BVR TECHNOLOGIES LTD.
Xxxx Xxxxxxxxxx 00
Xxxxx Xxxxx, Xxx Xxxx, Xxxxxx 00000
As of March 25, 2004
Econor Investments Corporation
000 Xxxxxxxxxxx Xxxxxxx
0000 Xxxxxx, Xxxxxxxxxxx
Attn: Xxxx Xxxxx
re: Finder's Fee Agreement
Gentlemen:
BVR Technologies Ltd. (the "Company") and Econor Investments Corporation
(the "Finder") have agreed that the Finder should act as a finder for the
current funding effort by the Company (collectively, the "Funding").
The Company anticipates that the Funding represents a long range funding
effort and that the Finder would act as finder for up to the entire funding
effort.
The first part of the Funding consists of a financing (the "Initial
Transaction"), consisting of the sale of Ordinary Shares ("Common Stock") of the
Company and one or more warrants (the "Warrants") issued to one or more
investors ("Initial Buyers"), currently anticipated to be for a minimum of
$1,500,000 and a maximum of $2,000,000, payable in one installment. The terms of
the Initial Transaction are summarized in the attached Term Sheet. The Finder
will act as the finder for the entire Initial Transaction. The amount of the
Initial Transaction and the terms of the Initial Transaction may be changed by
the Company, the Initial Buyers and the Finder, as the case may be.
Subsequent parts of the Funding, which are part of such continuing funding
effort, are referred to collectively as the "Next Transaction." It is currently
anticipated that the Next Transaction may consist of (i) one or more bridge
financings (each, a "Next Bridge Transaction"), consisting of the sale of
convertible debentures or preferred stock (the "Next Bridge Securities") and
warrants (the "Next Bridge Warrants") issued to one or more bridge
investors/lenders, and/or (ii) one or more permanent financings (each, a "Next
Permanent Transaction"), consisting of the sale of Ordinary Shares, convertible
debentures or preferred stock (the "Next Permanent Securities") and warrants
(the "Next Permanent Warrants") issued to one or more permanent
investors/lenders. The amounts of each part of the Next Transaction are to be
determined by the Company.
The Company and the Finder desire to set forth certain terms relating to
the Funding, as follows:
Part I - Initial Transaction
1. (i) The Initial Transaction will be evidenced by a Securities Purchase
Agreement (the "Initial Purchase Agreement") and related documents contemplated
by the Initial Purchase Agreement (collectively, the "Initial Transaction
Documents"). Capitalized terms used below in this Part I which are not otherwise
defined herein have the meanings ascribed to them in the Initial Purchase
Agreement.
(ii) The Initial Buyers under any of the Initial Transaction Documents
will be accredited investors. The Company will have the right to accept or
reject the subscription of any Initial Buyer introduced by the Finder.
2. In connection with the consummation of the Initial Transaction, the
Company shall:
(i) pay to the Finder in cash a amount (the "Cash Finder's Fee") equal to
thirteen percent (13%) of the Total Purchase Price (representing the Purchase
Price for all Initial Buyers), which consists of a fee of ten percent (10%) of
the Total Purchase Price and a non-accountable expense allowance of three
percent (3%) of the Total Purchase Price;
(ii) issue to the Finder warrants (the "Finder's Warrants"), for the
purchase of a number of shares equal to (x) ten percent (10%) of the Purchased
Shares for all Initial Buyers, at an initial exercise price equal to the Per
Share Purchase Price; such Finder's Warrants shall otherwise have the same terms
(including provisions relating to expiration date, adjustments to number of
shares and exercise price, cashless exercise rights and registration rights,
among others) as are provided in the Class B Warrants; and
(iii) pay to the Finder in cash a fee (the "Warrant Exercise Fee") equal
to ten percent (10%) of the gross proceeds ("Warrant Proceeds") received by the
Company from the exercise by any holder of any of the Warrants.
3. The Cash Finder's Fee will be payable on the Closing Date out of the
funds deposited in escrow with the Escrow Agent. The Finder's Warrants will be
issuable to the Finder on the Closing Date. The Warrant Exercise Fee will be
payable by the Company within five (5) business days after the Company's receipt
of the relevant Warrant Proceeds.
Part II - Next Transactions
4. The following provisions of this Part II apply to any Next Transaction
made during the period commencing on the date hereof and continuing through the
end of the New Transaction Period (as that term is defined in the Initial
Purchase Agreement; the "Right of First Refusal Period").
5. Before offering or consummating any Next Transaction with any party
(each such party, a "New Investor") during the Right of First Refusal Period,
the Company shall give written notice (a "Next Transaction Notice") to the
Finder summarizing all of the terms of such offer (a "Next Transaction Offer").
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The transaction described in the Next Transaction Offer is referred to as a
"Specified Next Transaction." The Finder shall have the right (the "Right of
First Refusal"), exercisable by written notice (a "Right of First Refusal
Exercise Notice") given to the Company, by fax, mail, or other delivery, by the
close of business on the tenth business day after the Finder's receipt of the
Next Transaction Notice (the "Right of First Refusal Expiration Date"), to
indicate to the Company that the Finder can introduce to the Company one or more
accredited investors (each, a "Next Buyer") who are expected to participate in
all or any part of the Specified Next Transaction on the terms specified in the
Next Transaction Offer within ten (10) business days after the Right of First
Refusal Expiration Date (such tenth day, the "Next Closing Date"). The Finder's
delivery of a Right of First Refusal Exercise Notice indicating its expectation
of such introduction is referred to as an "Affirmative Exercise."
6. If the Finder makes an Affirmative Exercise, (i) documentation for the
Specified Next Transaction will be prepared by counsel selected by the Finder
and the Company will pay the legal fees of such counsel, and (ii) the Company
will consider the Next Buyers introduced by the Finder and who are prepared to
close the Specified Next Transaction on such terms by the Next Closing Date
before accepting any other New Investor for the portion of the Specified Next
Transaction indicated in such Affirmative Exercise. Notwithstanding the
foregoing, the Company will have the right to accept or reject the subscription
of any Next Buyer introduced by the Finder.
7. If, and only if, the Affirmative Exercise does not refer to all of the
Next Transaction or if the Next Buyers, in the aggregate, do not consummate all
of the Next Transaction by the Next Closing Date, or if the Finder otherwise
waives its rights under this Part II in writing,1 the Company may consummate the
remaining portion of the Specified Next Transaction with any New Investor on the
terms specified in the Next Transaction Offer within thirty (30) days of the
Right of First Refusal Expiration Date (such thirtieth day, the "Next
Transaction Expiration Date"), even if the Next Transaction Expiration Date is
after the expiration of the Right of First Refusal Period.
8. If the terms of the Next Transaction to be consummated with such New
Investor differ from the terms specified in the Next Transaction Offer so that
the terms are more beneficial in any respect to the New Investor, the Company
shall give the Finder a Next Transaction Offer relating to the terms of the Next
Transaction, as so changed, and the Finder's Right of First Refusal and the
preceding terms of this Section 8 shall apply with respect to such changed
terms.
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1 It is specifically acknowledged by the Company that any such waiver by the
Finder will be limited to the specific matters referred to therein and to the
Specified Next Transaction under consideration; no such waiver, unless
explicitly stated to do so, shall waive any other rights, including any future
rights, the Finder may have to any other Initial or Next Transaction.
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8. It is anticipated that the fees payable to the Finder for any Next
Transaction in which it introduces a Next Buyer will be consistent with the fees
payable to the Finder with respect to the Initial Transaction, as specified in
Section 2 above. Such fees will payable at times similar to those contemplated
by Section 3 above.
Part III - General
This Agreement may not be amended except by the written agreement of the
party to be charged therewith.
Please evidence your agreement to the foregoing by signing and dating a
copy of this letter below in the appropriate space provided herein.
Sincerely,
BVR TECHNOLOGIES LTD.
By:_____________________________________
Xxxx Xxxx
Title: ________________
AGREED TO :
ECONOR INVESTMENTS
By: _______________________________
Xxxx Xxxxx
Title: ________________________
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