EXHIBIT 10.23
FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the ____ day of
_________, 1998 between Network 1 Financial Securities, Inc., a Texas
corporation (sometimes referred to as "Network 1" and sometimes referred to
as the "Consultant') and AyurCore, Inc., a Delaware corporation (the
"Company").
In consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Purpose: The Company hereby engages Network 1 for the term
specified in Paragraph 2 hereof to render advice to the Company as an
investment banker relating to financial and similar matters upon the terms
and conditions set forth herein.
2. Term: Except as otherwise specified in Paragraph 4 hereof, this
Agreement shall be effective from the Closing Date, as defined in the
Underwriting Agreement of even date between Network 1 and the Company, and
for twenty-four (24) months thereafter.
3. Duties of Network 1: During the term of this Agreement, Network 1
shall, upon the request of the Company, provide the Company with corporate
finance and related financial advisory services, advice with corporate
finance and related financial advisory services, advice with respect to
potential acquisitions and other business transactions and
advice with respect to stockholder relations matters. All obligations of the
Consultant contained herein shall be subject to the Consultant's availability
to perform such services and the amount of notice received from the Company.
The Consultant shall devote such time and effort to the performance of its
duties hereunder as the Consultant shall determine is reasonably necessary.
The Consultant may look to such others for such factual information,
investment recommendations, economic advice and/or research, upon which to
base its advice to the Company hereunder, as it shall deem appropriate. The
Company recognizes that Network 1 now renders and may continue to render
financial and other advisory services to other individuals and entities which
may or may not conduct activities similar to those of the Company and
acknowledges that Network 1 shall be free to render such advice and to
perform such services for these and other individuals and entities.
4. Compensation:
4.1 In consideration for the services rendered by Network 1
to the Company pursuant to this Agreement (and in addition to the expenses
provided for in Paragraph 5 hereof) the Company shall pay Network 1 a
non-refundable fee of One-Hundred and Twenty-Thousand ($120,000.00) Dollars,
payable in advance, upon the execution of this Agreement. This fee represents
a monthly fee of Five-Thousand ($5,000.00) Dollars throughout the term of
this Agreement. In addition, if any Transaction (as defined below) occurs
during the term of this
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Agreement or within twelve months thereafter, the Company shall pay fees to
Network1 as follows:
Consideration Fee
------------- ---
First $1,000,000 5% of First $1,000,000
Second $1,000,000 4% of Second $1,000,000
Third $1,000,000 3% of Third $1,000,000
Fourth $1,000,000 2% of Fourth $1,000,000
Consideration in excess 1% of Consideration in
of the fourth $1,000,000 excess of fourth $1,000,000
For purposes of this Agreement, a "Transaction" shall mean (i) any
transaction originated by Network 1, other than in the ordinary course of
trade or business of the Company, whereby, directly of indirectly, control
of, or a material interest in, the Company and its subsidiaries or the
business or assets of the Company and its subsidiaries, is transferred for
Consideration, or (ii) any transaction originated by Network 1 whereby the
Company acquires any other company, or the assets of any other company or an
interest in any other company; and "Consideration" shall mean the total
market values on the day of the closing of stock, cash, assets and all other
property (real or personal) exchanged or received, directly or indirectly by
the Company or any of its security holders in connection with any
Transaction. Any co-broker retained by Network 1 shall be paid by Network 1.
All Transaction fees to be paid pursuant to this Agreement, except as
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otherwise specified, are due and payable to Network 1 in cash at the closing
or closings of a Transaction. In the event that this Agreement shall not be
renewed or is terminated for any reason, notwithstanding any such non-renewal
or termination, Network 1 shall be entitled to the entire fee provided in
this Paragraph 4, for any Transaction for which the discussions were
initiated during the term of this Agreement and which is consummated within a
period of twelve months after non-renewal or termination of this Agreement.
Nothing herein shall impose any obligation on the part of the Company to
enter into any Transaction.
4.2 In the event Network 1 originates a line of credit with
a lender or a corporate partner, the Company and Network 1 will mutually
agree on a satisfactory fee and the terms of payment of such fee. In the
event Network 1 introduces the Company to a joint venture partner or customer
and sales develop as a result of the introduction, the Company agrees to pay
a fee to Network 1 of five (5%) percent of total sales generated directly
from this introduction during the first two years following the date of the
first sale. Total sales shall mean gross receipts less any applicable
refunds, returns, allowances, credits, taxes and shipping charges and monies
paid by the Company by way of settlement or judgment arising out of claims
made by or threatened against the Company. Commission payments shall be paid
on the 15th day of each third month following the receipt of customers'
payments. In the event any adjustments are made to the total sales after the
commission has been paid, the Company shall be entitled to an appropriate
refund or credit against future payments under this Agreement.
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4.3 All fees to be paid pursuant to this Agreement, except
as otherwise specified, are due and payable to Network 1 in cash or company
check at the closing or closings of any Transaction specified in Paragraph 4.
In the event that this Agreement shall not be renewed or if terminated for
any reason, notwithstanding any such non-renewal or termination, Network 1
shall be entitled to a full fee as provided under Paragraphs 4 and 5 hereof,
for any Transaction for which the discussions were initiated during the term
of this Agreement and which is consummated within a period of twelve months
after non-renewal or termination of this Agreement. Nothing herein shall
impose any obligation on the part of the Company to enter into any
Transaction.
5. Expenses of Network 1: In addition to the fees payable hereunder
and regardless of whether any Transaction is proposed or consummated, the
Company shall reimburse Network 1, up to a maximum aggregate of $2,500, for
the reasonable fees and disbursements of Network 1's counsel and Network 1's
reasonable travel and out-of-pocket expenses incurred in connection with the
services performed by Network 1 pursuant to this Agreement and at the request
of the Company, including without limitation, hotels, food and associated
expenses and long-distance telephone calls.
6. Liability of Network 1:
6.1 In furnishing the Company with the advice and other
services as herein provided, neither Network 1 nor any officer, director or
agent thereof shall be liable to the
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Company or its creditors for any acts and/or omissions attributable to or
arising from such services, including, but not limited to, errors of judgment
in connection therewith, but not including intentional or willful misconduct
by the Consultant in the performance of such services.
6.2 It is further understood and agreed that Network 1 may
rely upon information furnished to it reasonably believed to be accurate and
reliable and that, except as herein provided, Network 1 shall not be
accountable for any loss suffered by the Company by reason of the Company's
action or inaction on the basis of any advice, recommendation or approval of
Network 1, its partners, employees or agents.
6.3 The Company acknowledges that all opinions and advice
(written or oral) given by Network 1 to the Company in connection with
Network 1'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 Network 1 to be given hereunder, and
no such opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for any
purpose, nor may the Company make any public references to Network 1, or use
Network 1's name in any annual reports or any other reports or releases of
the Company without Network 1's prior written consent.
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6.4 The Company acknowledges that Network 1 makes no
commitment whatsoever as to making a market in the Company's securities or to
recommending or advising its clients to purchase the Company's securities.
Research reports or corporate finance reports that may be prepared by Network
1 will, when and if prepared, be done solely on the merits based upon an
analysis performed by Network 1 and its corporate finance personnel.
7. Company Information:
7.1 The Company shall furnish to the Consultant all data,
material and other information relevant to the performance by the Consultant
of its obligations under this Agreement, or particular projects as to which
the Consultant is acting as advisor, which will permit the Consultant to know
all facts material to the advice to be rendered, and all material or
information reasonably requested by the Consultant. The Company acknowledges
and agrees that in performing its services under this engagement, Network 1
may rely upon the data, material and other information supplied by the
Company without independently verifying the accuracy, completeness or
veracity of same. In the event that the Company fails or refuses to furnish
any such data, material or information reasonably requested by the
Consultant, and thus prevents or impedes the Consultant's performance
hereunder, any inability of the Consultant to perform shall not be a breach
of its obligations hereunder.
7.2 Except as contemplated by the terms hereof or as
required by applicable law, Network 1 shall keep confidential all non-public
information to any third party without the
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Company's prior written consent, other than to such of its employees and
advisors as Network 1 determines in its sole judgment need to have access
thereto. Notwithstanding the foregoing, the Consultant shall not be required
to maintain confidentiality with respect to information (I) which is or
becomes part of the public domain; (ii) of which it had independent knowledge
prior to disclosure; (iii) which comes into the possession of the Consultant
or its employees or agents in the normal and routing course of its own
business from and through independent non-confidential sources; or (iv) which
is required to be disclosed by the Consultant pursuant to legal process or in
accordance with governmental or regulatory requirements. If the Consultant is
requested or required (by oral questions, interrogatories, requests for
information or document subpoenas, civil investigative demands, or similar
process) to disclose any confidential information supplied to it by the
Company, or the existence of other negotiations in the course of its dealings
with the Company or its representatives, the Consultant shall, unless
prohibited by law, promptly notify the Company of such request (s) so that
the Company may seek an appropriate protective order.
8. Indemnification: The Company agrees to indemnify and hold
harmless the Consultant, its partners, employees, agents, representatives and
controlling persons (and the officers, directors, employees, agents,
representatives and controlling persons of each of them) from and against any
and all losses, claims, damages, liabilities, costs and expenses (and all
actions, suits, proceedings or claims in respect thereof) and any legal or
other expenses in giving
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testimony or furnishing documents in response to a subpoena or otherwise
(including, without limitation, the cost of investigating, preparing or
defending any such action, suit, proceeding or claim, whether or not in
connection with any action, suit, proceeding or claim in which the Consultant
is a party), as and when incurred, directly or indirectly, caused by,
relating to, based upon or arising out of the Consultant's service pursuant
to this Agreement. The Company further agrees that the Consultant shall incur
no liability to the Company or any other party on account of this Agreement
or any acts or omissions arising out of or related to the actions of the
Consultant relating to this Agreement or the performance or failure to
perform any services under this Agreement, except for the Consultant's
intentional or willful misconduct. The obligations of the Company under the
Section shall survive the termination of this Agreement.
9. Independent Contractor: Network 1 shall perform its services
hereunder as an independent contractor and not as an employee of the Company
or an affiliate thereof. It is expressly understood and agreed to by the
parties hereto that Network 1 shall have no authority to act for, represent
or bind the Company or any affiliate thereof in any manner, except as may be
agreed to expressly by the Company in writing from time to time.
10. Miscellaneous:
10.1 This Agreement between the Company and Network 1
constitutes the entire agreement and understanding of the parties hereto and
supersedes any and all previous
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agreements and understandings, whether oral or written, between the parties
with respect to the matters set forth herein.
10.2 Any notice or communication permitted or required
hereunder shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent (i) postage prepaid by registered mail, return receipt
requested, or (ii) by facsimile to the respective parties as set forth below,
or to such other address as either party may notify the other in writing:
If to the Company to: AyurCore, Inc.
0000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to: Xxxxx Xxxxxxxxx, Esq.
Rubin, Baum, Xxxxx, Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
If to Network 1, to: Network 1 Financial Securities, Inc.
The Galleria, Penthouse
0 Xxxxxx Xxxxxx, Xxxxxxxx 0
Xxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Xx.
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx X. Xxxxxxx, Esq.
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
10.3 This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors, legal
representative and assigns.
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10.4 This Agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same
original document.
10.5 No provision of this Agreement may be amended,
modified or waived, except in a writing signed by all of the parties hereto.
10.6 This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without giving effect to
conflict of law principles.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
NETWORK 1 FINANCIAL SECURITIES, INC.
By:_________________________________
Name:
Title:
AGREED AND ACCEPTED:
AYURCORE, INC.
By:__________________________________
Name:
Title:
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