EXHIBIT 10.7
ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement is made and entered into as of the __ day of
______, 1999 by and between Xxxxxxx Xxxxxxxx Securities Corporation, a Florida
corporation ("Xxxxxxx"), and eSafetyworld, Inc., a Nevada 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 Xxxxxxx for the term
specified in Paragraph 2 hereof to render consulting 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 _______, 1999 to ______, 2001.
3. Duties of Xxxxxxx: During the term of this Agreement,
Xxxxxxx shall seek out Transactions (as hereinafter defined) on behalf of the
Company and shall furnish advice to the Company in connection with any such
Transactions.
4. Compensation: In consideration for the services rendered by Xxxxxxx to
the Company pursuant to this Agreement (and in addition to the expenses provided
for in Paragraph 5 hereof), the Company shall compensate Xxxxxxx as follows:
(a) The Company shall pay Xxxxxxx a fee of $4,000 per month during
the term of this Agreement. The sum of $96,000 shall be payable in full on the
date of this Agreement. In the event that Xxxxxxx ceases its business operations
as a financial advisor and investment banker, materially breaches or is unable
to satisfy its performance obligations hereunder, then Xxxxxxx shall repay to
the Company the pro rata unearned portion of foregoing fee, based on the number
of months fo which performance was delivered and the remaining number of months
in the term.
(b) In the event that any Transaction (as hereinafter defined)
occurs during the term of this Agreement or one year thereafter, the Company
shall pay fees to Xxxxxxx as follows:
Consideration Fee
$ - 0 - to $ 1,000,000 5% of Consideration
$ 1,000,001 to $2,000,000 4% of Consideration
$ 2,000,001 to $3,000,000 3% of Consideration
$ 3,000,001 to $4,000,000 2% of Consideration
$4,000,001 or more 1% of the Consideration in excess of
$4,000,001
For the purposes of this Agreement, "Consideration"
shall mean the total market value 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 or brokers retained by Xxxxxxx shall be
paid by Kashner.
For the purposes of the Agreement, a
"Transaction" shall mean (a) any transaction
originated by Xxxxxxx, other than in the ordinary
course of trade or business of the Company, whereby,
directly or indirectly, control of or a material
interest in the Company or any of its businesses or
any of their respective assets, is transferred for
Consideration, (b) any transaction originated by
Xxxxxxx whereby the Company acquires any other
company or the assets of any other company or an
interest in any other company (an "Acquisition") or (c) any
sale or Acquisition in connection with which the
Company engages an investment banker other than
Xxxxxxx and pays such investment banker a fee in
respect of such Transaction unless Xxxxxxx was
unwilling waive to so act.
In the event Xxxxxxx
originates a line of credit with a lender, the
Company and Xxxxxxx will mutually agree on a
satisfactory fee for such services provided based
upon reasonable and customary practice in the
industry and the terms of payment of such fee;
provided, however, that in the event the Company is
introduced to a corporate partner by Xxxxxxx in
connection with a merger, acquisition or financing
and a credit line develops directly as a result of
the introduction, the
appropriate fee shall be the amount set forth in the schedule above with
consideration to be based upon the amount of the line of credit. In the event
Xxxxxxx 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 of five
percent (5%) of total sales generated directly from this introduction during the
first two years following the date of the first sale, in lieu of the fees set
forth in the schedule above. Total sales shall mean cash receipts less any
applicable refunds, returns, allowances, credits 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 month following the receipt of customers' payment. 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. All fees to be paid pursuant to this Agreement,
except as otherwise specified, are due and payable to Xxxxxxx in cash at the
closing or closings of any transaction specified in Paragraph 4 hereof. In the
event that this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, Xxxxxxx 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.
5. Expenses of Xxxxxxx: In addition to the fees payable hereunder, and
regardless of whether any transaction set forth in Paragraph 4 hereof is
proposed or consummated the Company shall reimburse Xxxxxxx for all fees and
disbursements of Xxxxxxx'x counsel and Xxxxxxx'x travel and reasonable
out-of-pocket expenses incurred in connection with and in direct furtherance of
the services performed by Xxxxxxx pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and
long-distance telephone calls. Xxxxxxx shall obtain the consent of the Company
before incurring any expense over $1,000.
6. Liability of Xxxxxxx:
(1) The Company acknowledges that all opinions and advice (written or oral)
given by Xxxxxxx to the Company in connection with Xxxxxxx'x 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 Xxxxxxx 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 Xxxxxxx, or use Xxxxxxx'x name in any annual reports or any other
reports or releases of the Company without Xxxxxxx'x prior written consent.
(2) The Company acknowledges that Xxxxxxx 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, except that Xxxxxxx has
committed to make a market in the Company=s securities for at least 45 days
after the effective date of the Company=s initial public offering. Research
reports or corporate finance reports that may be prepared by Xxxxxxx will, when
and if prepared, be done solely on the merits or judgment of analysis of Xxxxxxx
or any senior corporate finance personnel of Xxxxxxx.
7. Xxxxxxx'x Services to Others: The Company acknowledges that Xxxxxxx'x or
its affiliates are in the business of providing financial services and
consulting advice to others. Nothing herein contained shall be construed to
limit or restrict Xxxxxxx in conducting such business with respect to others, or
in rendering such advice to others.
8. Company Information:
(a) The Company recognizes and confirms that, in
advising the Company and in fulfilling its engagement
hereunder, Xxxxxxx will use and rely on data,
material and other information furnished to Xxxxxxx
by the Company. The Company acknowledges and agrees
that in performing its services under this
engagement, Xxxxxxx may rely upon the data, material
and other information supplied by the Company without
independently verifying the accuracy, completeness or
veracity of same.
(b) Except as contemplated by the
terms hereof or as required by applicable law,
Xxxxxxx shall keep confidential all material
non-public information provided to it by the Company,
and shall not disclose such information to any third
party, other than such of its employees and advisors
as Xxxxxxx determines to have a need to know. Upon
termination of this Agreement, at the request of the
Company, Xxxxxxx shall deliver to the Company all
non-public material in its possession
relating to the business affairs of the Company.
9. Indemnification:
a. The Company shall indemnify and hold Xxxxxxx and its directors,
officers, employees and agents harmless against any and all liabilities, claims,
lawsuits, including any and all awards and/or judgments to which it may become
subject under the Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934, as amended (the "Act") or any other federal or
state statute, at common law or otherwise, insofar as said liabilities, claims
and lawsuits (including awards and/or judgments) arise out of or are in
connection with the services rendered by Xxxxxxx or any transactions in
connection with this Agreement, except for any liabilities, claims and lawsuits
(including awards judgments and related costs and expenses), arising out of acts
or omissions of Xxxxxxx. In addition, the Company shall also indemnify and hold
Xxxxxxx harmless against any and all reasonable costs and expenses, including
reasonable counsel fees, incurred or relating to the foregoing. If it is finally
judicially determined that the Company will not be responsible for any
liabilities, claims and lawsuits or expenses related thereto, the indemnified
party, by his or its acceptance of such amounts, agrees to repay the Company all
amounts previously paid by the Company to the indemnified person and will pay
all costs of collection thereof, including but not limited to reasonable
attorneys= fees related thereto.
Xxxxxxx shall give the Company prompt notice of any
such liability, claim or lawsuit which Xxxxxxx contends is the subject matter of
the Company's indemnification and the Company thereupon shall be granted the
right to take any and all necessary and proper action, at its sole cost and
expense, with respect to such liability, claim and lawsuit, including the right
to settle, compromise and dispose of such liability, claim or lawsuit, excepting
therefrom any and all proceedings or hearings before any regulatory bodies
and/or authorities.
Xxxxxxx shall indemnify and hold the Company and its
directors, officers, employees and agents harmless against any and all
liabilities, claims and lawsuits, including any and all awards and/or judgments
to which it may become subject under the 1933 Act, the Act or any other federal
or state statute, at common law or otherwise, insofar as said liabilities,
claims and lawsuits (including awards and/or judgments) arise out of or are
based upon Xxxxxxx=s gross negligence, useful misconduct, bad faith or any
untrue statement or alleged untrue statement of a
material fact or omission at a material fact required to be stated or necessary
to make the statement provided by Xxxxxxx, not misleading, which statement or
omission was made in reliance upon information furnished in writing to the
Company by or on behalf of Xxxxxxx for inclusion in any registration statement
or prospectus or any amendment or supplement thereto in connection with any
transaction to which this Agreement applies In addition, Xxxxxxx shall also
indemnify and hold the Company harmless against any and all costs and expenses,
including reasonable counsel fees, incurred or relating to the foregoing.
The Company shall give to Xxxxxxx prompt notice of
any such liability, claim or lawsuit which the Company contends is the subject
matter of Xxxxxxx'x indemnification and Xxxxxxx thereupon shall be granted the
right to a take any and all necessary and proper action, at its sole cost and
expense, with respect to such liability, claim and lawsuit, including the right
to settle, compromise or dispose of such liability, claim or lawsuit, excepting
therefrom any and all proceedings or hearings before any regulatory bodies
and/or authorities.
b. In order to provide for just and equitable contribution under the Act in
any case in which (i) any person entitled to indemnification under this Section
9 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 10 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of any
such person in circumstances for which indemnification is provided under this
Section 10, then, and in each such case, the Company and Xxxxxxx shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after any contribution from others) in such proportion taking
into consideration the relative benefits received by each party fro the offering
covered by the prospectus with respect to any transactions in connection with
this Agreement (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was assessed, the
opportunity to correct and prevent any statement or omission and other equitable
considerations appropriate under the circumstances; provided, however, that
notwithstanding the above in no event shall Xxxxxxx be required to contribute
any amount in excess of 10% of the public offering price of any securities to
which such Prospectus applies; and provided, that, in any such case, no person
guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
Within fifteen (15) days after receipt by any party to this Agreement (or
its representative) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof is
to be made against another party (the "Contributing Party"), notify the
Contributing Party of the commencement thereof, but the omission so to notify
the Contributing Party will not relieve it from any liability which it may have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party or his or its representative of the commencement thereof
within the aforesaid fifteen (15) days, the Contributing Party will be entitled
to participate therein with the notifying party and any other Contributing Party
similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution without the written
consent of the Contributing Party. The indemnification provisions contained in
this Section 10 are in addition to any other rights or remedies which either
party hereto may have with respect to the other or hereunder.
10. Xxxxxxx an Independent Contractor : Xxxxxxx 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 Xxxxxxx 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.
11. Miscellaneous:
(1) This Agreement between the Company and Xxxxxxx constitutes the entire
agreement and understanding of the parties hereto, and supersedes any and all
previous agreements and understandings, whether oral or written, between the
parties with respect to the matters set forth herein.
(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: eSafetyworld, Inc.
000-00 Xxxxx Xxxxxx Xxx.
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
with a copy to: XxXxxxxxxx & Xxxxx, LLP
000 Xxxxxxx Xxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
If to Kashner, to: Xxxxxxx Davidson Securities Corporation
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
with a copy to: Sichenzia, Ross & Xxxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
(3) This Agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors, legal representatives and
assigns.
(4) This Agreement may be executed in any number of counterparts, each of
which together shall constitute one and the same original document.
(5) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
(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. The parties hereby agree that any dispute which may arise between
them arising out of or in connection with this Agreement shall be adjudicated
before a court located in New York City, and they hereby submit to the exclusive
jurisdiction of the courts of the State of New York located in New York, New
York and of the federal courts in the Southern District of New York with respect
to any action or legal proceeding commenced by any party, and irrevocably waive
any objection they now or hereafter may have respecting the venue of any such
action or proceeding brought in such a court or respecting the fact that such
court is an inconvenient forum, relating to or arising out of this Agreement,
and consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in care of the
address set forth in Paragraph 11(b) hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
XXXXXXX XXXXXXXX SECURITIES CORPORATION
By:________________________________
ESAFETYWORLD, INC
By:________________________________
