Company agrees to execute
the Option Agreement on THORNHILL's approved form. For purposes of this Company
Common Stock Option, in the event the Company forms a subsidiary, or affiliate
which would be the successor to all or a majority of the Company's main core
business(es), or sell the company, THORNHILL or its assigns shall have the right
to exchange its Common Options of the Company for an identical equity percentage
(9.9%) of the issued and outstanding Common Stock of such subsidiary, affiliate
or parent company, as of the date of the initial issuance of Common Stock. The
number of shares subject to the Common Stock Option will be adjusted to reflect
any stock splits, stock dividends, recapitalization, etc. affecting the
Company's Common Stock.
4. The Company herein grants and warrants that any and all information supplied
hereunder to THORNHILL in connection with any and all services to be performed
hereunder by THORNHILL for and on behalf of the Company shall be true in all
material respects, as of the date of such dissemination and shall not fail to
state a material fact necessary to make any such information not misleading. The
Company hereby acknowledges that the ability of THORNHILL to adequately provide
investment banking and consulting services hereunder and/or to initiate and/or
to initiate and/or effectuate introductions on behalf of the Company with
respect to potential acquisition is dependent upon the prompt dissemination of
accurate, correct and complete information to THORNHILL. In addition, and
notwithstanding anything contained herein to the contrary, nothing hereunder
shall obligate THORNHILL to make any minimum number of introductions, or to
initiate any merger or acquisitions involving or relating to the Company. The
Company further represents and warrants hereunder that this Agreement and the
transactions contemplated hereunder, including the issuance of the Common Stock
Options hereunder, have been duly and validly authorized by all requisite
corporate action; that the Company has the full right, power and capacity to
execute, deliver and perform its obligations hereunder; and that this Agreement,
upon execution and delivery of the same by the Company, will represent the valid
and binding obligation of the Company enforceable in accordance with its terms.
The representations and warranties set forth herein shall survive the
termination of this Agreement.
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5. The Company hereby agrees to indemnify, defend and hold harmless THORNHILL,
its directors, officers, principals, employees, consultants, affiliates and
shareholders, and their successors and assigns from and against any and all
claims, damages, losses, liability, deficiencies, actions, suits, proceedings,
cost or legal expenses (collectively the "Losses") arising out of or resulting
from: (i) any breach of a representation or warranty by the Company contained in
the Agreement; or (ii) any activities or services provided hereunder by
THORNHILL at the request of the Company (which request is in writing in
connection with the negotiation of any merger, acquisition, joint venture or
capital financing), unless such losses were the result of the gross negligence,
intentional misconduct or gross misconduct of THORNHILL.
6. If THORNHILL receives written notice of the commencement of any legal action,
suit or proceeding with respect to which the Company is or may be obligated to
provide indemnification pursuant to Section 5 above, THORNHILL shall, within
thirty (30) days of the receipt of such written notice, give the Company written
notice thereof (a "Claim Notice"). Failure to give such Claim Notice within such
thirty (30) day period shall not constitute a waiver by THORNHILL of its right
to indemnity hereunder with respect to such action, suit or proceeding;
provided, however, if the Company is materially prejudiced as a result of such
failure to give Claim Notice, such failure shall constitute a waiver.
Upon receipt by the Company of a Claim Notice from THORNHILL with respect to any
claim for indemnification which is based upon a claim made by a third party
("Third Party Claim"), THORNHILL may assume the defense of the Third Party Claim
with counsel of its own choosing. The fees and expenses of such counsel shall be
paid as described below. The Company shall cooperate in the defense of the Third
Part Claim and shall furnish such records, information and testimony and attend
all such conferences, discovery, proceedings, hearings, trials and appeals as
may be reasonably required in connection therewith. THORNHILL shall have the
rights to employ its own counsel in any such action, but the fees and expenses
of such counsel shall be at the expense of THORNHILL unless the Company shall
not have promptly employed counsel to assume the defense of the Third Party
Claim, in which such fees and expenses shall be borne solely by the Company. The
Company shall not satisfy or settle any Third Party Claim for which
indemnification has been sought and is available hereunder, without the prior
written consent of THORNHILL which consent shall not be unreasonably withheld.
If the Company shall fail with reasonably promptness to defend such Third Party
Claim, THORNHILL may defend the Third Party Claim at the expense of the Company
and the Company shall pay to THORNHILL the amount of any such loss within ten
(10) days after written demand thereof provided THORNHILL shall not settle any
Third Party Claim without the prior written consent of the Company which consent
shall not be unreasonably withheld. The indemnification provisions hereunder
shall survive the termination of this Agreement.
7. No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is evidenced by a written instrument, executed by
party against which such modification, waiver, amendment, discharge, or change
is sought.
8. All notices demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person or
transmitted by facsimile transmission or the fifth calendar day after being
mailed by registered or certified mail, return receipt requested, postage
prepaid, to the addresses herein above first mentioned or to such other address
as any party hereto shall designate to the other for such purpose manner set
forth.
9. This Agreement contains all of the understanding and agreements of the
parties with respect to the subject matter discussed herein. All prior
agreements, whether written or oral, are merged herein and shall be of no force
or effect.
10. The invalidity, illegality or unenforceability of any provision or
provisions of this Agreement will not affect any other provision of this
Agreement, which will remain in full force and effect, nor will the invalidity,
illegality or enforceability or a portion of any provision of this Agreement
affect the balance of such provision. In the event that any or more of the
provisions contained in this Agreement or any portion thereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.
11. This agreement shall be construed in accordance with the laws if the State
of Florida, without application of the principles of conflicts of laws. If it
becomes necessary for any party to institute legal action to enforce the terms
and conditions of this Agreement, the successful party will be awarded
reasonable attorney's fees, expenses and costs. Any action or proceeding with
respect to this Agreement shall through binding arbitration of Palm Beach County
in the State of Florida. The parties hereto hereby accept this exclusive
jurisdiction for the purpose of any such arbitration proceeding as follows:
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(a) All disputes and differences arising in connection with or relating to the
provisions of this Agreement, including what constitutes a dispute or
difference, shall be settled and finally determined by arbitration unless
agreement in writing has been reached between the parties within thirty (3) days
after either party of the existence of a dispute or difference which it desires
to have arbitrated. Such notice shall state the point or points in dispute.
(b) Three (3) arbitrators shall conduct arbitration in accordance with the rules
of the American Arbitration Association, one or which shall be selected by
THORNHILL, one by The Company and a Chairman of Arbitration Court selected by
the two arbitrators so selected. The applicable law shall be as provided above.
Each party shall notify the other party of the arbitrator selected by it within
thirty (3) days of the giving of written notice referred above. In the event
that the two arbitrators selected by the parties are unable to reach agreement
as to the third arbitrator, the American Arbitration Association shall select
the third arbitrator. Arbitration shall be held in the jurisdiction stated
above. Each party shall be given the opportunity to present to the arbitrators
its evidence, witnesses and arguments. In the event one of the parties shall
fail, after reasonable advance notice, to appear and participate in the
arbitration proceedings as normally interpreted by the above-mentioned rules,
the arbitrators shall be entitled to make their decision and award on the basis
of evidence, witnesses and arguments presented by the party appearing.
(c) The decision and award of the arbitrators shall be in writing and shall be
final and binding upon the parties hereto. Judgment upon the award rendered may
be entered in any court having jurisdiction thereof, or application may be made
to such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. The expenses of arbitration shall be borne in
accordance with the determination of the arbitrators with respect thereto.
Pending decision by the arbitrators with respect to the dispute or difference
undergoing arbitration, all other obligations of the parties hereto shall
continue as stipulated herein. And all monies not directly involved in such
dispute or difference shall be paid when due.
THE PARTNERS HEREBY WAIVE ANY RIGHT TO A JURY IN
CONNECTION WITH ANY DISPUTE ARISING OUT OF THIS AGREEMENT.
12. The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties, and their respective successors and assigns.
13. This Agreement may be executed in any number of counterparts, including
facsimile signatures, which shall be deemed as original signatures. All executed
counterparts shall constitute one Agreement, notwithstanding that all
signatories are not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first above written.
METHOD PRODUCTS CORPORATIONS THORNHILL GROUP, INC.
By: By:
Mark Antonucci, President and CEO Laurence S. Isaacson, President and CEO
