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EXHIBIT NO. 6.5
FINANCIAL ADVISORY AGREEMENT BETWEEN
VILLIERS CAPITAL PARTNERS, LLC AND
INTEGRATED SYSTEMS INTERNATIONAL, INC. DATED MARCH 9, 2000.
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FINANCIAL ADVISORY AGREEMENT
This FINANCIAL ADVISORY AGREEMENT ("Agreement") is made by and
between VILLIERS CAPITAL PARTNERS, LLC, a New York Corporation, (hereafter
"VCP"), and INTEGRATED SYSTEMS INTERNATIONAL, INC. a Nevada Corporation,
(hereafter referred as the "Company") and dated March 9, 2000. In
consideration of the mutual promises contained herein, and on the terms and
conditions herein set forth, the parties agree as follows:
ARTICLE 1
ENGAGEMENT.
VCP is hereby retained as the Company's financial advisor.
ARTICLE 2
SERVICES.
VCP agrees to provide to the Company the financial advisory services
described below:
(i) Assist in the preparation and dissemination of
information materials for potential investors;
(ii) Act as an exclusive agent to the Company to employ
the underwriters;
(iii) Coordinate and advise on aspects of public relations,
shareholders relations, availability of opportunities
to expand the Company's investor base, audit
coordination, relationships with underwriters,
transfer agents, market-makers and other broker
dealers in matters related to the securities of the
Company;
(iv) Seek and evaluate acquisition candidates for the
Company;
(v) Assist in the preparation and coordination of annual,
quarterly and current filings as required of the
Company pursuant to the Securities and Exchange Act
of 1934 and Regulations of the Securities and
Exchange Commission.
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ARTICLE 3
COMPENSATION.
3.01 In consideration for such services, the Company agrees to pay
VCP a monthly advisory fee of $3,500 during the first year of this Agreement
and a monthly advisory fee of $5,000 during the second and third year of
this Agreement. During the fourth and fifth year of this Agreement, the
Company agrees to pay VCP a monthly advisory fee of $7,500.
3.02 In addition to the monthly financial advisory fees payable to
VCP pursuant to Article 3.01, the Company shall pay or cause to be paid to
VCP the amounts of which will be equal to stated percentages of the funds
raised. The fees shall be payable in accordance with the "Lehman" formula as
follows:
(i) 5% of the first $1 million of the funds raised;
(ii) 4% of the second $1 million of the funds raised;
(iii) 3% of the third $1 million of the funds raised;
(iv) 2% of the fourth $1 million of the funds raised; and
(v) 1% of any additional funds raised.
3.03 The Fees set forth above shall be payable with respect to and
upon completion of any transaction with any financing source:
(i) While this Agreement remains in effect; or
(ii) During an eight (8) month period (the "Tail Period")
following the termination of this Agreement. Within
ten (10) days following the termination of this
Agreement by either party for any reason, VCP shall
designate in writing to the Company all prospective
financing sources to which VCP or the Company, during
the term of this Agreement, made a presentation and
had discussions with, regarding a possible funding.
Within ten days of receipt of VCP list, the Company
shall notify VCP in writing of all prospective
financial sources which were in contact with the
Company during the term of this Agreement and which
are not included in VCP's designation. If a financing
is concluded with the prospective financing source,
included in either such designations during the Tail
Period, VCP shall be entitled to be compensated as
provided in this Agreement.
3.04 While this Agreement remains in effect, VCP shall have a
right of first refusal to raise funds for the Company;
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3.05 In addition to any fees payable to VCP pursuant to this
Agreement, VCP shall be entitled to reimbursement on a monthly basis for all
reasonable and itemized out-of-pocket expenses, incurred by VCP in connection
with the performance of services hereander. The costs that will be charged to
the Company shall include, among other things, printing, travel expense,
legal and accounting fees, postage, overnight mail costs and messenger fees.
Expenses shall not be incurred without the advance approval of the Company.
ARTICLE 4
TERMS AND TERMINATION.
4.01.1 This Agreement shall be for an initial term of five (5) years
from the date hereof. Thereafter, this Agreement shall automatically be
renewed for successive one (1) year terms unless either party notifies the
other in writing of its intent not to renew not less than thirty (30) days
before the end of the initial term or the one-year renewal term.
4.02 Either party hereto shall have the right to terminate this
Agreement upon ninety (90) days written notice to the other party.
4.03 No termination of this Agreement, however brought about,
shall deprive VCP of the right to receive all of the following:
(i) A prorated (for the number of days up to the date of
termination) portion of the monthly Advisory Fees set
forth in Article 3.01 above.
(ii) The full amount of the Fees set forth in Article 3.02
above for raising the funds for the Company during
the period before early termination of this Agreement
and continuing through the Tail Period.
(iii) All reasonable expenses incurred by VCP up to the
date of early termination and authorized under this
Agreement.
ARTICLE 5
CONFIDENTIALITY.
5.01. The Company and VCP agree that any information or advice,
written or oral, provided by either party pursuant to this Agreement will be
treated by the receiving party as confidential, and will be used solely by
the parties hereto and will not be used, circulated, quoted or otherwise
referred to for any other purpose, nor will it be included in or referred to,
in whole or in part in any communication whether written or oral, prepared,
issued or transmitted by either party or any affiliate, director, officer,
employee,
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agent or representative of either party, without, in each instance, the
originating party's prior written consent. Further, in connection with this
engagement of VCP, it is contemplated that either party may supply to the
other party certain nonpublic or proprietary information concerning the
originating party or its operations ("Confidential Information"). Both
parties agree to use their best efforts to appropriately denote as
confidential all such information, which is delivered in written form.
5.02. VCP shall disclose Confidential Information of the Company
solely for the purposes of rendering services pursuant to and in accordance
with this Agreement; provided, however, that the foregoing shall not apply to
any information which becomes publicly available other than as a result of
the breach of either parties' undertakings hereunder, or that which either
party may be required to disclose by judicial or administrative process in
connection with any action, suit, proceeding or claim.
ARTICLE 6
CONFLICTS.
The Company acknowledges that VCP and its affiliates have and will
continue to have financial advisory and other relationships with parties
other than the Company pursuant to which VCP may acquire information of
interest to the Company. VCP shall have no obligation to disclose such
information to the Company. The Company recognizes that VCP is being engaged
hereunder to provide the services described above only to the Company and to
such other parties, if any, who execute this Agreement in specified other
capacities, and is not acting as an agent or a fiduciary of, and shall have
no duties or liability to, the holders of the Company's equity or debt or any
third party in connection with its engagement hereunder, all of which
purported duties are hereby expressly waived. No one other than the Company
is authorized to rely upon the engagement of VCP hereunder or any statements,
advice or opinions rendered by VCP.
ARTICLE 7
EXCLUSIVITY.
The Company agrees that no other financing transactions will be
authorized by it during the term of this Agreement and it will not directly
or indirectly negotiate or enter into any other agreement to perform services
on its behalf of the type which VCP is authorized to perform hereunder
without the prior express written consent of VCP. No fee payable to any other
financial advisor, either by the Company or another entity, shall reduce or
otherwise affect the fees payable hereunder to VCP.
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ARTICLE 8
PUBLIC ANNOUNCEMENT.
The Company agrees that VCP shall have the right to place
announcements and advertisements in financial newspapers and other financial
trade journals subject to the following terms and conditions:
(i) The Company shall have the right to approve of the
form and content of any and all announcements and
advertisements before the placement of such
announcements or advertisements;
(ii) Any and all announcements or advertisements are to be
limited to the subject of describing VCP's service in
connection with this Agreement; and
(iii) All costs associated with publishing any and all
announcements or advertisements contemplated under
this paragraph shall be borne solely by VCP.
ARTICLE 9
INDEMNIFICATION.
9.01 The Company shall indemnify and hold harmless VCP and its
affiliates, officers, directors, agents and employees from and against any
and all losses, claims, damages, liabilities or actions which arise out of or
based upon:
(i) any untrue statement or information contained in the
materials furnished to VCP by the Company, or any
supplement thereto;
(ii) any omission to state a fact which renders
information supplied misleading;
(iii) any breach of the representations, warranties,
covenants and/or agreements of the Company contained
in this Agreement; and
(iv) any actions, direct or indirect, by the Company or
its agents (other than VCP) in connection with any
offering and sale of securities which are in
violation of any applicable federal or state
securities laws and regulations.
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9.02 VCP shall indemnify and hold harmless the Company and its
officers, directors, agents and employees, from and against any and all
losses, claims, damages, liabilities or actions which arise out of or are
based upon:
(i) any misrepresentations by VCP concerning the Company
which is not based upon material provided by the
Company;
(ii) any breach of the representations, warranties,
covenants and/or agreements of VCP contained in this
Agreement; and
(iii) any action, direct or indirect, by VCP in violation
of any applicable federal or state securities laws
and regulations in connection with the offering and
sale of the Company's securities.
9.03 Each indemnifying party under this Article IX shall
immediately reimburse each indemnified party for all expenses (including,
without limitation, reasonable fees and disbursements of legal counsel)
incurred by the indemnified party in connection with investigating, preparing
for or defending any action or claim, whether or not in connection with
pending or threatened litigation or an administrative proceeding.
9.04 Promptly after receipt by an indemnified party under this
Article IX of notice of the commencement of any action or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Article IX, notify the indemnifying party in
writing of the commencement thereof, and the indemnifying party shall have
the right to participate in and, to the extent the indemnifying party so
desires jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the
indemnifying parties. The failure to notify an indemnifying party promptly of
the commencement of any such action or proceeding, if prejudicial to its
ability to defend such action or proceeding, shall relieve such indemnifying
party of any liability to the indemnified party under this Article IX, but
the omission to so notify an indemnifying party will not relieve such
indemnifying party of any liability which it may have to any indemnified
party otherwise under this Article IX. No indemnifying party shall be liable
for the settlement of any proceeding (including any governmental
investigation) effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, such indemnifying
party shall indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
9.05 Neither VCP nor the Company will be responsible for any
losses, claims, damages, liabilities or expenses of the other which are
determined by a final judgment of a court of competent jurisdiction to have
resulted solely from actions taken or omitted to be taken by such other party
due to such other party's false statements, willful misconduct or gross
negligence.
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IN WITNESS WHEREOF, VILLIERS CAPITAL PARTNERS, LLC and THE COMPANY
have caused this Agreement to be executed and delivered by their duly
authorized representatives as of the date first written above, to be
effective.
VILLIERS CAPITAL PARTNERS, LLC
By: /s/ ANNA PETINOVA
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Name: Anna Petinova
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Title: Managing Partner
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INTEGRATED SYSTEMS INTERNATIONAL, INC.
By: /s/ TERRENCE M. TIERNEY
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Name: Terrence M. Tierney
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Title: President
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