EXHIBIT 10.38
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March 1, 2002
Mr. Xxxxx XxxXxxxxx
President and Chief Executive Officer
IVP Technology Corp.
0000 Xxxxxxxxx Xxxx. Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X0X0
Xxxxxx
Dear Xxxxx:
This letter agreement (the "Agreement") confirms the terms of the agreement that
we have reached in principal between IVP Technology Corp. ("IVP") and Danson
Partners, LLC ("Danson Partners").
1. RESPONSIBILITIES.
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(a) IVP hereby retains the services of Danson Partners to provide the
functions customarily provided by an independent Financial Advisor
of a company like IVP. Those functions are to include, but are not
limited to, oversight of IVP's financial affairs as requested by
IVP's President, strategic business and financial advice, assistance
in the preparation of budgets and cash management, engaging on
behalf of IVP and working with independent auditors in connection
with the preparation and filing of IVP's quarterly and annual SEC
filings, listing with internal accounting personnel, external SEC
counsel (Xxxx Xxxxxx) and Xxxxxxx Capital on financing and SEC
matters, the review and filing of the Registration Statement in
association with the financing provided by Cornell Capital Partners,
M&A advisory services in conjunction with identifying possible
target companies and proposed acquisitions by IVP and the financing
of such acquisitions, project management services, assistance in
arranging bank and other institutional debt equity financing, and if
necessary, arranging and attending meetings with various broker
dealers and retail equity institutions. Danson Partners shall
perform those services at the Company's office in Toronto or in New
York City or at such other place or places as may be necessary or
appropriate. Danson Partners shall commit the required number of
hours during each month to perform its duties. Without limiting the
foregoing, Danson Partners shall expend such resources, including
the necessary time of its employees, as may be necessary or
appropriate to perform the services contemplated by this agreement
in a professional and competent manner.
(b) IVP and the senior management of IVP shall cooperate with Danson
Partners as it carries out its responsibilities under this agreement
as shall Danson Partners with them. Without limiting the foregoing,
the senior management of IVP shall respond promptly to all requests
for information and assistance, which are reasonably requested by
Danson Partners, as shall Danson Partners to management's requests.
2. SERVICES OF XXXXX X. XXXXXX AND XXXXXX X. XXXXXX.
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Under the terms of this agreement Danson Partners shall make
available the services of Xxxxx X. Xxxxxx (Xxxxx) and Xxxxxx X.
Xxxxxx (Xxxxxx) to serve as Financial Advisors to IVP. In addition,
Danson Partners, if deemed necessary and appropriate, will call upon
the services of Xxxxx Xxxxxxxxx and other contracted professionals
to provide financial advisory services to IVP.
3. COMPENSATION.
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(a) In consideration for the services provided by Danson Partners to IVP
under this Agreement, IVP shall pay Danson Partners a monthly
retainer of US $10,000, of which US $2,500, is payable in restricted
shares of IVP. The cash retainer of US $7,500 is payable in advance
on the first of each calendar month for the period from March 1,
2002 through February 1, 2003.
All shares issued to Danson Partners under the terms of this
agreement will carry piggyback registration rights.
(b) The amount of restricted shares payable monthly to Danson Partners
shall be determined by dividing the closing trading price of IVP's
stock on the first business day of each month divided by US $2,500.
(c) The parties hereby agree that the fees under Section 3(a) above
shall be re-evaluated on the six month anniversary of the effective
date of this Agreement, in order to take into effect the time
commitment of Danson Partners and the results of Danson Partners'
services to IVP. At such time, such fees under Section 3(a) above
shall be increased or decreased as both parties mutually agree to.
In addition, both parties shall determine the nature and/or the
amount of any Incentive Fee that Danson Partners shall be entitled
to.
4. EXPENSES.
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In addition to the compensation payable pursuant to Section 3 above, IVP
shall pay or promptly reimburse Danson Partners for all out-of-pocket
expenses, which are reasonably incurred by Danson Partners in connection
with the performance of its duties, including (by way of example) all
travel expenses. To the extent such travel related expenses exceed $1,000,
at any time, such expenses shall be pre-approved either verbally or in
writing by the President. Danson Partners shall be responsible for its own
internal expenses including (by way of example) its employees' salaries
and overhead expenses, and Danson Partners shall not have any right to be
reimbursed for any of those expenses.
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5. TERM AND TERMINATION.
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(a) This agreement is effective, as of March 1, 2002. Danson Partners
shall provide the services identified in Section 1 above as the
Financial Advisor of IVP, pursuant to this agreement for the period
of twelve months from March 1, 2002 through February 28, 2003, with
a review period scheduled for the six-month anniversary of this
agreement. At such time on the discretion of both parties, time and
commitment levels will be evaluated and if deemed necessary the
retainer and agreement will be adjusted to accurately reflect the
efforts of either party.
(b) Danson Partners shall have the right to terminate those services at
any time prior to February 28, 2003 if there is any default by IVP
under this agreement (including without limitation any failure by
IVP to pay when due any amounts which are payable by IVP under this
agreement or any breach by IVP of Section 1(b) above) and that
default continues for a period of 30 days after Danson Partners
notifies IVP of that default.
(c) IVP shall have the right to terminate those services for cause at
any time prior to February 28, 2003 if there is any gross negligence
or willful default by Danson Partners in providing any of the
services under this agreement, in which case Danson Partners shall
receive its compensation through the date of termination.
(d) In addition to the provisions of section 5(c) above, IVP shall have
the right in its sole discretion (without cause) to terminate the
services of Danson Partners provided that notwithstanding such
termination IVP shall (1) continue to pay the compensation that is
required to be paid pursuant to section 3 above through the date
that is one (1) month after the date of such termination, and (2)
reimburse Danson Partners for all expenses contemplated by section 4
above for all work performed through the date of termination.
6. INDEMNIFICATION.
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(a) OBLIGATION TO INDEMNIFY. IVP shall, to the fullest extent permitted
by law, indemnify, defend and hold harmless each of Danson Partners
and its employees (each of which is an "INDEMNITEE") from and
against all costs, expenses (including attorneys' fees), judgments,
fines, taxes, penalties and amounts paid in settlement actually
incurred by the Indemnitee in connection with any threatened,
pending or completed claim, action suit, proceeding or arbitration,
whether civil, criminal, administrative or investigative, (any of
which are referred to here as a "CLAIM") made or asserted (in whole
or in part) by reason of the fact that the Indemnitee is the
Financial Advisor of IVP or by reason of the fact that the
Indemnitee serves or served in any capacity at the request of IVP
with or for any other corporation, partnership, joint venture,
limited liability company, trust, employee benefit plan or other
enterprise (collectively, an "OTHER ENTITY"), and including without
limitation any Claim which is by or in the name of IVP or any such
Other Entity. The Indemnitee shall be presumed to be entitled to
indemnification for any act or omission covered in this Section 6;
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the burden of proof of establishing that the Indemnitee is not
entitled to indemnification for any reason shall be on IVP and must
be demonstrated by clear and convincing evidence.
IVP also agrees that none of the Indemnities shall have liability
(whether direct or indirect in contract or tort or otherwise) to IVP
or to any person claiming through IVP in connection with the
engagement of Danson Partners pursuant to this letter agreement, or
the services performed by Danson Partners in connection therewith,
except for any liability for such losses, claims, damages or
expenses incurred by IVP that result directly from Danson Partners
gross negligence or willful misconduct under circumstances where
Danson Partners' act or failure to act was not specifically
requested or consented to by IVP. In no event, however, shall the
liability of Danson Partners and the Indemnities to IVP in
connection with any claim arising out of this engagement exceed the
amount of fees actually received by Danson Partners hereunder.
(b) ADVANCE OF EXPENSES. If there occurs any Claim against an Indemnitee
which may give rise to a right of indemnification under this
Agreement, IVP shall advance to that Indemnitee the amounts needed
to pay the expenses (including legal fees) incurred by that
Indemnitee in defending any such Claim in advance of the final
disposition of that Claim. The Indemnitee's written certification,
together with a copy of an expense statement paid or to be paid by
the Indemnitee, shall constitute satisfactory evidence as to the
amount of those expenses.
(c) NOTICE OF CLAIM. An Indemnitee shall notify IVP in writing of any
matter with respect to which that Indemnitee intends to seek
indemnification under this Agreement as soon as reasonably
practicable following the receipt by that Indemnitee of any written
threat of that matter; provided, however, that the failure to so
notify IVP shall not constitute a waiver by that Indemnitee of his
or its rights under this Agreement.
(d) SETTLEMENT. IVP shall not settle any action or claim in any manner
which would impose any penalty, obligation or limitation on an
Indemnitee without that Indemnitee's prior written consent. IVP
shall not be liable to indemnify an Indemnitee under this Agreement
for any amounts paid in settlement of any action or claim effected
without IVP's prior written consent. Neither IVP nor any Indemnitee
shall unreasonably withhold his or its consent to any proposed
settlement.
(e) NON-EXCLUSIVITY. The indemnification rights granted to each
Indemnitee under this Agreement shall not be deemed exclusive of, or
in limitation of, any other rights to which that Indemnitee may be
entitled under applicable law against IVP, against any Other Entity,
or under any directors and officers liability insurance policy (or
other insurance policy) which may be procured by IVP or any Other
Entity.
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7. INDEPENDENT CONTRACTOR.
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Danson Partners is an independent contractor of IVP. IVP
specifically acknowledges that Danson Partners is involved in a
variety of business activities for its own account and for the
account of clients other than IVP, and IVP agrees that Danson
Partners may engage independently and with others in other business
ventures, including without limitation providing consulting or other
services for others and investing in other companies, businesses and
assets. Nothing in this agreement shall be deemed to prohibit Danson
Partners form engaging or investing in other businesses or
activities and being compensated for that work, as long as those
other activities and businesses do not interfere with or impair the
services rendered by Danson Partners under this agreement.
* * * * * *
I would appreciate if you could confirm these arrangements by signing and
returning to me the enclosed copy of this letter, whereupon this letter will
become a binding agreement between IVP and Danson Partners.
Very truly yours,
DANSON PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Managing Director
ACCEPTED AND AGREED TO:
IVP TECHNOLOGY CORP.
By: /s/ Xxxxx XxxXxxxxx March 21/02
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Xxxxx XxxXxxxxx Date
President and Chief Executive Officer
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