EXHIBIT 10.20
BUSINESS ADVISORY AND CONSULTING SERVICES AGREEMENT
This Agreement made as of the 19th day of March, 2002, by and between Tarshish
Capital Markets a Israel Corporation (hereinafter referred to as "Tarshish")
whose principal office is located at 000 Xxxxxxxxxx Xx. Xxxxx Xxx, Xxxxxx 00000,
and Safe Transportation Systems, Inc. a publicly traded Company (symbol: SFTS)
(hereinafter referred to as "STS"), whose principal offices are located at 000
Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx, XXX, 00000 and whose Chief
Executive Officer is Xxx Xxxxxxx .
WITNESSETH:
WHEREAS, Tarshish is a private venture capital consulting firm that has
expertise in completing mergers and acquisitions, raising funds and rendering
strategic business advice including leveraged based buyouts.
WHEREAS, STS wishes to retain Tarshish 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
STS has indicated to Tarshish that they are seeking financing in excess of USD
$3 million dollars the "Proposed Transaction." Tarshish shall use its best
efforts on behalf of STS to raise such funds in a private offering exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Act").
ARTICLE II - PERIOD OF PERFORMANCE
The term of this Agreement shall initially be for six months commencing on the
date of the payment of the initial retainer. At the conclusion of the sixth
month, this Agreement may be extended by the parties in writing.
ARTICLE III - INITIAL FEE BASED COMPENSATION
As initial compensation for the performance of the services described above, STS
will transfer to Tarshish compensation as an Initial Non-Refundable Retainer the
sum of five hundred thousand (500,000) Regulation S stock. Said stock will be
restricted for one year under, Regulation S restrictions, except that such stock
will have piggy back registration rights.
ARTICLE IV - CONTINGENCY BASED COMPENSATION
For successfully closing a Proposed Transaction, through Tarshish's efforts,
with its direct or indirect sources, Tarshish shall receive a success fee equal
to 13% of the cash so invested into STS or any of its subsidiaries or projects.
Tarshish 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) STS 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 Tarshish to
the Company or (b) a transaction in respect to which Tarshish has provided
assistance in structuring, Coordinating and/or negotiating the specific
transaction.
After Tarshish Completes an initial raise of USD $1 million dollars
($1,000,000), STS shall pay to Tarshish the additional sum of the seven thousand
dollars ($7,000) per month for Six months as and for the services listed herein.
In addition, for successfully closing a Proposed Transaction, through Tarshish's
efforts, STS agrees to pay an equity success fee. Such equity success fee will
be paid in the form of Regulation S stock equal to 10% percent of the equity in
the Proposed Transaction. Said stock will be restricted for one year under,
Regulation S restrictions, except that such stock will have piggy back
registration rights.
ARTICLE V - EXPENSES
EXPENSE REIMBURSEMENT: Tarshish shall be reimbursed for expenses as provided
herein. STS shall prepay extraordinary Travel Expenses it approves. In the event
any item on the Expense Reimbursement xxxx causes STS 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 STS. 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 Tarshish 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 STS shall be paid by STS. In the event
STS desires Tarshish to act as a placement agent for the private placement, then
in that event, STS shall bear the costs of outside legal counsel approving the
private placement memorandum.
ARTICLE VI - COMPANY INFORMATION
a. Since Tarshish must at all times rely upon the accuracy and the completeness
of information supplied to it by officers, directors, agents and employees of
STS, in any proceeding or suit which may arise out of the relationship to
Tarshish, STS agrees to indemnify and hold Tarshish harmless for any false or
misleading information which was provided to Tarshish by STS.
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) STS agrees that it will indemnify and hold harmless Tarshish, 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
Tarshish's acting for STS pursuant to this agreement, except that STS will not
be liable hereunder to the extent that any loss, claim, damage, liability or
expense is found to have resulted primarily from Tarshish's negligence or bad
faith.
(b) TARSHISH. Tarshish agrees to indemnify, defend, and shall hold harmless STS,
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 Tarshish or any unauthorized oral or written representation made by
Tarshish or its agents, employees or affiliates in connection with the offer or
sale of securities of STS or any actions by Tarshish 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
Tarshish shall not delegate or subcontract its obligations hereunder without the
prior written consent of STS.
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 via telephone. It is the intention of this provision not
to cause a party and its 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):
To: Safe Transportation Systems, Inc.,
000 Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx,
XXX, 00000
000 000 0000 (tel)
000 000 0000 (fax)
Email: xxxxxxxx@xx-xxx.xxx
To: Tarshish
000 Xxxxxxxxxx Xx.
Xxxxx Xxx, Xxxxxx 00000,
000 0 000 0000 (tel)
000 0 000 0000 (Fax)
Email: xxxxxxx@xxxxxxxxx.xxx.xx
ARTICLE XIII - MISCELLANEOUS
This Agreement establishes an "independent contractor" relationship between
Tarshish and STS. Tarshish understands that STS is a publicly traded company and
that it may occur that Tarshish will come into confidential information.
Tarshish shall ensure that its employees, agents or delegates will maintain the
confidentiality of STS and not violate any xxxxxxx xxxxxxx rules or any other
rules of the SEC, NASD, or individual states in their conduct under this
agreement. Tarshish shall not release any press releases alluding to STS without
the express written permission of STS. 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.
IN WITNESS THEREOF, the parties have executed this Agreement on the dates set
forth above their respective signatures.
Date: ________________________ Date: _______________________________
I accept the terms of this Agreement. I accept the terms of this Agreement.
------------------------------------ -------------------------------------
By: By:
Safe Transportation Systems, Inc. Tarshish Capital Markets
President & CEO President
