EXHIBIT 4.4
SERVICES AGREEMENT
EFFECTIVE AS OF THE 15TH DAY OF APRIL 2003 (The "Effective Date")
Between
1. B.O.S. BETTER ONLINE SOLUTIONS LTD.
(HEREINAFTER "BOS")
AND
2. BOSCOM LTD.
(HEREINAFTER "BOSCOM")
(BOS AND BOSCOM HEREINAFTER JOINTLY AND SEVERALLY, THE "COMPANY")
And
CUKIERMAN & CO. INVESTMENT HOUSE LTD. 00-000000-0
(hereinafter - "CUKIERMAN & CO.")
(hereinafter the Company and Cukierman & Co. each a "Party" and,
together the "Parties")
This services agreement (the "AGREEMENT") confirms the parties' understanding
that the Company has engaged Cukierman & Co. to act as its non-exclusive advisor
in connection with the transactions described herein.
Now therefore, in consideration for the promises and mutual agreements and
covenants contained herein, the Parties hereby agree as follows:
1. Subject to the provisions of this Agreement, Cukierman & Co will commence
performing non-exclusive investment-banking Services for the Company
(hereinafter the "Services") as of the Effective Date.
The parties hereto agree that the Company may freely solicit and receive
similar and competing services from any other person or entity during the
term of this Agreement. The Company will keep Cukierman & Co. timely
informed about any significant events in the Company which may compete with
the provisions of the Services.
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2. Cukierman & Co Representations: Cukierman & Co hereby represents that it
has the necessary abilities, qualifications and experience to provide the
services under this Agreement and will devote sufficient of its qualified
and appropriate employees for such purpose. Cukierman & Co. will use its
best efforts to assist the Company in the transactions described below. In
no event, however, shall Cukierman & Co. be obligated to sell, acquire,
place, underwrite or sub-underwrite any securities or to lend money to or
on behalf of the Company or to effect any of the transactions described
herein.
3. Cukierman & Co will prepare all the necessary material needed to present
the Company to potential investors in a just and professional manner.
4. Cukierman & Co. shall identify and notify the Company in writing the
identity of potential investors and strategic partners, and the Company may
approve in writing, at its sole and absolute discretion that such entities
will qualify as "APPROVED ENTITIES" under this Agreement.
Cukierman & Co. shall only contact Approved Entities, and in the event that
Cukierman & Co. approach any person or entity which is not an Approved
Entity hereunder, the Company will be under no obligation to pay Cukierman
& Co. Success Fees (as defined below) or any other payment.
5. The term of this Agreement (the "Term") shall commence on the Effective
Date and shall continue for a period of twelve (12) consecutive calendar
months. This Agreement shall be automatic monthly renewed, unless
terminated by either Party in accordance with Section 11 (i).
6. Scope of Services:
(i) Private Placement
(a) Definition: The sale by the Company of Company's securities,
directly to any Approved Entity.
(b) Target: to raise US$ 5-10M within 9-12 months.
(c) A Private Placement Transaction shall be deemed to have been
successfully completed if a sale by the Company of the Company's
securities directly to an Approved Entity shall have been
completed and closed (including the obtaining of any regulatory
approval necessary to complete such a sale).
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(ii) Mergers and/or Acquisitions: Aimed at entities with great capacities
in Marketing/Technology which are synergetic to the core VoIP business
of the Company, as defined from time to time by the Company's
management. Cukierman & Co. shall only contact Approved Entities, and
only after the Success Fees regarding such Mergers and/or Acquisitions
have been mutually agreed in writing by the Parties. In the event that
Cukierman & Co. approach any person or entity which is not an Approved
Entity hereunder, and/or approach an Approved Entity whilst the
Success Fees regarding such Merger and/or Acquisitions have not yet
been mutually agreed in writing by the Parties, the Company will be
under no obligation to pay Cukierman & Co. Success Fees or any other
payment.
(iii) Business Development: The Parties shall enter into a separate
agreement to be mutually agreed by the Parties (the "Business
Development Agreement"). The Business Development Agreement shall
include the terms and conditions of success fees to be paid to
Cukierman & Co., and shall not include any additional retainer
payment.
(Private Placements, Merger and/or Acquisitions, Business Development shall
be referred to hereinafter the "Transactions").
7. Method
(i) Cukierman & Co will use its experience, connections and wide knowledge
of the global financial markets and the investment-banking arena to
assist the Company in raising funds and/or in M&A transactions as
defined hereinabove
(ii) Cukierman & Co will target Approved Entities, in parallel and in
coordination with the Company, as potential investors and/or potential
strategic partners.
(iii) Cukierman & Co together with the Company will then manage the process
until the Transaction is consummated, providing introduction and full
support in the negotiating process up to the point of closing the
deal.
8. Team - Cukierman & Co assigned resources:
For Private Placement: Mr. David Chouchena,
For M&A: Mr. Uzie Ovitz
For Strategic Alliances: Xx. Xxxx Ashkenazy
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9. Remuneration
(i) Retainer
(a) In consideration of Cukierman & Co's ongoing provision of the
Services under this Agreement and under the Business Development
Agreement, including but not necessarily limited to the
Transactions (including time, office expenses etc.), Cukierman &
Co will be paid a monthly sum of US$ 10,000+ V.A.T. commencing on
April 15, 2003.
(b) Cukierman & Co will submit its invoice to the Company by the
beginning of each working month.
(c) A monthly retainer will be paid 45 days after receipt by the
Company of such invoice.
(d) In case the Company will ask to continue with part of the offered
services the retainer for each will be as follows: Business
Development: $3,650 per month; Private Placement activities:
$3,650 per month and Mergers and Acquisitions activities: $2,700
per month.
(ii) Success Fees for the successful consummation of a Transaction
involving a Private Placement will be as follows:
(a) BOS will pay Cukierman & Co success fees from the Proceeds of the
Transactions (hereinafter the "Success Fees")
IN RESPECT OF A TRANSACTION INVOLVING A PRIVATE PLACEMENT FROM
WHICH THE PROCEEDS ARE IN CASH:
(1) 6% of the total cash proceeds up to US$10,000,000, or
(2) in the event that the proceeds are in excess of
US$10,000,000, 4% of the total cash proceeds but not less
than US$ 600,000.
IN RESPECT OF A TRANSACTION INVOLVING A PRIVATE PLACEMENT FROM
WHICH THE PROCEEDS ARE IN NON-CASH:
(3) Half of the above percentages for the respective non-cash
proceeds.
(b) The Company shall pay the above Success Fees to Cukierman & Co.
in the same form (cash, shares, options, warrants or other) and
ratio in which it receives the proceeds from the relevant
Transaction. Notwithstanding the aforesaid if the Company is due
to pay Cukierman & Co. Success Fees in respect of a Transaction
for which the proceeds were received in a mixture of cash and
non-cash, Cukierman & Co. will have the option to be paid its
Success Fees in a ratio in which the cash element is actually
greater than the ratio in which the Company has received the
proceeds from such relevant Transaction provided that such cash
element is not less than 10% of the amount of cash proceeds which
the Company received from the relevant Transaction and provided
that the aggregate of the cash element and the value of the
non-cash element (duly adjusted) shall not exceed the total value
of the Success Fees calculated according to Section 9 (ii) (a)
hereinabove and Section 9 (ii) (e) hereinunder. In addition, the
Company will be entitled to increase the proportion of cash
Success Fees paid to Cukierman & Co. out of the total payable
Success Fees, at its sole decision. It is hereby agreed that in
the event that the non-cash proceeds is subject to any
restrictions on the disposal thereof (a "Lock-Up") that the
Lock-Up shall also apply to the non-cash proceeds payable to
Cukierman & Co. under this Agreement.
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(c) For the avoidance of doubt it is hereby clarified that Cukierman
& Co will not be entitled to any Success Fees for Transactions
with persons or entities that had not been approved as Approved
Entities by the appropriate Company organs.
(d) The Success Fees will be paid no later than 15 business days
after the actual receipt of the Transaction proceeds by the
Company as a result of a Transaction deemed to have been
successfully completed according to Sections 6 (i) (c).
(e) The basis of calculating the value of non-cash proceeds derived
from the consummation of certain Transactions as detailed in
Sections 9 (ii) (a) (3) and 9 (ii) (b) above, will be mutually
agreed in good faith between the Company and the relevant
Approved Entity and such valuation will govern the corresponding
calculation of the Success Fees due in respect of the
consummation of such Transactions. In the event that the Company
and the relevant Approved Entity have not agreed on the basis for
a valuation for whatsoever reason, then the Parties will, in the
first instance, endeavour to agree such basis between themselves
and, if unsuccessful, will refer the matter to an evaluator whose
identity will be mutually agreed between the Parties or, in the
absence of such agreement the evaluator will be BOS' external
auditor
(iii) Success Fees for M&A: After the Company has agreed to a specific M&A
activity the Success Fees in respect thereof, will then be discussed
between the Parties and the agreed-upon terms shall be drafted and
signed in an Addendum to be attached to this Agreement
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(iv) Expenses
(a) When a Cukierman & Co representative travels abroad on behalf of
the Company, the Company will arrange, reserve and pay the travel
expenses (including flight, hotel, transportation). In addition,
other reasonable travel and accommodation expenses incurred by
Cukierman & Co staff will be repaid against official receipts, in
accordance with the Company's standard procedure. (b) In
addition, when a Cukierman & Co representative travels abroad on
behalf of the Company, the Company will pay an additional per
diem of US$55 to cover all other expenses including meals.
(b) All foreign travel will require the Company's prior written
approval.
10. In the event that Cukierman & Co. wishes to engage with any third party in
respect of its undertakings under this Agreement, it must obtain the
Company's prior written approval before entering any such engagement. The
Company's approval to the entering of such engagement will be subject,
inter alia, to the third party entering into a confidentiality agreement
and NDA with the Company in a form acceptable to the Company.
Cukierman's decision to engage such approved third party, will be at its
sole discretion and sole responsibility. In no case will the Company be
bound to any liability toward or by such third parties engaged by Cukierman
and Co. including any liability to indemnify such third party and/or any
payment of success fee..
11. Termination
(i) Neither Party may terminate this Agreement during the first three
months after the entering hereof. Thereafter, either Party may
terminate this Agreement, with or without cause, by giving the other
Party 30 days prior written notice.
(ii) Cukierman & Co will only be entitled to receive Success Fees, as
determined in this Agreement, for Transactions between the Company and
Approved Entities which are completed and closed (including the
obtaining of any regulatory approval necessary to complete such a
Transaction) within 9 months from the termination of this Agreement.
(iii) An Approved Entity shall be automatically withdrawn from the Approved
Entities list if (i) Cukierman & Co. fails to create a dialog between
this Approved Entity and the Company within 3 months from its approval
date or (ii) the Approved Entity stops communicating with the Company
and Cukierman & Co. for a period of 5 consecutive months.
12. The Agreement shall be governed by and construed in accordance with the
Israeli law. Notwithstanding the foregoing, Cukierman & Co. confirm that
they know that BOS is registered on the NASDAQ and undertake that during
the period of providing services hereunder it shall comply with all laws
and regulations applicable to public companies registered on the NASDAQ.
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13. Confidentiality
Cukierman & Co. and the Company shall not disclose any part of the
Agreement to any external entity without the explicit consent of the other
party. Upon successful closing of a transaction within the scope of the
Agreement, Cukierman & Co. shall be entitled to publicly disclose its
involvement as advisor to the Company. The content, time, and form of this
disclosure shall be coordinated with the Company and subject to its prior
written approval in order to avoid, inter-allia, any selective public
disclosure exposure.
Any information provided by the Company to Cukierman & Co. in connection
with this Agreement (prior to or after to the date of the Agreement) shall
be kept confidential, Cukierman & Co. shall not disclose, allow access to,
transmit, or transfer the confidential information to any other party, and
shall only be used by Cukierman & Co. for purposes of its engagement
hereunder, except information that can be clearly proven by documentation
(i) was in Cukierman & Co.' possession prior to its disclosure by the
Company; (ii) is publicly disclosed other than in violation of the
Agreement; (iii) is obtained by Cukierman & Co. from a person other than
the Company who, to the knowledge of Cukierman & Co., is not bound by a
confidentiality undertaking ; (iv) the Company agrees in prior written
consent may be disclosed; or (v) is legally required to be disclosed under
compulsion of law , by order or act of any court or governmental or
regulatory authority or body, PROVIDED, HOWEVER, that Cukierman & Co. shall
provide prompt prior written notice thereof to the Company to enable it to
seek a protective order or otherwise prevent or contest such disclosure and
reasonably cooperate with the Company in attempting to limit or prevent
such required disclosure. Cukierman & Co. may also disclose such
information to those of its own and its affiliates' respective officers,
directors, employees, representatives, auditors and professional advisers
who have an actual need to know such information for purposes of performing
the services described in the Agreement. Cukierman & Co. shall, prior to
disclosing the confidential information to such officers, directors,
employees, representatives, auditors and professional advisers, obtain
their agreement to receive and use the confidential information on a
confidential basis on the same conditions as contained in this Agreement.
Cukierman & Co.' obligations under the first sentence of this paragraph
shall terminate five years from the date hereof. The confidential
information shall not be reproduced in any form or stored in a data base
without the prior written consent of the Company. All copies of the
confidential information shall contain the same proprietary notices, which
appear on the original information.
Upon termination or expiration of the Agreement or upon request of the
Company, whichever first occurs, Cukierman & Co. shall immediately return
to the Company the confidential information and all copies thereof, in all
forms and permanently delete the confidential information from all
retrieval systems and data bases in which it may be found.
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In the event of a breach of the confidentiality obligations hereunder, in
addition to and not in substitution for any other remedy available to it in
respect of such breach, the Company shall be entitled to injunctive relief
which restrains Cukierman & Co. and the respective officers, directors,
employees, representatives, auditors and professional advisers of Cukierman
& Co. from committing or continuing such breach.
For the avoidance of any doubt, the provision of this Section 13 shall
survive the termination of this Agreement.
14. No Obligation to Accept: This agreement does not constitute a commitment by
the Company, the Company's shareholders and the Company's management to
accept any of the Transactions proposed or offered to the Company by
Cukierman & Co.
15. Cukierman & Co. is providing services to the Company in relation to
Transactions. Cukierman & Co. shall not regard any person (including any
person who is a director or employee of the Company) as its client in
relation to the Transactions and will not be responsible to any other
person for providing protections afforded to clients of Cukierman & Co. or
advising any other person involved in Transactions.
16. No provision of this Agreement shall be deemed waived and no breach
excused, unless such waiver or consent excusing the breach shall be in
writing and signed by the party to be charged with such waiver or consent.
17. Indemnification:. The Company hereby agrees that in the event that it,
acting in the capacity of a principle, is the subject of a legal complaint
or action, the Company shall indemnify and hold harmless Cukierman & Co.
and its directors, officers, employees, agents, affiliates and
representatives from and against any and all third party claims, actions
(including shareholder derivative actions), proceedings, damages or
liabilities, based on or arising out of (a) any untrue statement of a
material fact required to be contained in any document provided by the
Company and, (b) any failure to include therein any material fact required
to be stated or necessary to render the statements therein not misleading.
The Company shall not, however, be responsible for any such losses, claims,
demands, damages, liabilities or expenses to the extent that they are
finally judicially determined to have resulted from Cukierman & Co.' bad
faith, negligence, wilful misconduct, non-performance or breach of this
Agreement.
Where Cukierman & Co. is the subject of a claim arising out of any untrue
statement included in any material information provided by the Company, or
the omission or the alleged omission to state therein a material
information necessary to make such information not misleading, then the
total amount recoverable from Cukierman & Co. shall be limited to such
proportion (the "Liability") as is finally judicially determined to be just
and equitable, having regards to the relative responsibility of (i)
Cukierman & Co. and (ii) any other person (including for the avoidance of
doubt, both the Company (and any director, employee, agent, subsidiary or
affiliate of the Company) and any co-advisor or other person unrelated to
the Company) who is jointly or severally liable (an "Other Party"). For the
avoidance of doubt, any limitation or exclusion or restriction on the
liability of any Other Party under any jurisdiction, whether arising under
statute or contract or resulting from death, bankruptcy or insolvency (a
"Liability Limitation") shall be ignored for the purposes of determining
the extent of responsibility of that Other Party under clause (ii) above.
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The Company shall not be liable for any settlement of any litigation or
proceeding effected without its prior written consent.
For the avoidance of any doubt, the provision of this Section 17 shall
survive the termination of this Agreement.
18. The entering into of this Agreement by the BOS and BOSCOM is subject to the
approval of their respective boards of directors.
------------------------ ------------------------ ------------------------
Name: ISRAEL GAL Name: ISRAEL GAL Name: XXXXXXX XXXXXXX
Title: CEO Title: CEO Title: CFO
Signature Signature Signature
BOSCOM LTD. B.O.S. BETTER ONLINE SOLUTIONS LTD.
------------------------ ------------------------ ------------------------
-------------------------------------------------
Name: XXXXX CHOUCHENA
Title: MANAGING DIRECTOR
Signature
CUKIERMAN & CO. INVESTMENT HOUSE LTD.
-------------------------------------------------
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