EXHIBIT 10.26
ADVISORY AGREEMENT
Agreement made and entered into as of the 25th day of January, 2000, by
and between IFS INTERNATIONAL, INC., a corporation organized under the laws of
the State of Delaware with offices at Rensselaer Technology Park, 000 Xxxxxx
Xxxx, Xxxx, XX 00000 (the "Company"), and COMMONWEALTH ASSOCIATES L.P., a New
York limited partnership having offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Advisor").
W I T N E S S E T H :
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WHEREAS, the Company desires to retain the Advisor and the Advisor
desires to be retained by the Company, all pursuant to the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, it is agreed as follows:
1. Retention. The Company hereby retains the Advisor to perform
certain strategic advisory services related to corporate finance and other
financial service matters, and the Advisor hereby accepts such retention.
In this regard, Advisor shall devote such business time and attention to
matters as it deems necessary, and the performance of the Advisor's
services hereunder shall be conditioned upon the availability of its
employees at any particular time.
2. Term. The Advisor's retention hereunder shall be for a term of 4
months commencing on the date first above written (the "Term"), renewable
at the mutual discretion of the Company and the Advisor.
3. Compensation.
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(a) As compensation for the services to be rendered hereunder,
the Advisor shall receive a fee of $10,000 upon the execution of this
Agreement, as an advance against the expenses as described in section
3 (b), and an additional monthly retainer fee of $7,500 payable at the
beginning of each month following the execution of this Agreement.
(b) The Company shall pay such reasonable expenses as shall be
incurred by the officers and employees of the Advisor in connection
with the discharge of its duties hereunder, including travel and
entertainment, but not including expenses relating to the Advisor's
office operations, not to exceed $35,000, unless formerly agreed to by
the Company; such payment to be made upon presentation by the Advisor
of the details of, and vouchers for, such expenses.
(c) The Advisor shall receive seven-year warrants to purchase
850,000 shares of the Company's Common Stock (250,000 at $2.00 per
share, 350,000 at $2.50 per share and 250,000 at $3.50 per share) upon
signing of this Agreement, based on a current capitalization of
approximately 9,433,412 common shares fully diluted outstanding. The
warrants shall be issued in the names and denominations requested by
the Advisor.
4. Future Transactions. The Company agrees that the Advisor may act as
a finder or financial consultant for the Company. The Company hereby agrees
that in the event that the Advisor, or a disclosed agent, representative or
other designee of the Advisor, shall either identify or introduce any
person or entity to the Company which consummates a Covered Transaction
with the Company or the Advisor assists the Company in evaluating a Covered
Transaction, then the Company shall pay to the Advisor a fee of 5% of the
Total Consideration in a transaction described in sections (i) and (iii)
below, and 10% of the Total Consideration paid in a transaction as
described in section (ii) below, plus warrants to purchase 20% of any
securities issued in such transaction at the same price and terms of such
transaction. A Covered Transaction shall include: (i) any sale or
acquisition of more than 20% of the assets of any company; (ii) any sale of
debt or equity securities of the Company or other corporate finance
transaction; and (iii) any merger, joint venture or other business
combination. Provided however, if such Covered Transaction is with Key
Corporation, Xxxxx Enterprises, ACI/TSAI, Synaps or Euronet/Arksys, then
the Advisor shall be entitled to receive a fee equal to 2% of the Total
Consideration.
For purposes of this Agreement, "Total Consideration" shall mean the total
value of all cash, securities, or other property paid at the closing of a
Covered Transaction (or to be paid in the future) either to the Company or
its shareholders or by the Company and its shareholders with respect to
such Covered Transaction, including, without limitation, consideration paid
in respect of (i) the assets of the acquired company, (ii) the capital
stock of the acquired company (and any securities convertible into options,
warrants or other rights to acquire such capital stock) and (iii) the
assumption, directly or indirectly (by operation of law or otherwise), of
any long-term liabilities of the acquired company or repayment of
indebtedness, including without limitation, indebtedness secured by the
assets of the acquired company. In the event a Covered Transaction is
consummated in one or more steps, including without limitation, any
additional consideration paid or to be paid in any subsequent step as set
forth above, such additional consideration shall be included in the
definition of "Total Consideration".
5. Liability and Indemnification.
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(a) The Advisor shall not be subject to liability to the Company
or to any officer, director, employee, shareholder, affiliate or
creditor of the Company by virtue of any act or omission in the course
of or connected with the rendering or providing of advisory services
hereunder, except for acts of willful misconduct, bad faith or gross
negligence by the Advisor.
(b) Subject to the provisions of Section 3(b) of this Agreement,
the Company hereby agrees to defend, indemnify and hold harmless the
Advisor from and against any and all costs, expenses, and liabilities
(including reasonable attorneys' fees) arising from services rendered
by the Advisor pursuant to or in connection with this Agreement,
except for acts of willful misconduct, bad faith or gross negligence
by the Advisor.
6. Termination. The Company may not terminate this Agreement before 4
months after the execution of this Agreement. Thereafter, the Company may
terminate this Agreement upon three days prior written notice to the
Advisor; provided, however, that notwithstanding any such termination, the
Advisor will be entitled to its full fee under Section 3 and 4 hereof in
the event that at any time prior to the expiration of 18 months after such
termination, a Covered Transaction is consummated with any party either
identified by the Advisor or introduced to the Company by the Advisor or
who engaged in any discussions with the Advisor or who the Advisor has
assisted the Company in evaluating during the term of this Agreement.
7. Notices. Any notices hereunder shall be sent to the Company and the
Advisor at their respective addresses above set forth. 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. Any 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 herein
provided.
8. 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 without regard to provisions regarding choice of laws.
9. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof, may not be
altered or modified, except in writing and signed by the party to be
charged thereby and supersedes any and all previous agreements between the
parties with respect to the subject matter hereof.
10. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective heirs, administrators, successors and assigns.
11. Press Release. The Company shall not issue any press release or
other information which pertains to or references to the Advisor without
the prior written consent of the Advisor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
COMMONWEALTH ASSOCIATES L.P.
By: Commonwealth Associates Management Corp., its
general partner
By:
Name:
Title:
IFS International, Inc.
By:
Name:
Title:
