FINDER'S AGREEMENT
This Agreement is made effective as of July 7, 1997 by and between Corporate
Holdings Inc., 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 ("Arenal"), and
First Pacific Networks, Inc., 000 Xxx Xxxx, Xxx Xxxx, XX 00000 ("FPN").
FPN is retaining the services of Arenal to find an investor or entity to either
infuse capital or to acquire a controlling interest in FPN ("Services").
Under this Agreement Arenal is acting in an individual capacity and not as an
agent or representative of Rocky Mountain Securities & Investments, Inc.
This Agreement is non-exclusive and is performance based as evidenced by the
closing of a transaction at FPN's sole discretion and receipt of funding by FPN.
Therefore, the parties agree as follows:
1. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by Arenal shall be determined by
Arenal. FPN will rely on Arenal to work as many hours as may be reasonably
necessary to fulfill Arenal's obligations under this Agreement.
2. FEES. FPN will pay a success fee of 10% for any amount of capital
convertible into equity in FPN that is raised and received by FPN as the result
of a closed transaction. In the event that FPN receives incremental funding the
success fee will be paid to Arenal on an incremental or prorata basis within 48
hours after funding actually received by FPN. However, no success fee will be
paid in the event that Arenal introduces a potential investor and/or bridge loan
provider with which FPN has previously discussed either a capital or equity
investment in FPN or a bridge loan arrangement with FPN within the two (2) years
before the effective date of this Agreement. In such an event FPN will promptly
notify Arenal after an introduction that such a condition exists. If through
the efforts of Arenal a transaction is successfully closed with an "excluded"
investor or lender as defined herein which has previously shown little or no
interest in pursuing a business relationship with FPN, Arenal will be entitled
to receive a success fee or such other success fee as may be negotiated between
the parties prior to closing a transaction.
In addition and promptly after FPN's emergence from Chapter 11 under FPN's
reorganization plan and subject to negotiation between Arenal and the investor,
Arenal shall be entitled to receive a stock option grant in FPN common stock
that would enable Arenal to purchase 0.001% of an option for every dollar raised
at a purchase price of $0.01 per option. The number of stock options granted
shall be equal to 10% of the total number of equity shares purchased by the
investor(s) and such options shall be exercisable for five (5) years after the
grant date.
If Arenal arranges for the purchase or sale of assets, for a merger, acquisition
or joint venture accepted and closed by FPN, FPN will pay a fee to Arenal for
his services calculated as follows:
5% of the value of the transaction to FPN up to and including $1,000,000.
1.
4% of the value of the transaction to FPN greater than $1,000,000 and up to
and including $2,000,000.
3% of the value of the transaction to FPN greater than $2,000,000 and up to
and including $3,000,000.
2% of the value of the transaction to FPN greater than $3,000,000 and up to
and including $4,000,000.
1% of the value of the transaction to FPN in excess of $4,000,000, all from
such income as received.
In the event that the investor agrees to provide bridge loan funding to FPN,
such funding shall be entitled to a preferred status as 364C1 "Super Priority"
funds and Arenal shall receive a 10% success fee for such funding received by
FPN due to a closed transaction subject to the approval of the U.S. Bankruptcy
Court.
3. TERM/TERMINATION. This Agreement shall be effective for a period of 60
days from the signing of this Agreement.
4. RELATIONSHIP OF PARTIES. It is understood by the parties that Arenal
is an independent contractor with respect to FPN, and not an employee of FPN.
FPN will not provide fringe benefits, including health insurance benefits, paid
vacation, or any other employee benefits, for the benefit of Arenal. Arenal will
not bind or obligate FPN in any way, means or form to any third party.
5. CONFIDENTIALITY. Arenal recognizes that FPN has and will have the
following information:
- products
- prices
- future plans
- business affairs
- trade secrets
- technical information
- customer lists
- product design information
and other proprietary information (collectively, "Information") which are
valuable, special and unique assets of FPN. Arenal agrees that Arenal will not
at any time or in any manner, either directly or indirectly, use any Information
for Arenal's own benefit, or divulge, disclose, or communicate in any manner any
Information to any third party without the prior written consent of FPN. Arenal
will protect the Information and treat it as strictly confidential. A violation
of this paragraph shall be a material violation of this Agreement.
6. CONFIDENTIALITY AFTER TERMINATION. The confidentiality provisions of
this Agreement shall remain in full force and effect after the termination of
this Agreement indefinitely.
2.
7. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage prepaid, or transmitted by
facsimile, addressed as follows:
First Pacific Networks, Inc. Xxxxxxxxxxx X. Xxxxxx
000 Xxx Xxxx 0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000 Xxxxxx, XX 00000
Fax: 000-000-0000 Fax: 000-000-0000
Such addresses may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreement between the parties.
9. AMENDMENT. This Agreement may be modified or amended if the amendment
is made in writing and signed by both parties.
10. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
11. WAIVER OR CONTRACTUAL RIGHT. The failure of either party to enforce
any provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
12. ASSIGNMENT. Arenal may not assign his rights or delegate his duties
hereunder without the written consent of FPN.
13. NON-CIRCUMVENT. If any parties or related parties introduced by Arenal
within the terms of this Agreement results in a closed transaction within six
(6) months after expiration of this Agreement, Arenal shall still earn said
compensation as specified in section 2 above.
14. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of California.
15. APPROVAL. This Agreement is subject to the approval of FPN's Board of
Directors and the United States Bankruptcy Court for the Northern District of
California, San Xxxx Division.
CORPORATE HOLDINGS INC. FIRST PACIFIC NETWORKS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Xxxxxxxxxxx X. Xxxxxx, President Xxxxx X. Xxxxxxx, President & CEO
3.
