EXHIBIT 10.10
August 17, 2004
Xxxxxxx Xxxxxxxxxx, COO
IVI Communications, Inc.
0000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Dear Charlie:
This Advisory Agreement ("Agreement") defines the scope of services to be
provided by Xxxxxx Xxxx Financial Group, LLC, and/or Xxxxxx Xxxx Securities,
LLC, a NASD registered Broker/Dealer, (hereinafter collectively "Xxxxxx Xxxx"),
to IVI Communications, Inc. (the "Company"), listed on the OTC Pink Sheets as
XXXX.XX, as well as the compensation to be paid by the Company to Xxxxxx Xxxx in
exchange.
1.0 ENGAGEMENT.
1.1 ADVISORY SERVICES. Xxxxxx Xxxx will provide non-exclusive advisory services
to the Company in the area of corporate finance and/or capital placement
transactions. Xxxxxx Xxxx will also introduce other firms, products and services
to the Company as needed during the normal course of business. It is also
understood that Xxxxxx Xxxx is acting as an advisor only, and shall have no
authority to enter into any commitments on the Company's behalf, or to negotiate
the terms of any transaction, or to hold any funds or securities in connection
with any transaction or to perform any other acts on behalf of the Company
without the Company's express written consent.
1.2 TRANSACTIONS. During the course of the Engagement Period, it is anticipated
that the Company will choose to execute one or more corporate development,
corporate finance and/or capital placement transactions. Xxxxxx Xxxx will assist
the Company in executing these transactions on a best efforts basis, on terms
satisfactory to the Company. Xxxxxx Xxxx will act as exclusive advisor and/or
placement agent only on those transactions defined as "Equity Exchange
Investment" in Section 3.1 below.
2.0 ENGAGEMENT TERMS.
2.1 PERIOD. The period of Xxxxxx Xxxx'x engagement (the "Engagement Period")
will expire upon the earlier to occur of (i) 12twelve (12) months from the date
we receive an executed copy of the Agreement from the Company or (ii) the mutual
written agreement of the Company and Xxxxxx Xxxx. The Engagement Period shall be
extended for additional six (6) month periods under the same terms and
conditions as described herein, unless otherwise terminated by either party by
written notice of the Company or Xxxxxx Xxxx. Notwithstanding the foregoing,
Xxxxxx Xxxx may, at its sole option, terminate its obligation hereunder at any
time without liability if, in the reasonable opinion of Xxxxxx Xxxx, a change
has occurred in the Company's financial condition, results of operations,
properties, business prospects or the composition of the Company's management or
Board of Directors, which, in Xxxxxx Xxxx'x sole determination, has adversely
affected the Company's business.
2.2 NON-EXCLUSIVITY. The Company engages Xxxxxx Xxxx on a non-exclusive basis.
The Company shall be permitted to engage any other firm or person as an
investment banker or other professional intermediary for the duration of the
Engagement Period. Notwithstanding any other provisions of this Agreement, if at
any time during the twelve (12) month period following the end of the Engagement
Period the Company, its advisors, officers, directors, affiliates, subsidiaries
and/or related companies, completes any transaction, including those as defined
in Section 3.1 as "Equity Exchange Investment" with any party or potential party
introduced by Xxxxxx Xxxx, or an affiliate of any such entity, or who became
known to the Company from any Xxxxxx Xxxx source during the Engagement Period,
upon the closing of any such transaction (a "Closing") Xxxxxx Xxxx will be paid
the compensation which would be due under Section 3.0 hereof.
3.0 COMPENSATION.
Xxxxxx Xxxx shall receive compensation as follows:
3.1 EQUITY EXCHANGE INVESTMENT. For any equity investment into the Company made
by way of a share exchange or "swap", including any common stock, preferred
stock, convertible preferred stock, convertible debentures, subordinated debt
with warrants or any other securities convertible into common stock, or any
other form of debt instrument involving any other form of equity participation,
whereby the Company receives consideration in the form of securities rather than
cash, Xxxxxx Xxxx shall receive upon Closing: (i) a success fee, payable in the
same securities received by the Company as consideration, equal to five percent
(85%) of the gross amount of securities consideration to be disbursed to the
Company from such Closing including any deferred amounts held in escrow or
otherwise pending performance by the Company ("Incoming Consideration Success
Fee"), plus (ii) an additional success fee, payable in the same securities
issued by and in the Company as consideration to the finance source for the
securities received, equal to five percent (85%) of the gross amount of
securities consideration to be issued to the finance source from such Closing
("Outgoing Consideration Success Fee"). The Company agrees to contract directly
with The Research Works, Inc. under its standard terms and conditions, for
equity analyst coverage, in a separate agreement.
3.2 EQUITY CASH INVESTMENT. For any cash equity investment into the Company,
including any common stock, preferred stock, convertible preferred stock,
convertible debentures, subordinated debt with warrants or any other securities
convertible into common stock, or any other form of debt instrument involving
any other form of equity participation, Xxxxxx Xxxx shall receive upon Closing:
(i) a success fee, payable in cash, equal to eightten percent (810%) of the
gross cash amount to be disbursed to the Company from such Closing, plus (ii)
warrants in the entity financed, with a cashless exercise provision, equal to
eightten percent (810%) of the gross amount to be disbursed to the Company from
such Closing, exercisable at a strike price equal to one hundred percent (100%)
of the fair market value price of the common stock for the Company as of the
date the Company receives the funds, in whole or in part, at any time within
five (5) years from issuance.
4.0 OTHER.
4.1 OFFERING MATERIALS. Xxxxxx Xxxx will use no offering materials other than
such materials prepared and/or approved by the Company and approved by Company's
counsel. The Company agrees to use its best efforts to approve and/or prepare,
as necessary, any offering materials within thirty (30) days from the date the
Company advises Xxxxxx Xxxx that it intends to execute a financial transaction,
in accordance with Section 1.2 hereof.
4.2 CLOSING. Xxxxxx Xxxx will assist with the Closing of any transaction or
financing which will occur through an escrow agent reasonably acceptable to the
Company and Xxxxxx Xxxx. The cost of such escrow will be that of the Company.
Compensation to Xxxxxx Xxxx is due when the transaction is completed and
offering proceeds are first disbursed for use by the Company. It is agreed that
the escrow agent shall directly distribute to Xxxxxx Xxxx and or Xxxxxx Xxxx'x
designees the Success Fees due.
4.3 CONFIDENTIALITY. This Agreement is for the confidential use of the Company
and Xxxxxx Xxxx only and may not be disclosed by the Company to any person other
than its attorneys, accountants and financial advisors, and only on a
confidential basis in connection with the proposed transaction or financing,
except where disclosure is required by law or is mutually consented to in
writing by Xxxxxx Xxxx and the Company.
4.4 DISCLOSURE. During the Engagement Period and for sixty (60) days thereafter,
the Company agrees not to issue any press releases or communications to the
public relating to the transactions or financings without Xxxxxx Xxxx'x prior
approval or unless otherwise required by law, which will not be unreasonably
withheld or delayed, and the Company agrees that such press release will state
that the transaction and/or financing was arranged by Xxxxxx Xxxx, unless we
mutually agree otherwise or unless otherwise required by law. The Company
further agrees that Xxxxxx Xxxx may, at its own expense, publicize its services
to the Company hereunder including, without limitation, issuing press releases,
placing advertisements and referring to the transaction or financing on Xxxxxx
Xxxx'x website.
4.5 PERFORMANCE. Notwithstanding any other provision of this Agreement, nothing
set forth herein shall be construed as a firm commitment to execute any
transaction or place the full amount of any offering or any minimum portion
thereof. Xxxxxx Xxxx cannot guarantee the successful conclusion of any
transaction, for which the Company has the right to reject, for any reason, in
its sole and absolute discretion.
4.6 REGISTRATION. In the event the Company undertakes a public offering or
registration of its securities, the Company hereby grants Xxxxxx Xxxx
"piggyback" registration rights for the stock of the Company as well as any
underlying warrants issued as part of the Success Fee to Xxxxxx Xxxx as
described herein.
4.7 INDEMNIFICATION. The Company shall indemnify and hold harmless Xxxxxx Xxxx
from and against all claims, damages, losses and liabilities (including, without
limitation, reasonable attorneys' fees and expenses) arising out of or based
upon (i) any misstatement or omission or alleged misstatement or omission, in
any Company documentation or any other materials or information supplied or
approved by the Company which are disseminated by Xxxxxx Xxxx to third parties,
including financing sources, or (ii) any agreement between the Company and any
financing source; except that the Company shall not be liable for any claim
damage, loss or liability which is finally determined by arbitration as
described in Paragraph 4.8 below to have resulted from Xxxxxx Xxxx'x fraud,
gross negligence or wilful misconduct. In any action where the Company's
indemnity applies, Xxxxxx Xxxx shall be entitled to its own separate counsel at
the Company's expense. Neither termination nor completion of this Agreement
shall affect these indemnification provisions, which shall survive any such
termination or completion and remain operative and in full force and effect.
4.8 GOVERNING LAW / ARBITRATION. The terms of this Agreement will be governed by
and interpreted in accordance with the internal laws of the State of
ArizonaCalifornia, without regard to the principles of conflict of laws. Any
controversy, dispute or claim between the parties relating to this Agreement
shall be resolved by binding arbitration in MaricopaOrange County, California in
accordance with the rules of the American Arbitration Association. The parties
agree that in the event that any controversy, dispute or claim between the
parties relating to this Agreement is resolved by binding arbitration, the
prevailing party, if any, as determined by the arbitrator's award, shall be
entitled to reimbursement of all expenses incurred in the arbitration including
reasonable attorneys' fees, provided that in no event shall the arbitrator have
the authority to award punitive damages. Judgment on the award may be entered in
any court having jurisdiction over the award.
4.9 NO SHAREHOLDER RIGHTS. The Company acknowledges and agrees that Xxxxxx Xxxx
has been retained only by the Company, and that the Company's engagement of
Xxxxxx Xxxx is not deemed to be on behalf of and is not intended to confer
rights upon any shareholder, member, owner or partner of the Company, or any
other person not a party hereto. Unless otherwise expressly agreed, no person or
entity other than the Company is authorized to rely upon the Company's
engagement of Xxxxxx Xxxx or any statements, advice, opinions, or conduct by
Xxxxxx Xxxx.
4.10 SUCCESSORS AND ASSIGNS. This Agreement is binding on all successors and
assigns. However, it shall not be assigned without the prior written consent of
the other party.
4.11 MISCELLANEOUS. The Company undertakes and represents to Xxxxxx Xxxx that
the number of shares necessary to fulfill any offerings will be available at
Closing; that the number of shares of common stock underlying the shares will be
available upon each conversion of the shares; that the shares of common stock
underlying the warrants will be available upon exercise of the warrants; and
that the Company will comply in all respects with the terms of each purchase
agreement and registration rights agreement entered into with the purchasers of
the shares.
If the foregoing is acceptable, please sign and return to Xxxxxx Xxxx a copy of
this Agreement. This Agreement shall represent the entire agreement between us
with respect to the matters addressed herein. We look forward to working with
you and remain,
Yours very truly,
Xxxxxx Xxxx Financial Group, LLC IVI Communications, Inc.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------- ----------------------------
By: Xxxx X. Xxxxx By: Xxxxxxx Xxxxxxxxxx
President COO
Date: 9/10/04
Xxxxxx Xxxx Securities, LLC
/s/ Xxxx X. Xxxxx
--------------------
By: Xxxx X. Xxxxx
President
