EXHIBIT 10.26
Business Strategies Group
One PPG Place
Suite 2370
Pittsburgh, Pennsylvania 15222
Mr. Terry Cooke
President & CEO
Power Interactive Media, Inc.
181 Whitehall Drive
Markham, Ontario L3R 9T1
Dear Mr. Cooke,
I am pleased to submit the following proposal for the engagement of Business
Strategies Group LLC ("BSG") as a strategic advisor to Power Interactive Media,
Inc. (PIAM) for transactional, strategic and capital raising activities. In our
preparation of this proposal we have taken into consideration the goals and
needs of PIAM, as well as the amount and manner of payment for the services
requested.
1. Scope of Services
a. BSG will provide strategic counsel and transactional support, particularly
with respect to the negotiation of any strategic combination of financing.
b. BSG will support the capital raising efforts of PIAM through identifying
and presenting PIAM with potential strategic, individual or institutional
investors. It is our understanding that PIAm intends to raise $4mm (U.S.).
c. BSG will assist in identifying and obtaining strategic and other business
partners.
d. BSG will provide marketing leads and develop relationships for deployment
of the Kiosks.
2. Term
This agreement shall be for an initial term of twelve (12) months commencing
March 19, 2001 ("Initial Term"). Thereafter, this agreement shall continue on a
month-to-month basis subject to the right of either party to terminate this
agreement upon thirty (30) days written notice to the other party. If PIAM
terminates this agreement prior to the expiration of the Initial Term, BSG will
be entitled to all fees and other payments due for the entire period of the
Initial Term. If PIAM receives an investment following the expiration of this
agreement from a source or sources introduced to PIAM by BSG, the fee described
in paragraph 3(B)(i) will be deemed earned and will be due at closing of the
investment.
3. Fees
A. Advisory Fee:
In consideration of the services to be provided to PIAM, BSG shall be
issued l0,000 shares of common stock and will also be awarded warrants to
purchase 50,000 shares ("Advisory Warrants") of common stock, at a cost of
$0.50 per share. Upon completion of a financing transaction involving debt
or equity of at least $4mm (U.S.), or a strategic combination
("Transaction") for which BSG's services have been utilized, BSG shall
receive warrants to purchase 160,000 shares of Common Stock at a cost of
$2.50 per share. Advisory Warrants shall fully vest upon execution of this
Agreement. All warrants earned shall be exercisable for a period of two
years.
B. Transaction Fee:
(i) As compensation for advising the PIAM and assisting in successfully
completing a Transaction or Transactions from a source or sources
introduced to PIAM by BSG, PIAM agrees to pay to BSG at the closing of the
Transaction, a cash fee equal to 4% of Total Consideration paid.
Additionally, BSG will receive stock, equal in value, based on the per
share price paid in the Transaction, equal in value to 3% of the Total
Consideration paid.
(ii) Total Consideration means all forms of consideration received by PIAM in
connection with the Transaction, whether cash, stock or evidence of
indebtedness. Securities received in connection with the Transaction shall
be deemed to have the following values for purposes of calculating Total
Consideration: (a) debt securities shall be deemed to have a value equal to
their face amount; (b) publicly traded preferred or common equity
securities shall be deemed to have a value equal to their average closing
price for the 30 trading days prior to the public announcement of the
Transaction; and (c) all other preferred or common equity securities shall
be deemed to have a value equal to their fair market value as mutually
agreed upon by the parties hereto (but in no even greater than the
percentages noted in 3(b)(i). In the event that any additional conditional
or contingent consideration is paid, and which is not otherwise covered in
this paragraph, PIAM agrees to pay BSG the applicable portion of success
fee associated with such consideration at the time such consideration is
received.
(iii)The payment of this fee shall be due and payable in cash and by delivery
of the stock at the time of closing.
C. Marketing Fees:
BSG shall receive stock and royalty payments as provided for on Exhibit
"A".
D. Expenses:
PIAM shall reimburse BSG for all out of pocket expenses within 10 days of
submission of an expense report, with receipts. Any single expense in
excess of $500.00 must be pre-approved by PIAM
4. Confidentiality
All information provided by PIAM is proprietary and confidential. BSG
acknowledges responsibility, both during and after the Term of this agreement,
to use all reasonable efforts to preserve the confidentiality of any propriety
information or data disclosed by PIAM.
5. Rights and Responsibilities
The parties understand that BSG is working as an independent contractor with
respect to this engagement and not as a subsidiary or employee of PIAM. PIAM
will not provide fringe benefits, health insurance benefits, paid vacation, or
any other employee benefit.
This agreement represents the entire agreement of the parties and may be amended
only by a writing signed by all parties. It shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
Please acknowledge your understanding of the above and your intent to be legally
bound by the terms hereof by signing and returning this letter which shall
constitute our agreement with respect to the subject matter of this letter.
Business Strategies Group, LLC
By: /s/ John A. Kincaid, Jr. Date: March 19, 2001
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John A. Kincaid, Jr.
President/CEO
Power Interactive Media, Inc.
By: /s/ Terry Cooke Date: March 19, 2001
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Terry Cooke
President & CEO
BSG ENGAGEMENT LETTER
Conventional Photo/Merchandise Photo Kiosks
o Placement $500 in shares
(based on the average of the previous 30-day trading
results).
o Picture Override 3% on gross picture revenues
o Advertising 30% on regional programs
Commission 25% on national programs
Baby Photo Kiosks
o Placement $750 in shares
(based on 30-day average as above)
o Picture Override 2% on gross picture revenues for 3 years
o Advertising 30% on all programs
Commission
EXHIBIT "A"