Exhibit 10.23
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into on the 15th day of Feb
2000 (the "Effective Date") between EarlyBirdCapital Inc. ("Earlybird" or the
"Consultant") and XxxXxxxxxx.xxx, Inc. (the "Company").
In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. The Company hereby engages Consultant for the term
specified in Paragraph 2 hereof to render financial consulting and investment
banking advice to the Company upon the terms and conditions set forth herein.
2. This Agreement shall commence on Feb 15, 2000 and continue
for a term of 24 months, provided, however, that the Company may terminate this
agreement at the end of one year upon 30 days prior written notice given to
EarlyBird.
3. During the term of this Agreement, Consultant and
Consultant's affiliates shall provide the Company with such regular and
customary financial consulting advice as is reasonably requested by the Company,
provided that Consultant shall not be required to undertake duties not
reasonably within the scope of this Agreement. It is understood and acknowledged
by the parties that the value of Consultant's advice is not readily
quantifiable, and that although Consultant shall be obligated to render the
advice contemplated by this Agreement upon the reasonable request of the
Company, in good faith, Consultant shall not be obligated to spend any specific
amount of time in so doing. Consultant's duties may include, but will not
necessarily be limited to, providing recommendations concerning the following
financial and related matters:
(a) Rendering advice with regard to regard to internal
operations, including:
(i) the formation of corporate goals and their
implementation;
(ii) the Company's financial structure and its divisions
or subsidiaries;
(iii) securing, when and if necessary and possible,
additional financing through banks and/or insurance
companies; and
(iv) corporate organization and personnel; and
(b) Rendering advice with regard to any of the following
corporate finance matters:
(i) changes in the capitalization of the Company;
(ii) changes in the Company's corporate structure;
(iii) redistribution of shareholdings of the Company's
stock;
(iv) offerings of securities in public and private
transactions;
(v) alternative uses of corporate assets;
(vi) structure and use of debt; and
(vii) sales of stock by insiders pursuant to Rule 144 or
otherwise.
"Consultant" and "Earlybird" as used herein shall also mean
and refer to any of Consultant's affiliates rendering services here under.
"The Company and TeKInsight" as used herein shall also mean
and refer to any of its subsidiaries or affiliates.
In addition to the foregoing, Consultant agrees to furnish
advice to the Company in connection with (A) the acquisition of and/or merger
with other companies, the sale of the Company itself, or any of its assets,
subsidiaries or affiliates, or similar type of transaction (hereinafter referred
to as a "Transaction"), and (B) financings from financial institutions,
including but not limited to lines of credit, performance bonds, letters of
credit, loans or other financings (hereinafter referred to as a "Bank
Financing").
Consultant shall also render such other financial consulting
and/or investment banking services as may from time to time be agreed upon by
Consultant and the Company.
4. The Company shall pay Consultant the following
compensation:
(a) an annual fee of $90,000 in monthly installments of
$7,500, the first payment due upon
the execution of this Agreement;
(b) upon execution of this Agreement, the Company is issuing
to Earlybird (or its designees) warrants ('Warrants") to purchase 300,000 shares
of the Company's Common Stock, exercisable for a period of five years commencing
from the date of this agreement with respect to 200,000 shares and thirteen
months from the date hereof with respect to 100,000 shares, at an exercise price
equal to the average closing bid price of the Company's common stock over the 5
business day period prior to the date of this agreement. If the Company
terminates this Agreement after 12 months in accordance with paragraph 2 hereof,
the Company may, in its sole discretion, cancel 100,000 of the Warrants that
have been issued. The Warrants are evidenced by a warrant agreement(s) in the
form of Exhibit A hereto.
In addition to the Warrants referred to in paragraph 4(b) the
Company agrees to issue to EarlyBirdCapital or its designees Warrants to
purchase 100,000 shares in each subsidiary of the company created during the
term of this agreement at an exercise price of $1.00 per share. The Warrants
shall have an exercise period of five years from the date of issuance and are
not subject to cancellation. The Warrants shall be in a form substantially
similar to the Warrant in the form of Exhibit A hereto.
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5. In addition to the above,
(a) In the event Consultant directly or indirectly originates
a Bank Financing, the Company and Consultant will mutually agree on a
satisfactory fee.
(b) If Consultant acts as an underwriter, placement agent or
advisor in the sale or distribution of securities by the Company to the public
or in a private transaction (an "Offering"), Consultant shall receive, as
compensation for services rendered, an amount to be mutually agreed upon.
(c) Fees and expenses payable to Consultant with regard to
fairness opinions and valuations will be determined by mutual agreement at such
time as the nature and terms of such opinions and valuations are affirmed.
All fees to be paid pursuant to this paragraph 5, except as
otherwise agreed in writing, are due and payable to Consultant in cash at the
closing or closings of any transaction. In the event that this Agreement shall
not be renewed, or if this Agreement is terminated for any reason, then
notwithstanding any such non-renewal or termination, Consultant shall be
entitled to receive the full fee provided for hereunder for any transaction
taking place within 24 months of the date hereof for which the discussions or
introductions were initiated during the term of this Agreement.
6. In addition to the fees payable hereunder, and regardless
of whether any transaction set forth in Paragraph 5 is proposed or consummated,
the Company shall reimburse Consultant for all reasonable travel and
out-of-pocket expenses incurred in connection with the services performed by
Consultant pursuant to this Agreement, promptly after submission to the Company
of appropriate evidence of such expenditures. All such expenditures in excess of
$500 will be submitted to the Company for approval in advance.
7. (a) 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 manner or for any purpose, nor may the
Company make any public references to Consultant, or use the Consultant's name
in any annual reports or any other reports or releases of the Company, without
Consultant's prior written consent.
(b) The Company acknowledges that Consultant makes no
commitment to make a market in the Company's securities, to recommend or advise
its clients to purchase the Company's securities, or to prepare research or
corporate finance reports.
8. Consultant will hold in confidence any confidential
information which the Company provides to Consultant pursuant to this Agreement
which is designated by an appropriate stamp or legend as being confidential.
Notwithstanding the foregoing, Consultant shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of the
public domain not due to the breach of this Agreement by Consultant; (ii) of
which it had independent knowledge prior to disclosure; (iii) which comes into
the possession of
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Consultant 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 Consultant by laws, rules or regulators. If Consultant is requested or
required to disclose any confidential information supplied to it by the Company,
Consultant shall, unless prohibited by law, promptly notify the Company of such
request(s) so that the Company may seek an appropriate protective order.
9. The Company acknowledges that Consultant or its affiliates
are in the business of providing financial services and consulting advice to
others. Nothing herein contained shall be construed to limit or restrict
Consultant in conducting such business with others, or in rendering such advice
to others.
10. The Company recognizes and confirms that, in advising the
Company hereunder, Consultant will use and rely on data, material and other
information furnished to Consultant by the Company, without independently
verifying the accuracy, completeness or veracity of same.
11. The Company agrees to indemnify and hold harmless
Earlybird, its employees, agents, representatives and controlling persons from
and against any and all losses, claims, damages, liabilities, suits, actions,
proceedings, costs and expenses (collectively, "Damages"), including, without
limitation, reasonable attorney fees and expenses, as and when incurred, if such
Damages were directly or indirectly caused by, relating to, based upon or
arising out of the rendering by Earlybird of services pursuant to this
Agreement, so long as Earlybird shall not have engaged in intentional or willful
misconduct, or shall have acted grossly negligently, in connection with the
services provided which form the basis of the claim for indemnification;
provided, however, that (a) the Company receives prompt written notification of
any claim for which it is being requested to provide indemnification pursuant to
this Section, (b) the Company may assume, in a prompt fashion, sole control of
the defense or settlement of such a claim, including the right to choose counsel
for such defense or settlement, provided, however, that in the event that
counsel chosen by Company has a conflict of interest in defending Consultant,
Consultant may at the Company's expense choose its own counsel and (c) the
Company receives, at its expense, such reasonable assistance from Consultant as
the Company may request. In the event that the Company assumes sole control of
the defense or settlement of such claim, Consultant may, at its expense,
participate in such defense or settlement. This paragraph shall survive the
termination of this Agreement.
12. Consultant shall perform its services hereunder as an
independent contractor and not as an employee or agent of the Company or any
affiliate thereof. Consultant shall have no authority to act for, represent or
bind the Company or any affiliate thereof in any manner, except as may be
expressly agreed to by the Company in writing from time to time.
13. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. No provision of this
Agreement may be amended, modified or waived, except in writing signed by both
parties. This Agreement shall be binding upon and inure to the benefit of each
of the parties and their respective successors, legal representatives and
assigns. This Agreement may be executed in counterparts. In the event of any
dispute under this Agreement, then and in such event, each party agrees that the
same shall be submitted to the American Arbitration Association ("AAA") in the
City of New York or nearest city, for its
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decision and determination in accordance with its rules and regulations then in
effect. Each of the parties agrees that the decision and/or award made by the
AAA may be entered as judgment of the Courts of the State of New York, and shall
be enforceable as such. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
EarlyBirdCapital Inc. Xxxxxxxxxx.xxx, Inc.
By:/s/Xxxxxx X. Xxxxxx By:/s/Xxxxxxxxx Xxxxxxxx
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Title: Executive Vice President Title:Chief Technology Officer and Chairman
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