Exhibit 10.7
KIGHTSBRIDGE CAPITAL
June 28, 2003
TransWorld Benefits, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxx Seven, President
Gentlemen:
Knightsbridge Holdings, LLC, ("Knightsbridge") is please to be retained on
the terms and conditions set forth in this letter of engagement ("Engagement
Letter") as a NON-EXCLUSIVE consultant to your company TRANSWORLD BENEFITS, INC.
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(The "Company"), to assist in a variety of areas relating to the financial,
strategic, and related developmental growth of the Company (the "Engagement").
1. Services of Knightsbridge
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For the Term of Engagement (as hereinafter defined), and with your general
knowledge and consent, we agree to provide to the Company a range of
consultative and related services which may, but which will not necessarily,
include the following: (i) identifying, evaluating and advising in relation to
the Company's current structural (including business model), financial,
operational, managerial, strategic and other needs and objectives, (ii)
preparing and coordinating with the Company and others in the development of
business plans, investor presentations and financial models, (iii) identifying
potential sources of private and/or public financing ("Financial Sources"),
including those involving transactions requiring issuance by the Company of
either equity, debt and/or equity-linked securities ("Financing Transactions")
and negotiating, structuring and advising in relation to potential Financing
Transactions, (iv) identifying potential merger, acquisition, divestiture,
consolidation or other combination ("M&A Transaction") opportunities and
negotiating, structuring and advising in connection with potential M&A
Transactions, (v) advising and assisting the Company in connection with the
preparation of any registration statements, periodic or other SEC reports or
proxies, and (vi) coordinating with, and advising in connection with the
activities of, Outside Professionals, including without limitation, attorneys,
accountants, market professionals, etc.
2. Term of Engagement
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The Engagement shall be effective for a period of six (6) months (the
"Initial Term"), commencing on the date first appearing above (the "Term of
Engagement"). Thereafter, the Engagement shall automatically renew on a
month-to-month basis, subject to the right of the Company and/or Knightsbridge
to terminate the Engagement as of the end of any given month, after the
expiration of the initial term, by giving written notice to the other party at
least thirty (30) days notice ("Termination"). Notwithstanding the foregoing,
the Company shall not have the right to cancel this Agreement until such tine as
it has fulfilled all its obligations under any and all outstanding Agreements
with the Advantage Fund I, LLC or its assignees. KNIGHTSBRIDGE SHALL GRANT TO
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COMPANY A "TRIAL PERIOD" OF TWO WEEKS COMMENCING FROM THE DATE OF THIS
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AGREEMENT. DURING THIS TRAIL PERIOD, COMPANY SHALL HAVE THE RIGHT TO CANCEL THE
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AGREEMENT WITH NO FURTHER OBLIGATION ON ITS PART EXCEPT TO ITS OBLIGATION UNDER
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SECTION 3.1.3 BELOW. [HANDWRITTEN] As exercised and as requested by the
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company. /s/CS
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3. Compensation
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In consideration for the services rendered by Knightsbridge to the Company
pursuant to the Engagement (and in addition to the expenses provided for in
Paragraph 4 hereof), and throughout the Term of Engagement, the Company shall
compensate Knightsbridge as follows:
3.1 Engagement Retainer
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3.1.1 Monthly Retainer. An initial non-refundable retainer fee in
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an amount equal to USD $10,000 payable in cash or in
securities as outlined herein upon the delivery of this
Engagement Letter and, thereafter a monthly retainer in an
amount equal to $10,000 payable in cash on the first day of
each month of the Term of Engagement (the "Monthly
Retainer"). Invoices shall be rendered upon the first of the
month and are due upon presentation. Knightsbridge shall, at
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its option accept shares of registered stock under the same
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terms/discounts/return characteristics as any Option rights
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pursuant to Section 3.1.3.
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3.1.2 Equity-Based Incentive Compensation. Company agrees to pay
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Knightsbridge an amount of common stock of the Company, upon
finalization of this Agreement, in an amount not less than
250,000 shares of the fully diluted, unrestricted shares of
the Company. Company shall also issue to Knightsbridge a
warrant to purchase ("warrant"), an additional 150,000 of
the Company's fully diluted, shares of the company,
exercisable for five (5) years at an exercise price equal to
110% of the Company's closing price on the Over The Counter
Bulletin Board as maintained by NASDAQ as of the date of
this Agreement. Company shall reserve sufficient
unrestricted shares to cover the exercise of any or all of
these warrants.
3.1.3 Options to Purchase Common Stock. In addition to the
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aforementioned compensation, Company agrees to grant
Knightsbridge the right to purchase up to $300,000 of the
Company's common stock at a price equal to 30% discount to
the closing bid price of the Company's common stock on the
electronic bulletin board (or successor exchange) as
maintained by the NASDAQ as of the date of exercise. The
shares to be issued by the Company shall be fully paid and
non-assessable and bear no restrictive legend. Knightsbridge
shall notify the Company of its intent to exercise by
facsimile copy of an exercise notice a copy of which has
been attached to the Agreement as Exhibit "A". Knightsbridge
shall send via overnight courier an original of each
exercise notice.
4. Expenses
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In addition to any Engagement Retainers and Additional Compensation payable
hereunder, and without regard to whether any Compensable Events occur hereunder,
the Company shall reimburse Knightsbridge for all fees approved by an officer of
the Company, relating to Knightsbridge's travel and out-of-pocket expenses
reasonably incurred in connection with the services performed by Knightsbridge
pursuant to this Engagement Letter, including without limitation, hotel, food,
and associated expenses and long-distance telephone calls. Said expenses shall
not exceed $500 in any 30-day period of the term unless approved by an officer,
director or other authorized designee of the Company.
5. Procedure for Initiating Discussion
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In order to coordinate our efforts with respect to a possible Transaction
satisfactory to the Company, during the period of our Engagement hereunder THE
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COMPANY OR ANY REPRESENTATIVE WILL USE ITS BEST EFFORTS TO INITIATE DISCUSSIONS
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REGARDING A TRANSACTION EXCEPT THROUGH KNIGHTSBRIDGE. In the event the Company
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or its management receives an inquiry regarding a Transaction, it will promptly
advise Knightsbridge of such inquiry in order that Knightsbridge may evaluate
such prospective purchaser and its interest and assist the Company in any
resulting negotiations.
6. Post-Termination Notice
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In addition, if at any time prior to 12 months after the termination or
expiration of this Engagement Letter a Transaction is consummated, or if at any
time prior to 24 months after the termination or expiration of this Engagement
Letter a Transaction is consummated with any party contacted regarding a
Transaction during the period of this Engagement, Company will provide to
Knightsbridge with written notice of the parties contacted by Knightsbridge
regarding a Transaction during the period of this Engagement.
7. Non-Exclusivity of Knightsbridge Services
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It is understood and acknowledged by the Company that Knightsbridge
presently has, and anticipates having throughout the Engagement Term, other
clients for which it performs the same or similar services to those to be
performed in accordance herewith, and that Knightsbridge shall be under no
obligation under this Engagement to restrict its ability in any way to perform
services for any other clients. It is further acknowledged that, by virtue of
the nature of the services to be performed by Knightsbridge hereunder, the value
of such services bear no relation necessarily to the amount of time invested on
the part of Knightsbridge to the performance of such services, and
Knightsbridge, therefore, shall be under a continuing obligation hereunder to
devote only as much time to the performance of its services hereunder as deemed
appropriate in the exclusive discretion of its principle(s). ADDITIONALLY, IT
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IS ACKNOWLEDGED BY KNIGHTSBRIDGE THAT THE COMPANY SHALL HAVE THE RIGHT TO EMPLOY
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OTHER FIRMS AND CONSULTANTS AND THE NON-EXCLUSIVITY OF THE SERVICES TO BE
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PROVIDED BY KNIGHTSBRIDGE SHALL BE MUTUAL.
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8. Role of Finder
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In connection with any Financing Transactions hereunder, the Company
acknowledges that Knightsbridge is not a registered broker-dealer under Section
15A of the U.S. Securities and Exchange Act of 1934, or any similar state law,
and that Knightsbridge cannot, and shall not be required hereunder to, engage in
the offer or sale of securities for or on behalf of the Company. While
Knightsbridge has pre-existing relationships and contacts with various
investors, registered brokers-dealers and investment funds, Knightsbridge's
participation in any actual or proposed offer or sale of Company securities
shall be limited to that of an advisor to the Company, and if applicable, a
"finder" of investors, broker-dealers and/or funds. The Company acknowledges
and agrees that the solicitation and consummation of any purchases of the
Company's securities shall be handled by the Company or one or more NASD member
firms engaged by the Company for such purposes.
9. Referral Fees
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Any referral fees payable in connection wi0th any Compensable Transactions
shall be the exclusive responsibility of, and shall be paid by Knightsbridge.
10. Cooperation by Company
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In order to enable Knightsbridge to provide the services requested, the
Company agrees to provide to Knightsbridge, among other things, all information
reasonably requested or required by Knightsbridge including without limitation
information concerning historical and projected financial results with respect
to the Company and its subsidiaries and possible and known litigious,
environmental and contingent liabilities. The Company also agrees to make
available to Knightsbridge such representatives of the Company, including among
others, directors, officers, employees, outside counsel and independent
certified accountants, as Knightsbridge may reasonably request.
11. Reliance by Knightsbridge on Accuracy of Information: 12(b)5
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Representation.
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The Company recognizes and acknowledges that, in advising the Company and
in fulfilling the Engagement hereunder, Knightsbridge will use and rely on data,
material and other information furnished to Knightsbridge by the Company. The
Company agrees that Knightsbridge may do so without independently verifying the
accuracy or completeness of such data, material or other information. The
Company represents
and warrants that any such data, material or information shall be true and
accurate and shall not, as of the time communicated, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
12. Confidentiality
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If any of the data, material or other information is non-public or
confidential when revealed or otherwise shared with representatives of
Knightsbridge, and identified in writing as such at the time it is revealed or
shared ("Confidential Information"), Knightsbridge and its officers, directors,
employees, agents and associates shall hold all Confidential Information in
complete and strict confidence and will not, without prior written consent of
the Company, in each instance, disclose any Confidential Information, in whole
or part, to any other person or for any other purpose than is expressly approved
by the Company in writing. To the extent that disclosure of Confidential
Information is approved by the Company in writing, excepting information
required to be disclosed by legal process, law or regulation. Knightsbridge
agrees that each party or individual to whom such disclosure is made shall be
informed of the confidential nature of the information disclosed and be
obligated to sign standard non-disclosure agreements.
13. Indemnification
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Each party (an "Indemnifying Party") hereby agrees to indemnify and hold
the other party and its respective affiliates, directors, officers, employees
and agents (collectively "Indemnified Parties") harmless from, and to reimburse
each of the Indemnified Parties for, any loss, damage, deficiency, claim,
obligation, suit, action, fee, cost or expense of any nature whatsoever
(including, but not limited to, reasonable attorney's fees and costs) arising
out of, based upon or resulting from any breach of any of the representations,
warranties, covenants, agreements or undertakings of the Indemnifying Party
contained in or made pursuant to this Engagement Letter.
14. Miscellaneous
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a. This Engagement Letter constitutes the entire agreement and
understanding of the parties hereto, and supersedes any and all
previous agreements and understandings, whether oral or written,
between the parties with respect to the matters set forth herein.
b. Any notice or communication permitted or required hereunder shall
be in writing and shall be deemed sufficiently given if
hand-delivered via courier or overnight service or sent (i)
postage prepaid by registered mail, returned receipt requested,
to the respective parties as set forth below, or to such other
address as either party may notify the other of in writing:
If to Knightsbridge, to: Knightsbridge Holdings, LLC
0000 XX 000xx Xxxxxx, Xxxxxxxxx 0
Xxxxxxxx, Xx 00000
Attn: Xx. Xxxxx Xxxxxxxxx
Fax (000) 000-0000
If to the Company, to: TransWorld Benefits, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxxx Seven, President
Fax (000) 000-0000
c. This Engagement Letter shall be binding upon and insure to the
benefit of each of the parties hereto and their respective
successors, legal representatives and assigns.
d. The Company represents that it has the power to enter into this
Engagement Letter and to carry out its obligations hereunder.
This Engagement Letter constitutes the valid and binding
obligation of the Company and is enforceable in accordance with
its terms. The Company further represents that this Engagement
Letter does not conflict with or breach any agreement to which it
is subject or by which it is bound.
e. This Engagement Letter may be executed in any number of
counterparts, each of which together shall constitute one and the
same original document.
f. No provision of this Engagement Letter may be amended, modified
or waived, except in writing signed by all of the parties hereto.
g. This Engagement Letter shall be construed in accordance with and
governed by the laws of the State of Florida, without giving
effect to its conflict of law principles. The parties hereby
agree that any dispute which may arise between them arising out
of or in connection with this Engagement Letter shall be
adjudicated before a court located in Dade County, Florida and of
the federal courts in the Southern District of Florida with
respect to any action or legal proceeding commenced by any party.
Company agrees to waive a trial by jury for any dispute requiring
adjudication before a court of law.
h. The Company hereby acknowledges that it shall bear the burden of
proof in any action or proceeding involving a claim by
Knightsbridge to any Additional Compensation due hereunder
arising out of any Compensable Event involving a third party
claimed by Knightsbridge to have been originally introduced to
the Company by Knightsbridge.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
(SIGNATURE PAGE TO FOLLOW)
If the foregoing correctly sets forth the understanding between Knightsbridge
and the Company with respect to the foregoing, please do indicate by signing in
the place provided below, at which time this Engagement Letter shall become a
binding agreement.
KNIGHTSBRIDGE Holdings, LLC
By:
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Xxxxxx Press, President
For the Managing Member
Accepted and Agreed:
[TRANSWORLD BENEFITS, INC.]
By: /s/ Xxxxxxx X. Seven
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Name: Xxxxxxx X. Seven
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Title: CEO
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