Maroon Bells Capital Partners, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxxx 00000
Tel: 000-000-0000 Fax: 000-000-0000
Maroon Bells Capital Partners, Inc. Advisory Agreement For
WorldPort Communications, Inc.
This Agreement, when executed by both parties, will represent an exclusive
Agreement between Maroon Bells Capital Partners, Inc., a Delaware Corporation
("MBCP") and WorldPort communications, Inc. ("WorldPort") for the twelve month
period commencing March 7, 1997. During the aforesaid 12-month period (and
during subsequent period, if any pursuant to the renewal provisions of this
Agreement), MBCP will perform certain financial consulting services for
WorldPort. For the purposes of this Agreement, "MBCP" shall refer to MBCP and
its affiliates and assignees. WorldPort shall reserve the right to approve of
MBCP's affiliates and assignees. For the purposes of the Agreement, "WorldPort"
shall refer to WorldPort Communications, Inc. and its subsidiaries, if any.
i. Services to be Rendered by MBCP
MBCP will perform financial advisory services for WorldPort, including, but
not limited to, assisting WorldPort in its financial structuring, equity and
debt financing, mergers and acquisitions and corporate partnership development.
MBCP along with appropriate counsel, accountants or other professionals required
for a given transaction and approved by WorldPort, will assist WorldPort in the
preparation of documentation and financial analysis required to complete the
financial transactions referred to in the previous sentence. Such documentation
may include business plans, business valuations, promotional materials,
prospectuses, press releases and any other corporate financial and public
relations documents that are deemed necessary by mutual agreement of WorldPort
and MBCP.
MBCP will act in good faith to develop the business of WorldPort as it would its
own business and to offer WorldPort advice in areas where the professionals of
MBCP hold expertise.
MBCP/WorldPort Advisory Agreement
March 7, 1997; Page 2
II. Fees for Services Rendered
A. Retainer:
As compensation for its efforts in preparing documentation as described
above, conducting required due diligence and financial analysis, and
contributing business development recommendations to WorldPort on a regular
basis, WorldPort agrees to pay MBCP $10,000 on the first day of the first month
following the signing of this Agreement and thereafter on the first day of every
month that this Agreement is in effect. In consideration of WorldPort's
financial status at the time of execution of this Agreement, MBCP agrees to
accrue this retainer (i.e. $10,000.00 per month) until such time as WorldPort
has received cumulative gross proceeds of $5 million dollars in equity
financing, whereupon WorldPort will pay to MBCP all accrued retainer fees as of
the date, and all monthly retainers that subsequently become due. WorldPort
acknowledges that as of the date of this Agreement, WorldPort has raised $2.5
million of the $5 million in gross proceeds described in the preceding sentence.
B. Equity Financing Success Fee:
MBCP will assist WorldPort to obtain equity financing as required by WorldPort
under terms and conditions approved by WorldPort. In advance of any such equity
financing in which WorldPort requests the assistance of MBCP, WorldPort and MBCP
will agree upon a flat fee to be paid to MBCP as compensation for MBCP's
assistance in structuring and obtaining such financing. The flat fee may include
a combination of cash and stock purchase warrants, to be agreed upon in advance
by MBCP and WorldPort, and shall be paid upon the closing of such equity
financing.
C. Debt Financing Success Fee:
MBCP will assist WorldPort to obtain debt or project financing as required by
WorldPort under terms and conditions approved by WorldPort. For debt or project
financing received by WorldPort with the direct assistance of MBCP or from a
source introduced to WorldPort by MBCP, WorldPort will pay MBCP immediately at
the close of such debt or project financing in cash equal to 1.5% of the gross
proceeds from the financing.
D. Merger and Acquisition Success Fee:
MBCP will assist WorldPort in mergers and acquisitions wherein WorldPort either
acquires control of another corporate entity or sells control in WorldPort to
another corporate entity. For such transactions conducted with the assistance of
MBCP, WorldPort will pay to MBCP immediately at the close an M&A Success Fee
consisting of a (a) $100,000.00 (one hundred thousand dollars) in cash, and (b)
a Xxxxxx formula (5% of the 1st million, 4% of the second million, 3% of the
third million, 2% of the fourth million, 1% of all amounts thereafter) for the
cash or cash equivalent value of the transaction, except as otherwise agreed to
by MBCP and WorldPort. All M&A Success Fees described herein are payable in cash
at the closing of each such transaction.
E. Currency:
All cash fees paid to MBCP by WorldPort according to the terms of this Agreement
will be paid to MBCP in U.S. Dollars, except as otherwise designated in advance
by MBCP.
III. Expenses
WorldPort agrees to reimburse MBCP for reasonable and necessary out-of-pocket
expenses related to MBCP's performance of the services described in this
Agreement (i.e. pre-approved domestic United States and international travel and
lodging for MBCP professionals to destinations where WorldPort has requested the
presence of MBCP professionals; reasonable and necessary out-of-pocket costs
related to due diligence, offering documents, marketing materials, etc.).
WorldPort acknowledges that prior to the execution of this Agreement, MBCP has
incurred $68,276.96 in reasonable out-of-pocket expenses on behalf of WorldPort
and WorldPort agrees to reimburse at least fifty percent (50%) this amount to
MBCP upon the execution of this Agreement, with the balance to be paid by
WorldPort at the earlier of (a) when WorldPort has received, on a cumulative
basis, $5,000,000.00 in gross proceeds from debt or equity financings
($2,500,000.00 of which has been received by WorldPort as of the date of this
Agreement) or (b) when WorldPort's financial status warrants and enables the
repayment of the balance of the MBCP accrued expenses.
IV. MBCP Equity Incentive
WorldPort acknowledges that its Board of Directors may in the future implement a
performance-based equity incentive plan, whereby MBCP (and other advisors and
agents) may earn equity in WorldPort upon achieving certain business development
and growth goals delineated by the Board. WorldPort agrees that MBCP may be
compensated and earn equity in WorldPort both through this Agreement and through
provisions of any such performance incentive plan that may be implemented by the
Board, without conflict.
V. Term of Agreement
The term of the Agreement shall be for a 12-month period, commencing upon the
execution of this Agreement. This Agreement shall automatically be renewed for
an additional 12-month period unless terminated by either party, upon written
notice to the other party given prior to the expiration of any applicable
12-month period. Changes in the terms and conditions of this Agreement may be
enacted only with the written consent of both parties.
VI. Indemnification
In consideration of this Agreement, WorldPort hereby agrees to indemnify and
hold harmless MBCP and its affiliates, the respective directors, officers,
principals, partners, agents and employees of MBCP and its affiliates from any
and all losses, claims, damages or liabilities (or actions in respect thereof)
related to or arising out of WorldPort's actions or omissions taken or omitted
in good faith in connection with this engagement save and except for any claims,
liabilities, losses, damages or expenses that result solely from bad faith,
gross negligence or willful misconduct by MBCP or any of its affiliates or
approved assignees. WorldPort will also reimburse MBCP for all reasonable
expenses (including legal fees) as they are incurred by MBCP in connection with
pending or threatened litigation arising out of this agreement in which MBCP is
a party and for which WorldPort is obligated to indemnify MBCP pursuant to the
preceding sentence.
MBCP hereby represents and warrants that during the course of its engagement it
will not knowingly make any misstatement of material fact or omit to state any
material fact necessary to make any statement not misleading, to induce an
investor to purchase WorldPort's securities, nor will MBCP take any action
deemed to be a general solicitation of securities other than in connection with
the transaction contemplated pursuant to this engagement agreement. MBCP hereby
agrees to indemnify, defend, and hold harmless WorldPort and its directors,
officers, agents and employees from any and all losses, claims, damages or
liabilites (or actions in respect thereof) related to or arising out of a breach
by MBCP of the representations and warranties made in the preceeding sentence or
by any act of gross negligence or intentional misconduct on the part of MBCP or
its principals, directors, and employees.
MBCP and WorldPort, and in particular the signatories hereto, affirm that they
each have all requisite corporate authority to execute and deliver this
engagement agreement for the services contemplated herein, and the execution and
delivery of this engagement letter by MBCP and WorldPort and the engagement for
performance of services contemplated herein does not constitute a material
breach or violate the provisions of any agreement, engagement, law, rule,
regulation, or court order to which MBCP or WorldPort or any of their respective
assets, properties, or representatives are bound.
VII. Arbitration
This engagement agreement is governed and construed under the laws of the United
States, and specifically the State of California. Any controversy or claim
arising out of or relating to this Agreement, or Breech thereof, shall be
settled by arbitration in California, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and the judgment upon
the award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Such arbitration shall be held within sixty days after
Notice of Arbitration is served on either party and the prevailing party shall
be entitled to recover its reasonable legal fees and the costs of arbitration
from the other party.
VIII. Termination; Survivorship Rights for MBCP
This Agreement may be terminated by WorldPort or by MBCP at any time, with or
without cause, with sixty (60) days written notice to that effect by the
terminating party. If MBCP is terminated by WorldPort without cause MBCP will be
entitled to the compensation described in this agreement when and if WorldPort
receives proceeds or contributions within eighteen months of such termination
from (a) one or more corporate partners, equity investors, or debt financing
providers directly introduced to WorldPort by MBCP, or (b) an equity financing
conducted by an underwriter or third party investment banking firm directly
introduced to WorldPort by MBCP, or (c) a merger or acquisition (including the
sale of any or all of WorldPort or its assets) completed with a party introduced
to WorldPort by MBCP, or any combination of (a), (b) and (c).
MBCP/WorldPort Advisory Agreement
March 7, 1997; Page 5
IX. Entire Agreement
This Agreement constitutes the entire Agreement between MBCP and WorldPort
relating to the subject matter set forth herein and supersedes any prior
agreement between such parties relating to the subject matter set forth herein.
X. Signatures
By their signatures below, the parties agree to be bound by the terms,
conditions, and obligations detailed above, effective upon the Closing.
ACCEPTED FOR WORLDPORT COMMUNICATIONS, INC.:
/s/Xxxxxx X. Xxxxxx Date: March 7, 1997
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Xxxxxx X. Xxxxxx
Chief Executive Officer
ACCEPTED FOR MAROON BELLS CAPITAL PARTNERS, INC. BY:
/s/ Xxxxxxxx X. Xxxxxxxxx Date: March 7, 1997
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Name: Xxxxxxxx X. Xxxxxxxxx
Its: Principal
