Exhibit 99.5
December 4, 1998
PRIVATE AND CONFIDENTIAL
Cellular Communications International, Inc.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Chairman, Chief Executive Officer and President
Gentlemen:
This letter agreement (the "Agreement") confirms our understanding that
Cellular Communications International, Inc. (the "Company") has engaged
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("DLJ") to act as its
financial advisor with respect to the sale, merger, consolidation or any other
business combination, in one or a series of transactions, involving all or a
substantial amount of the business, securities or assets of the Company (each, a
"Transaction") to OliMan Holding B.V., a joint venture currently formed by or at
the direction of OliMan. We understand the company has also engaged Xxxxxxxxxxx
Xxxxxxx & Co., Inc. to act as financial advisor with respect to a Transaction
under a separate engagement letter dated December 4, 1998.
As discussed, we propose to undertake certain services on your behalf,
to the extent requested by you, which shall consist of following: (i) study and
evaluate the Company and its business prospects, (ii) identify and analyze the
financial alternatives available to the Company, (iii) develop the strategy and
tactics to be used in evaluating these alternatives in the market, (iv) provide
analysis and advice in connection with a Transaction, as directed by the
Company, assist in the negotiation of a definitive agreement with OliMan and (v)
provide such other financial advisory services as may from time to time be
specifically agreed upon in writing by DLJ.
Cellular Communications International, Inc.
December 4, 1998
Page 2
As compensation for the services to be provided by DLJ hereunder, the
Company agrees (i) to pay to DLJ (a) a fee of $100,000 payable promptly upon
execution of an agreement in principle or a definitive agreement to effect a
Transaction and (b) additional cash compensation as set forth below and (ii)
upon request by DLJ from time to time, to reimburse DLJ promptly for all
out-of-pocket expenses (including the reasonable fees and expenses of counsel)
incurred by DLJ in connection with its engagement hereunder, whether or not a
Transaction is consummated. As DLJ will be acting on your behalf, the Company
agrees to the indemnification and other obligations set forth in Schedule I
attached hereto, which Schedule is an integral part hereof.
The additional cash compensation referred to in clause (i)(b) above
shall be in an amount equal to $1,500,000 payable in cash at consummation of a
Transaction.
For purposes of this Agreement, a Transaction shall be deemed to have
been consummated upon the earliest of any of the following events to occur: (a)
the acquisition by another person of a majority of the Company calculated on a
fully-diluted basis; (b) a merger or consolidation of the Company or an
affiliate of the Company with another person; (c) the acquisition by another
person of assets of the Company representing a majority of the Company's book
value; or (d) in the case of any other Transaction, the consummation thereof.
The Company shall make available to DLJ all financial and other
information concerning its business and operations that DLJ reasonably requests
as well as any other information relating to any Transaction prepared by the
Company or any of its other advisors. In performing its services hereunder DLJ
shall be entitled to rely without investigation upon all information that is
available from public sources as well as all other information supplied to it by
or on behalf of the Company or its advisors or an acquiror or potential acquiror
or its advisors and shall not in any respect be responsible for the accuracy or
completeness of, or have any obligation to verify, the same or to conduct any
appraisal of assets or liabilities. To the extent consistent with legal
requirements, all information given to DLJ by the Company, unless publicly
available or otherwise available to DLJ without restriction or breach of any
confidentiality agreement, will be held by DLJ in confidence and will not be
disclosed to anyone other than DLJ's agents and advisors without the Company's
prior approval or used for any purpose other than those referred to in this
Agreement.
Cellular Communications International, Inc.
December 4, 1998
Page 3
Any advice, written or oral, provided by DLJ pursuant to this Agreement
will be treated by the Company as confidential, will be solely for the
information and assistance of the Company in connection with its consideration
of the Transaction and will not be reproduced, summarized, described or referred
to, or furnished to any other party or used for any other purpose, except in
each case with our prior written consent.
In order to coordinate our efforts with respect to a possible
Transaction satisfactory to the Company, during the period of our engagement
hereunder neither the Company nor any representative thereof (other than DLJ)
will initiate discussions regarding a Transaction except through DLJ or
Xxxxxxxxxxx Xxxxxxx & Co., Inc. (the "Advisors"). In the event the Company or
its management receives an inquiry regarding a Transaction, it will promptly
advise the Advisors of such inquiry in order that we may evaluate such
prospective purchaser and its interest and assist the Company in any resulting
negotiations.
This Agreement may be terminated by either the Company or DLJ upon
receipt of written notice to that effect by the other party. Upon any
termination or expiration of this Agreement, DLJ will be entitled to prompt
payment of all fees accrued prior to such termination or expiration and
reimbursement of all out-of-pocket expenses as described above. The indemnity
and other provisions contained in Schedule I will also remain operative and in
full force and effect regardless of any termination or expiration of this
Agreement.
In addition, if at any time prior to 12 months after the termination
DLJ will be entitled to payment in full of the compensation described in the
fourth paragraph of this Agreement. It is understood that if the Company
completes a transaction in lieu of any Transaction, either during the term of
this Agreement or at any time prior to 12 months after termination by the
Company of this Agreement, for which DLJ is entitled to compensation pursuant to
this Agreement (including, but not limited to, a recapitalization or a partial
or complete liquidation), DLJ and the Company will in good faith mutually agree
upon acceptable compensation for DLJ taking into account, among other things,
the results obtained and the custom and practice of investment bankers of
international standing acting in similar transactions.
Cellular Communications International, Inc.
December 4, 1998
Page 4
The Company further agrees that it will not enter into any transaction
referred to in either of the two preceding paragraphs unless, prior to or
simultaneously with such transaction, adequate provision is made with respect to
the payment of compensation to DLJ as contemplated by such paragraphs.
Please note that DLJ is a full services securities firm engaged in
securities trading and brokerage activities, as well as providing investment
banking and financial advisory services. In the ordinary course of our trading
and brokerage activities, DLJ or its affiliates may at any time hold long or
short positions, and may trade or otherwise effect transactions, for our own
account or on the accounts of customers, in debt or equity securities or bank or
other senior debt of the Company or other entities that may be involved in the
Transaction. We recognize our responsibility for compliance with Federal laws in
connection with any such activities.
The Company acknowledges and agrees that DLJ has been retained solely
to provide the advice or services set forth in this Agreement. DLJ shall act as
an independent contractor, and any duties of DLJ arising out of its engagement
hereunder shall be owed solely to the Company.
This Agreement shall be binding upon and inure to the benefit of the
Company. DLJ, each Indemnified Person (as defined in Schedule I) and their
respective successors and assigns.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
The Company irrevocably and unconditionally submits to the exclusive
jurisdiction of any State or Federal court sitting in New York City over any
suit, action or proceeding arising out of or relating to this letter (including
Schedule I). The Company hereby agrees that service of any process, summons,
notice or document by U.S. registered mail addressed to the Company shall be
effective service of process for any action, suit or proceeding brought in any
such court. The Company irrevocably and unconditionally waives any objection to
the laying of venue of any such suit,
Cellular Communications International, Inc.
December 4, 1998
Page 5
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. The Company agrees that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts to whose jurisdiction the
Company is or may be subject, by suit upon such judgment. The prevailing party
in any suit, action or proceeding arising out of or relating to this Agreement
shall be entitled to recover from the non-prevailing party all of the attorney
fees and other expenses the prevailing party may incur in such suit, action or
proceeding and in any subsequent suit to enforce a judgment.
If any term, provision, covenant or restriction contained in this
Agreement, including Schedule I, is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
After reviewing this Agreement, please confirm that the foregoing is in
accordance with your understanding by signing and returning to me the duplicate
of this letter attached hereto, whereupon it shall be our binding Agreement.
Very truly yours,
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
---------------------------------
Xxxxxxx X. Xxxxxxxx
Managing Director
Accepted and agreed to
this ____ day of December, 1998
Cellular Communications International, Inc.
By:
-----------------------------------------------------
Xxxxxxx Xxxxxxxx
Chairman, Chief Executive Officer and President
SCHEDULE I
This Schedule I is a part of and is Incorporated into that certain
letter agreement (together, the "Agreement"), dated December 4, 1998 by and
between Cellular Communications International, Inc. (the "Company") and
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("DLJ").
The Company agrees to indemnify and hold harmless DLJ and its
affiliates, and the respective directors, officers, agents and employees of DLJ
and its affiliates (DLJ and each such entity or person, an "Indemnified Person")
from and against any losses, claims, damages, judgments, assessments, costs and
other liabilities (collectively "Liabilities"), and will reimburse each
Indemnified Person for all fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, "Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation or arbitration and whether or not any Indemnified Person is a party
(collectively, "Actions"), arising out of or in connection with advice or
services rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Indemnified Person's
actions or inactions in connection with any such advice, services or
transactions; provided that the Company will not be responsible for any
Liabilities or Expenses of any Indemnified Person that are determined by a
judgment of a court of competent jurisdiction which is no longer subject to
appeal or further review to have resulted solely from such Indemnified Person's
gross negligence or willful misconduct in connection with any of the advice,
actions, inactions or services referred to above. The Company also agrees to
reimburse each Indemnified Person for all Expenses as they are incurred in
connection with enforcing such Indemnified Person's rights under this Agreement
(including, without limitation, its rights under this Schedule I).
Upon receipt by an Indemnified Person of actual notice of an Action
against such Indemnified Person with respect to which indemnity may be sought
under this Agreement, such Indemnified Person shall promptly notify the Company
in writing; provided that failure so to notify the Company shall not relieve the
Company from any liability which the Company may have on account of this
indemnity or otherwise, except to the extent the Company shall have been
materially prejudiced by such failure. The Company shall, if requested by DLJ,
assume the defense of any such Action including the employment of counsel
reasonably satisfactory to DLJ. Any Indemnified Person shall have the right to
employ separate counsel in any such Action and participate in the defense
thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person, unless: (i) the
Company has failed promptly to assume the defense and employ counsel or (ii) the
named parties to any such Action (including any impleaded parties) include such
Indemnified Person and the Company, and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the Company;
provided that the Company shall not in such event be responsible hereunder for
the fees and expenses of more than one firm of separate counsel in connection
with any Action in the same jurisdiction, in addition to any local counsel. The
Company shall not be liable for any settlement of any Action effected without
its written consent. In addition, the Company will not, without prior written
consent of DLJ, settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened Action in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Person from all Liabilities arising out of such Action.
In the event that the foregoing indemnity is unavailable to an
Indemnified Person other than in accordance with this Agreement, the Company
shall contribute to the Liabilities and Expenses paid or payable by such
Indemnified Person in such proportion as is appropriate to reflect (i) the
relative benefits to the Company and its shareholders, on the one hand, and to
DLJ, on the other hand, of the matters contemplated by this Agreement or (ii) if
the allocation provided by the immediately preceding clause is not permitted by
the applicable law, not only such relative benefits but also the relative fault
of the Company, on the one hand, and DLJ, on the other hand, in connection with
the matters as to which such Liabilities or Expenses relate, as well as any
other relevant equitable considerations; provided that in no event shall the
Company contribute less than the amount necessary to ensure that all Indemnified
Persons, in the aggregate, are not liable for any Liabilities and Expenses in
excess of the amount of fees actually received by DLJ pursuant to this
Agreement. For purposes of this paragraph, the relative benefits to the Company
and its shareholders, on the one hand, and DLJ, on the other hand, of the
matters contemplated by this Agreement shall be deemed to be in the same
proportion as (a) the total value paid or contemplated to be paid or received or
contemplated to be received by the Company or the Company's shareholders, as the
case may be, in the transaction or transactions that are within the scope of
this Agreement, whether or not any such transaction is consummated, bears to (b)
the fees paid or contemplated to be paid to DLJ under this Agreement.
The Company also agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with advice or services rendered or to be rendered
by any Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Indemnified Person's actions or inactions in
connection with any such advice, services or transactions except for Liabilities
(and related Expenses) of the Company that are determined by a judgment of a
court of competent jurisdiction which is no longer subject to appeal or further
review to have resulted solely from such Indemnified Person's gross negligence
or willful misconduct in connection with any such advice, actions, inactions or
services.
The reimbursement, indemnity and contribution obligations of the
Company set forth herein shall apply to any modification of this Agreement and
shall remain in full force and effect regardless of any termination of, or the
completion of any Indemnified Person's services under or in connection with,
this Agreement.
