1
EXHIBIT 10.53
[TYPED ON DOMINICK & DOMINICK LETTERHEAD]
October 15, 1996
Mr. Douglas J. Tullio
President & Chief Executive Officer
Alpha Microsystems
2722 South Fairview Street
Santa Ana, CA 92704
Dear Mr. Tullio:
You have requested that Dominick & Dominick, Incorporated ("Dominick") act as a
financial adviser for Alpha Microsystems ("ALMI"), on an on-going, non-exclusive
basis. We have had certain discussions concerning our role as ALMI's financial
advisor and, in this regard, we are pleased to confirm the following:
1. Dominick will act as a non-exclusive financial adviser for ALMI.
2. In its capacity as financial adviser, Dominick will be available to
advise ALMI on investment banking and other matters such as mergers,
acquisitions, potential public and private financings, bank borrowings,
licensing and other business arrangements.
3. As part of its on-going financial advisory relationship, Dominick will
be available to provide merger and acquisition advisory services for
ALMI. In the event ALMI uses Dominick's advisory services or sources
and (a) acquires substantial stock or assets of another entity
introduced by Dominick, or (b) another entity introduced by Dominick
acquires substantial stock or assets of ALMI, Dominick shall be
entitled to its normal merger and acquisition fee on such transaction.
That fee shall be 2.5% of the total value of the transaction.
Dominick's fee shall be payable in cash at the time of the consummation
of any such transaction.
4. As part of its financial advisory relationship, Dominick will seek, at
appropriate times, to introduce ALMI to sources that will consider
providing financing to ALMI. Should ALMI use those financing sources,
Dominick shall be entitled to its normal cash replacement fee on such
funds. Typical fees for obtaining bank financing are 1% of the fair
market value of consideration raised; for public or private debt
financing 5%; and for equity offerings 8%. Payments of financing
2
fees are to be made in cash at closing. Specific financing fees will be
covered in a separate agreement.
5. Fees described in paragraphs three and four herein shall be payable to
Dominick for any transactions described therein with any party or
entity introduced by Dominick to ALMI and with whom discussions were
held during the term of this engagement and which transaction is
consummated during the first six month period following the termination
of this engagement.
6. Dominick will receive reimbursement for all of its reasonable
out-of-pocket expenses incurred as a result of its activities for and
on behalf of ALMI, to be reimbursed within 30 days of invoice.
7. Dominick and/or its assigns will purchase for $200.00 a redeemable
warrant to purchase 300,000 common shares of ALMI immediately upon the
ALMI Board of Directors' approval of this agreement. The warrants are
exercisable at $3.00 per share, at any time, at the holder's option, in
whole or in part, prior to expiration. The expiration date for the
warrants is August 15, 2001. The warrants are subject to customary
anti-dilution provisions and holders of the warrant or any shares
received upon exercise of the warrant will have typical "piggy-back"
registration rights at any time ALMI files a registration statement.
8. ALMI will pay Dominick for its financial advisory services, over and
above any transaction consummation fees, a quarterly retainer fee of
$12,500, payable at the start of each quarterly period commencing on
January 1, 1997.
9. ALMI shall not issue any press release, statement, notice, document or
other instrument referring to or mentioning Dominick without Dominick's
prior written approval, except as required by law.
10. As Dominick will be acting on ALMI's behalf, ALMI agrees to indemnify
and hold harmless Dominick (including any affiliated companies and
respective officers, directors, employees and controlling persons) from
and against all claims, liabilities, losses, damages and expenses
(including reasonable expenses of counsel) as they are incurred in
connection with any proceeding, whether or not Dominick is a party,
relating to or arising out of such engagement or Dominick's role in
connection therewith. ALMI will not, however, be responsible for any
such claims, liabilities, losses, damages or expenses to the extent
that they result primarily from actions taken or omitted to be taken by
Dominick in bad faith or from its or their gross negligence. The
foregoing indemnification is effective immediately in respect of all
events occurring or omitted prior to or after the date hereof.
11. This agreement shall be governed by the laws of the State of New York.
3
12. This agreement supersedes the December 17, 1993 agreement between
Dominick and ALMI.
13. This agreement, excluding the warrant described in paragraph 7, may be
canceled by either ALMI or Dominick at any time by notification of
termination in writing.
We look forward to a long and mutually rewarding relationship and we are
confident that we can assist ALMI in various aspects of its business and its
intended growth.
Very truly yours,
DOMINICK & DOMINICK, INCORPORATED
By: /s/ JOHN F. DOSS
-------------------------------
Managing Director
The foregoing is agreed to and accepted:
ALPHA MICROSYSTEMS
By: /s/ MR. DOUGLAS J. TULLIO
--------------------------------------
President and Chief Executive Officer