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Exhibit 10.3
AGREEMENT
This AGREEMENT is made as of August 28, 1998, by and among
INTER-ATLANTIC SECURITIES CORPORATION, a Delaware corporation
("Inter-Atlantic"), GCA Ltd. a Bermuda corporation ("GCA"), and Global Capital
Access, Ltd., a Bermuda corporation (the "Operating Company").
BACKGROUND
GCA and the Operating Company were incorporated in August 1998, and
neither has an operating history. GCA intends to engage in the business of
providing financial guaranty insurance and reinsurance and expects to conduct
substantially all of its operations through the Operating Company.
Inter-Atlantic is willing to provide assistance to GCA and the
Operating Company in connection with the proposed initial public offering and
any concurrent private placements of common shares of GCA (the "Offering"),
subject to the terms of this Agreement.
GCA and the Operating Company desire to engage Inter-Atlantic in
connection with the Offering, subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained, the parties hereto, intending
to be legally bound, hereby agree as follows:
SECTION 1. ENGAGEMENT OF INTER-ATLANTIC.
(a) GCA and the Operating Company hereby engage Inter-Atlantic to assist
with the Offering and certain other matters and in connection therewith, to
provide the services set forth in Section 1(b) of this Agreement, subject to the
supervision and direction of GCA's Board of Directors (the "Board").
Inter-Atlantic hereby accepts such engagement on the terms and conditions
hereinafter set forth.
(b) Inter-Atlantic shall perform or supervise the performance by others of
the following services in connection with the Offering, as may be requested by
GCA or the Operating Company from time to time:
(1) assist GCA in preparing or causing to be prepared a registration
statement registering the Offering under the Securities Act of 1933, as amended,
and all applicable state and federal securities laws;
(2) assist GCA in retaining such underwriters (the "Underwriters")
as may be necessary or desirable in connection with the Offering;
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(3) assist GCA in identifying potential investors in and negotiating
the terms of any private placements;
(4) incur in the name of GCA or the Operating Company, as agent, or
in the name of Inter-Atlantic, and pay, all reasonable costs and expenses
related to the Offering;
(5) assist GCA and the Operating Company in engaging such legal
counsel, independent auditors and other third parties as may be necessary or
desirable in connection with the foregoing;
(6) prepare regular reports to the Board describing the status of
the Offering; and
(7) upon Board authorization or as otherwise deemed appropriate by
Inter-Atlantic, perform additional services relating to any of the foregoing or
to the Offering.
SECTION 2. FEES AND EXPENSE REIMBURSEMENTS.
(a) Fee Payment. Upon the closing of the Offering, GCA and the Operating
Company shall, in addition to the other amounts payable hereunder, pay
Inter-Atlantic a fee equal to US$3,900,000 by wire transfer pursuant to
instructions previously given to GCA and the Operating Company for that purpose.
Unless otherwise extended by mutual agreement among Inter-Atlantic and GCA and
the Operating Company, in the event the closing of the Offering does not occur
by March 31, 1999, no fee shall be owed by GCA and the Operating Company to
Inter-Atlantic pursuant to this Section 2(a).
(b) Expense Reimbursements.
(1) GCA and the Operating Company shall reimburse Inter-Atlantic
for all reasonable costs and expenses incurred by Inter-Atlantic, whether
incurred before or after the date hereof, in connection with the performance of
the services contemplated by this Agreement, including, without limitation, fees
and disbursements paid in accordance with Section 1(b)(4) hereof to
third-parties retained by Inter-Atlantic (including out-of-pocket expenses that
may be incurred by American Capital Access Service Corporation or any other
consultant retained by Inter-Atlantic) to assist in the Offering, and fees
charged by third-parties in connection with any filing, notification, consent,
approval or authorization made or obtained by Inter-Atlantic in connection with
the Offering; provided that if the Offering has not been consummated by March
31, 1999, GCA and the Operating Company shall not be obligated to reimburse
Inter-Atlantic for any such costs or expenses incurred.
(2) With respect to costs and expenses incurred by Inter-Atlantic in
connection with the performance of the services contemplated by Section 1(b) of
this Agreement, Inter-Atlantic shall deliver to the Board an itemized statement
(the "Closing Statement") of such costs and expenses five business days prior to
the scheduled closing of the Offering. The Closing Statement should attach
copies of material invoices received by Inter-Atlantic with regard to such costs
and expenses. The Closing Statement shall include Inter-Atlantic's
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reasonable estimate of all costs and expenses expected to be incurred after the
delivery of such statement and through to the closing of the Offering. GCA and
the Operating Company shall pay Inter-Atlantic the amount set forth on the
Closing Statement at the closing of the Offering.
(3) The Board shall promptly notify Inter-Atlantic of any objection
to the Closing Statement, and the parties shall negotiate in good faith to
resolve any such objection. If the parties fail to resolve such disputed matter
within ten business days after receipt by Inter-Atlantic of notice of the
Board's objection, then any such disputed matter may, at the election of either
party, be submitted to and resolved by KPMG Peat Marwick. The fees and expenses
of such accounting firm incurred in resolving the disputed matter shall be
equitably apportioned by such accounting firm based upon the extent to which GCA
and the Operating Company, on the one hand, or Inter-Atlantic, on the other
hand, are determined by such accounting firm to be the prevailing party.
(c) This Section 2 shall survive the termination of this Agreement.
SECTION 3. TERM.
This Agreement shall commence on the date hereof and shall expire on
the earlier of: (i) March 31, 1999 or (ii) the closing of the Offering.
SECTION 4. LIMITATION OF LIABILITY OF INTER-ATLANTIC.
The duties of Inter-Atlantic shall be confined to those expressly
set forth herein, and no implied duties are assumed by or may be asserted
against Inter-Atlantic hereunder. Inter-Atlantic shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any act or
omission in carrying out its duties hereunder, except a loss resulting solely
from Inter-Atlantic's willful misfeasance or gross negligence.
SECTION 5. INDEMNITY.
(a) GCA and the Operating Company shall indemnify, defend and hold harmless
Inter-Atlantic and its officers, directors, shareholders, employees, agents,
representatives and affiliates ("Inter-Atlantic Indemnities") against and in
respect of any and all losses, costs, expenses (including, without limitation,
costs of investigation and defense and reasonable attorneys' fees), claims,
damages, obligations and liabilities (collectively, "Damages") arising out of,
based upon or otherwise in respect of the Offering or the operation by GCA and
the Operating Company of their businesses, or related to this Agreement or the
performance by Inter-Atlantic or any party retained by Inter-Atlantic thereof,
except to the extent that any such Damages result solely from the willful
misfeasance or gross negligence of one or more Inter-Atlantic Indemnities.
(b) Inter-Atlantic shall indemnify, defend and hold harmless GCA and the
Operating Company and their officers, directors, shareholders, employees,
agents, representatives and affiliates against and in respect of any and all
Damages to the extent arising out of, based upon or otherwise in respect of
Inter-Atlantic's willful misfeasance or gross negligence in connection with
Inter-Atlantic's performance of this Agreement.
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(c) This Section 5 shall survive the termination of this Agreement.
SECTION 6. MISCELLANEOUS.
(a) Notices. All notices, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given (i) when
delivered by hand (with written confirmation of receipt), (ii) when sent by
telecopier (with written confirmation of successful transmission), provided that
a copy is mailed by certified or registered mail, postage prepaid, return
receipt requested or (iii) two business days following deposit thereof (with all
postage and other fees paid) with a nationally recognized overnight delivery
service, in each case to the appropriate addresses and telecopier numbers, as
applicable, set forth below (or to such other addresses and telecopier numbers
as a party may designate by notice to the other parties):
To Inter-Atlantic:
Inter-Atlantic Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx, Managing Director
To GCA:
GCA Ltd.
Xxxxxxxx Xxxx, Victoria Street
X.X. Xxx XX 0000
Xxxxxxxx, XX XX, Xxxxxxx
Xxxx.: Xxxxxx X. Xxxxxxxx, Chairman of the Board
and Chief Executive Officer
To the Operating Company:
Global Capital Access, Ltd.
Xxxxxxxx Xxxx, Xxxxxxxx Street
X.X. Xxx XX 0000
Xxxxxxxx, XX XX, Xxxxxxx
Xxxx.: Xxxxxx X. Xxxxxxxx, Chairman of the Board
and Chief Executive Officer
(b) Assignment and Benefit. This Agreement or any rights hereunder may not
be assigned by GCA or the Operating Company, nor may GCA or the Operating
Company delegate any obligations hereunder, without the prior written consent of
Inter-Atlantic. Inter-Atlantic shall have the right to assign this Agreement or
any rights hereunder to Inter-Atlantic Capital Partners, Inc. and to the
successors and assigns of Inter-Atlantic Capital Partners, Inc. Subject to the
foregoing, this Agreement and the rights and obligations contained herein shall
inure to the
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benefit of, and be binding upon, the parties hereto and each of their respective
successors and assigns. This Agreement shall not be construed as giving any
person, other than the parties hereto and their successors and assigns, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any of the provisions herein contained, this Agreement and all provisions and
conditions hereof being intended to be, and being, for the sole and exclusive
benefit of such parties, successors and assigns and for the benefit of no other
person or entity.
(c) Amendment and Waiver. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
Neither the failure nor any delay by any party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, no claim or right arising out of this
Agreement can be waived by a party, in whole or in part, except in a writing
signed by such party. The waiver by a party of any breach of any provision of
this Agreement shall not constitute or operate as a waiver of any other breach
of such provision or of any other provision hereof, nor shall any failure to
enforce any provision hereof operate as a waiver of such provision or of any
other provision hereof.
(d) Governing Law. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the laws of the Islands of Bermuda,
without giving effect to otherwise applicable principles of conflicts of law.
(e) Severability. The invalidity or unenforceability of any particular
provision, or part of any provision, of this Agreement shall not affect the
other provisions or parts hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provisions or parts were omitted.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original; and any person may
become a party hereto by executing a counterpart hereof, but all of such
counterparts together shall be deemed to be one and the same instrument. It
shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
(g) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter of this Agreement
and supersedes all prior agreements and understandings with respect to the
subject matter hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused its duly
authorized representatives to execute this Agreement, all as of the date first
above written.
INTER-ATLANTIC SECURITIES CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
GCA LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
___________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
GLOBAL CAPITAL ACCESS, LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
___________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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