EXHIBIT 10.16
BUSINESS ADVISORY AND CONSULTING SERVICES AGREEMENT
This Agreement made as of the 18 day of August, 2003, by and between Otzarot
Otzarot Nechasim Vehashkaot LTD an Israeli Corporation (hereinafter referred to
as "Otzarot") whose principal office is located at 00 Xxxxxxxxxx xx, Xxxxx Xxx
Xxxxxx 00000, and Universal Communication Systems, Inc. a publicly traded
Company (symbol: UCSY) (hereinafter referred to as "UCSY "), whose principal
offices are located at 000 Xxxxxxx Xxxx, Xxxxx 0X. Xxxxx Xxxxx, XX 00000 and
whose Chief Executive Officer is xxxxxxx Xxxxxxx.
WITNESSETH:
WHEREAS, Otzarot is a private venture capital Consulting firm that has expertise
in Completing mergers and acquisitions and rendering strategic business advice
including leveraged based buyouts.
WHEREAS, UCSY wishes to retain Otzarot on the terms and Conditions hereinafter
set forth;
NOW, THEREFORE, in Consideration of the aforesaid, it is hereby agreed by and
between the parties as follows:
ARTICLE I - SCOPE OF SERVICES
USCY has indicated and instructs Otzarot to originate, develop, structure,
negotiate and advise upon appropriate joint venture or partnership deals or
merger and acquisition deals or other forms of business combinations involving
UCSY's business activities, and the expansion thereof, into other countries and
new and other activities.
ARTICLE II - PERIOD OF PERFORMANCE
The term of this Agreement shall initially be for twelve months Commencing on
the date of this agreement. At the Conclusion of the twelve month, this
Agreement may be extended by the parties in writing.
ARTICLE III - INITIAL FEE BASED COMPENSATION
There will be no initial Compensation for the performance of the services
described above.
ARTICLE IV - CONTINGENCY BASED COMPENSATION
For successfully closing of appropriate joint venture or partnership deal or
merger and acquisition deal or other forms of business combinations, through
Otzarot's efforts, with its direct or indirect sources, Otzarot shall receive a
success fee equal to 10% of UCSY's free trading stocks of all stocks issued as
part of the subject deal and 10% of all other forms of payment as part of the
subject deal. Otzarot will also be entitled to the success fee described above
if, within three years of the date of this letter (or the date of any extension
hereof), (i) a Proposed Transaction is Completed, or (ii) UCSY enters into a
definitive agreement which subsequently results in a Proposed Transaction, and
in either case such Transaction is (a) with a party or parties introduced by
Otzarot to the Company or (b) a transaction in respect to which Otzarot has
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provided assistance in structuring, Coordinating and/or negotiating the specific
transaction.
ARTICLE V - EXPENSES
EXPENSE REIMBURSEMENT: Otzarot shall be reimbursed for expenses as provided
herein. UCSY shall prepay extraordinary Travel Expenses it approves. In the
event any item on the Expense Reimbursement xxxx causes UCSY a problem, then the
parties shall promptly negotiate a resolution of the matter in good faith.
Any expenditure over one thousand dollars must be approved in writing in advance
by an officer of UCSY . Expenses eligible for reimbursement hereunder include,
but are not limited to, production, road show Costs, Copying and travel and
entertainment expenses. Outside legal, accounting and other professional service
expenses that Otzarot incurs must be approved in advance in writing and are
subject to reimbursement as set forth in this Agreement. Outside Consultants,
legal or accounting services retained by UCSY shall be paid by UCSY .
ARTICLE VI - COMPANY INFORMATION
a. Since Otzarot must at all times rely upon the accuracy and the Completeness
of information supplied to it by officers, directors, agents and employees of
UCSY , in any proceeding or suit which may arise out of the relationship to
Otzarot, UCSY agrees to indemnify and hold Otzarot harmless for any false or
misleading information which was provided to Otzarot by UCSY .
b. No party to this agreement shall be liable for any damages for failure to
perform its obligations hereunder due to any cause beyond their Control.
ARTICLE VIL - CONFIDENTIALITY
Each party agrees that during the course of this Agreement, information that is
confidential or of a proprietary nature may be disclosed to the other party,
including, but not limited to, product and business plans, software, technical
processes and formulas, source codes, product designs, sales, costs and other
unpublished financial information, advertising revenues, usage rates,
advertising relationships, projections, and marketing data ("Confidential
Information"). Each party shall use confidential Information only for the
purposes contemplated by this Agreement, and shall not disclose it to any third
party except with the prior written consent of the disclosing party.
Confidential Information shall not include information that the receiving party
can demonstrate (a) is, as of the time of its disclosure, in the public domain,
or thereafter becomes part of the public domain through a source other than the
receiving party, (b) was known to the receiving party as of the time of its
disclosure, (c) is independently developed by the receiving party.
ARTICLE VII - INDEMNIFICATION
(A) UCSY agrees that it will indemnify and hold harmless Otzarot, its directors,
employees, agents and Controlling persons (each being an "Indemnified Party')
from and against any and all losses, claims, damages, liabilities and expenses,
joint or several (including all reasonable fees of counsel and other expenses
incurred by any Indemnified Party in connection with the preparation for, or
defense of, any claim, action or proceeding, whether or not resulting in any
liability), to which such Indemnified Party may become subject under any
applicable federal or state law, or otherwise, caused by or arising out of
Otzarot's acting for UCSY pursuant to this agreement, except that UCSY will not
be liable hereunder to the extent that any loss, claim, damage, liability or
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expense is found to have resulted primarily from Otzarot's. negligence or bad
faith.
(B) OTZAROT. Otzarot agrees to indemnify, defend, and shall hold harmless UCSY ,
its directors, employees and agents, and defend any action brought against same
with respect to any claim, demand, cause of action, debt or liability, including
reasonable attorneys' fees, to the extent that such an action arises out of the
conduct of Otzarot or any unauthorized oral or written representation made by
Otzarot or its agents, employees or affiliates in connection with the offer or
sale of securities of UCSY or any actions by Otzarot or any such person in
violation of a Act or any Blue Sky law.
(C) NOTICE. In claiming an indemnification hereunder, the indemnified party
shall promptly provide the indemnifying party with written notice of any claim,
which the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its expense, assist in the defense if
it so chooses, provided that the indemnifying party shall control such defense,
and all negotiations relative to the settlement of any such claim. Any
settlement intended to bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be unreasonably withheld.
ARTICLE IX - ASSIGNMENT
Otzarot shall not delegate or subcontract its obligations hereunder without the
prior written consent of UCSY .
ARTICLE XI - ARBITRATION/JURISDICTION OF ARBITRATION PANEL
Any controversy or claim, including matters seeking an injunction, arising out
of or relating to this Agreement or the breach thereof which is not settled
between the signatories themselves, shall be settled by an independent
arbitrator, mutually acceptable to both parties or if agreement cannot be
reached through an arbitrator selected by the American Arbitration Association
("AAA"). Notwithstanding any rules of the AAA the matter may be heard upon
application of a party telephonically upon two days notice for an injunction and
ten days notice otherwise with both parties required to waive their personal
appearances and appear ear via telephone. It is the intention of this provision
not to cause a party and its it witnesses to be disadvantaged by having to
travel great distances to have its cause heard. This Agreement shall in all
respects be interpreted and construed under the laws of the District of
Columbia. Jurisdiction for any arbitration shall lie in the District of
Columbia.
ARTICLE X - NOTICES.
Any notice which is required or desired under this Agreement shall be given in
writing and may be sent by personal delivery, fax or by mail (either United
States mail, postage prepaid, or Federal Express or similar generally recognized
overnight carrier),' addressed as follows (subject to the right to designate a
different address by notice similarly given):
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To Universal Communication Systems, Inc:
To: Otzarot Tarshish Nechasim Vehashkaot LTD
00 Xxxxxxxxxx Xx.
Xxxxx Xxx, Xxxxxx 00000,
Tel 000-0-000000.
Fax 000 0 0000000
Email xxxxxxx@xxxxxxxxx.xxx.xx
ARTICLE XIII - MISCELLANEOUS
This Agreement establishes an "independent contractor" relationship between
Otzarot and UCSY . Otzarot understands that UCSY is a publicly traded company
and that it may occur that Otzarot will come into confidential information.
Otzarot shall ensure that its employees, agents or delegates will maintain the
confidentiality of UCSY and not violate any xxxxxxx xxxxxxx rules or any other
rules of the SEC, NASD, or individual states in their conduct under this
agreement. Otzarot shall not release any press releases alluding to UCSY without
the express written permission of UCSY . Only an instrument in writing executed
by all the parties hereto may amend this Agreement. This Agreement contains the
entire agreement between the parties with respect to the subject matter hereof.
There are no promises, agreements, conditions, undertakings, understandings,
warranties, covenants or representations, oral or written, express or implied,
between them with respect to this Agreement or the matters described in this
Agreement, except as set forth in this Agreement. Any such negotiations,
promises, or understandings shall not be used to interpret or constitute this
Agreement. This Agreement may be executed in counterparts and a facsimile copy
bearing the signature of a party shall be the same for all purposes as an
original. It supersedes all prior or contemporaneous communications,
representations and agreements, whether oral or written, with respect to the
subject matter hereof. No oral agreements hereinafter made between the parties
shall be binding on either party unless reduced to writing and signed by an
authorized officer of the party so bound.
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IN WITNESS THEREOF, the parties have executed this Agreement on the dates set
forth above their respective signatures.
Date: Date:
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I accept the terms of this Agreement. I accept the terms of this Agreement.
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By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Lavi Xxxxxxx
Universal Communication Systems, Inc. Otzarot Tarshish Nechasim
President & CEO Vehashkaot LTD, President & CEO
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