EXHIBIT 23.5
AGREEMENT
This agreement (the "Agreement") is entered into as of September 5, 1998
by and between Yankee Group Research, Inc. ("Yankee"), a Massachusetts
corporation having its principal place of business at 00 Xx. Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx and Xxxxx Xxxxx Xxxxxx & Company, LLC ("VBW"), a Delaware
limited liability company having its principal place of business at Xxx Xxxxxxxx
Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx.
RECITALS
WHEREAS, VBW is a registered broker dealer providing investment banking
and brokerage services to corporations, institutions, other entities and
individuals;
WHEREAS, Yankee is an information technology market assessment
consulting firm serving corporate clients; and
WHEREAS, VBW and Yankee desire to enter into a strategic alliance
pursuant to which Yankee will provide its research to VBW and assist VBW in its
brokerage, investment banking and related activities.
NOW, THEREFORE, in consideration of the mutual promises of the parties
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
1. SERVICES
a. Use of Research. Yankee will make available to VBW all of
Yankee's research services. Additionally, Yankee will provide VBW with all
Yankee work product and analysis (the "Yankee Materials"), including, without
limitation through full and unencumbered direct access to all Yankee analysts
and written research, data compilations, surveys and reports of any kind. Yankee
hereby grants to VBW the world-wide right to use, distribute, sell, resell,
reproduce, make derivative works of, publicly perform, and publicly display in
any form or medium, whether now known or later developed, Yankee Material for
the purpose of developing, distributing, marketing, selling or providing
products or services for or to the Investment Market. Such right includes,
without limitation, the right to distribute and republish all Yankee Material to
or for the Investment Market as well as to customize and reformat such Yankee
Material to or for the Investment Market as well as to customize and reformat
such Yankee Material and to include additional investment-related or other
information in such distribution or reproduction. Except as provided in Section
5 below, such right is exclusive. For purposes of this Agreement, "Investment
Market" shall mean entities and natural persons whose principal use of the
research material is for the purpose of (i) making investment decisions or (ii)
making (or advising or influencing others with respect to making) decisions
regarding the use of investment banking services such as corporate finance or
M&A. Yankee recognizes that VBW has historically distributed and intends to
continue to distribute its
research, including future research incorporating Yankee Material, to investment
banking clients and prospective clients as well as to service organizations that
influence investment banking decisions, including, without limitation, venture
capitalists, attorneys, accountants, consultants and the press. In addition,
Yankee hereby grants to VBW the world-wide right to distribute in any form or
medium, whether now known or later developed, Yankee Material (or any derivative
work incorporating Yankee Material) to persons involved in reporting on the
Investment Market.
b. Deliverables. Without limiting the foregoing, for no additional fees
or charges other than those provided in this Agreement:
(i) Yankee shall promptly deliver to VBW all printed Yankee
research for all technology and telecommunications topics covered by Yankee;
(ii) Yankee shall provide VBW with electronic access to "Yankee On-
Line," which includes all Yankee research plus a bulletin board of upcoming
events;
(iii) Yankee shall use its best efforts to secure free admission for
VBW employees and clients to all seminars sponsored exclusively by Yankee;
(iv) Yankee shall use its best efforts to secure free admission for
VBW employees and clients to all events co-sponsored by Yankee;
(v) Yankee shall provide VBW employees and clients with access to
all video and audio conferences sponsored by Yankee; and
(vi) Yankee shall provide VBW employees and clients with direct
access to Yankee research staff for discussions and ongoing consultations,
including, without limitation, audio and video conferences between Yankee staff
and VBW clients, participation by Yankee staff in VBW investment conferences,
and visits by Yankee staff to VBW investor and corporate clients and prospects
with VBW's equity research, institutional sales or investment banking staff.
c. Additional Services. Yankee further agrees, for no additional fees
or charges other than those provided in this Agreement, to assist VBW in:
(i) VBW's efforts to sell, bundle and package its services to the
Investment Market;
(ii) VBW's ongoing corporate finance and M&A activities; and
(iii) VBW's ongoing company and industry sector research efforts
across the technology and telecommunications industries.
d. Space. Yankee will provide VBW with an office and nearby space
within Yankee's current headquarters, or any subsequent headquarters, sufficient
to accommodate two VBW employees (an executive and an administrative assistant)
and the use of the telephone and computer systems, reception, conference and
meeting rooms.
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e. Exclusions. Notwithstanding any provision to the contrary,
Yankee Material will not include and Yankee will not be required to provide to
VBW:
(i) Copies of proprietary consulting work performed for
individual Yankee clients; or
(ii) Information which Yankee is obligated to keep confidential
due to any fiduciary duties owed by Yankee to any third party.
2. FEES
a. Research Retainer. In consideration of the rights granted to VBW
and the other obligations of Yankee set forth in this Agreement, VBW shall make
payments to Yankee during the term of this Agreement as follows:
(i) Upon execution and delivery of this Agreement, VBW shall
pay Yankee $100,000;
(ii) Beginning with the first quarter of 1999, VBW shall pay
Yankee a quarterly research retainer equal to (x) $125,000, as increased or
decreased by (y) the percentage change in the Xxxxxxx 2000 (or a mutually
agreeable index measuring the performance of small and mid-cap technology
stocks) since January 1, 1999, as determined as of the beginning of such
quarter.
(iii) Notwithstanding the provisions of paragraph (ii) above
however, VBW shall pay Yankee a minimum of $500,000 in 1999, $600,000 in 2000
and $500,000 per year thereafter. Any Payment to be made by VBW to Yankee
pursuant to this paragraph (iii) shall be made concurrently with the fourth
quarterly payment for such year.
b. Investment Banking Fees. In addition to the amounts set forth
above, VBW agrees to pay Yankee as follows:
(i) For providing VBW with Qualified Leads not previously known
to VBW, VBW shall pay Yankee a fee equal to 1% of the Net Fees received by VBW
for any investment banking transaction completed by VBW for such Qualified Lead
during the term of this Agreement or within six months of the termination of
this Agreement. For purposes of this section, a Qualified Lead shall mean an
investment banking prospect whose CEO or CFO initiates contact with VBW or
responds to contact from VBW as a result of a referral by Yankee.
(ii) For assisting VBW in pitching its investment banking
services to a company at the request of VBW, VBW shall pay Yankee a fee equal to
1% of the Net Fees received by VBW for any investment banking transaction
completed by VBW for said company during the term of this Agreement or within
six months of the termination of this Agreement. For purposes of this section,
providing assistance in pitching investment banking services shall mean
providing such assistance as VBW may reasonably request in connection with
securing such investment banking business, including, without limitation,
assistance by Yankee staff in preparing a positioning presentation for the
company, attendance by Yankee staff
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at a presentation to the company or use by Yankee staff of its influence with
the management of the company to steer the investment banking decision in VBW's
favor.
(iii) For assisting VBW in marketing an investment banking
transaction to a prospective investor (e.g. marketing an underwriting to the
investment community or marketing an M&A idea to a prospective corporate buyer
or seller after VBW has been engaged in the transaction) at the request of VBW,
VBW shall pay Yankee a fee equal to 1% of the Net Fees received by VBW for said
investment banking transaction directly relating to any sale to such prospective
investor during the term of this Agreement or within six months of the
termination of this Agreement. For purposes of this section, providing
assistance in marketing an investment banking transaction shall mean providing
such assistance as VBW may reasonably request in connection with securing orders
or closing on investment banking transactions, including, without limitation,
participation by Yankee staff in a conference call with, or a presentation by
Yankee staff to, an investment audience in connection with an underwriting
transaction or a corporate management team in connection with an M&A
transaction.
(iv) The above fees may be awarded in combination.
(v) For purposes of this section, "Net Fees" shall mean, (x)
in the case of an M&A advisory engagement or a private placement, the gross fee,
less finders fees (other than those payable to Yankee) and unreimbursed
expenses, and (y) in the case of a public offering, the gross revenue from
selling concessions, management fees and underwriting fees, less finders fees
(other than those payable to Yankee) and net of all deal related expenses,
including, without limitation, stabilization losses.
c. Expenses. VBW shall reimburse Yankee for travel related expenses
incurred by Yankee staff at the request of VBW provided that such travel is in
accordance with VBW travel policies.
3. OVERSIGHT
a. Ongoing day-to-day relations between Yankee and VBW shall be
under the direction of a senior Yankee executive selected by Yankee and approved
by VBW, which approval will not be unreasonably withheld, and the liaison hired
by VBW. Such liaison will have an office at Yankee's headquarters and will have
access to all non-proprietary consulting Yankee meetings with vendors and other
companies meeting with Yankee analysts.
b. In addition to the day-to-day coordination between the above
individuals, Yankee senior management (CEO or President) and VBW Senior
Management (Head of Research, Head of Investment Banking, CEO or President) will
meet quarterly to review progress in the relationship and to discuss new ways of
strengthening and enhancing the relationship.
4. TERM
a. The initial term of this Agreement shall begin on the date
hereof and will remain in effect until December 31, 2000 (the "Initial Term").
Following the Initial
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Term, this Agreement shall automatically renew for consecutive one year terms
unless either party has given the other party written notice of its intent not
to renew this Agreement at least ninety (90) days prior to the end of the then-
current term.
b. This Agreement may be terminated at any time after the end of
the Initial Term by either party, for any or no reason, upon at least ninety
(90) days prior written notice. Such termination shall be effective at the end
of the quarter following the 90 day notice period.
c. If Yankee elects to not renew this Agreement pursuant to
paragraph (a) above or elects to terminate this Agreement pursuant to paragraph
(b) above, Yankee shall pay VBW a termination fee equal to the total amount paid
to Yankee by VBW during the twelve month period preceding the effective date of
the expiration or termination of this Agreement.
d. If VBW elects to not renew this Agreement pursuant to paragraph
(a) above or elects to terminate this Agreement pursuant to paragraph (b) above,
VBW shall pay Yankee a termination fee equal to the total amount paid to Yankee
by VBW during the six month period preceding the effective date of the
expiration or termination of this Agreement.
5. EXCLUSIVITY
a. During the term of this Agreement, Yankee shall not enter into
any agreement with any other bank, brokerage firm, financial advisory firm or
other party permitting such party to use, distribute, sell, resell, reproduce,
make derivative works of, publicly perform or publicly display in any form or
medium, whether now known or later developed, any Yankee Material or other
research created by Yankee for the purpose of developing, distributing,
marketing, selling or providing products or services for or to the Investment
Market. Notwithstanding the foregoing, Yankee may renew currently existing
agreements providing Yankee research to other banks, brokerage firms, financial
advisory firms or other parties for their own internal use, provided that such
internal use is specifically limited to use in credit analysis for prospective
lending transactions or to use by the internal information technology ("IT")
organizations of any such party in connection with such party's analysis of its
internal IT organizational needs and provided further such agreements
specifically prohibit the access to, or use of, such licensed Yankee Material or
other research created by Yankee by the research, sales & trading and investment
banking departments of such party. VBW acknowledges that currently existing
agreements providing Yankee Material or other research to other banks, brokerage
firms and financial advisory firms for their own internal use shall remain in
full force and effect until such agreements expire. To the extent any such
agreement includes an automatic renewal provision, Yankee shall deliver timely
notice to such third party of its intent not to renew such agreement except to
the extent such renewal is permitted hereunder.
b. Notwithstanding Section 1 above, Yankee shall be entitled to
sell Yankee Material directly to venture capitalists, attorneys, accountants,
consultants and the press.
6. CONFIDENTIALITY. Yankee acknowledges that it will from time to time
receive confidential information from VBW. Yankee agrees that it will, and will
cause each
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of its employees, contractors and other affiliates to, hold all such
confidential information in confidence and that it will not, and will cause each
of its employees, contractors and other affiliates not to, disclose any such
confidential information to any third party. Yankee further agrees that it will
inform its employees, contractors and other affiliates of their obligation not
to trade in the securities markets on the basis of such confidential
information. Confidential information will mean any information identified by
VBW as being confidential or proprietary, including, without limitation, client
lists, investment banking transactions in progress and investment
recommendations that are not yet public information. Notwithstanding the
foregoing, confidential information shall not include any information that (i)
was known to the public prior to disclosure by VBW, (ii) becomes known to the
public through no fault of Yankee or (iii) is disclosed to Yankee on a non-
confidential basis by a third party having a legal right to make such
disclosure.
7. WARRANTY AND LIMITATION OF LIABILITY. YANKEE WARRANTS THAT THE
SERVICES, OPINIONS AND MARKET ASSESSMENTS PROVIDED BY YANKEE ARE BASED ON
INFORMATION THAT IT BELIEVES IN GOOD FAITH TO BE RELIABLE AND ACCURATE AT THE
TIME PROVIDED. THIS EXPRESS WARRANTY REPLACES AND IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR APPLICATION OR USE. VBW FURTHER ACKNOWLEDGES THAT
THE SERVICES ARE NOT INTENDED TO SERVE AS A BASIS FOR MAKING INVESTMENT
DECISIONS. IN NO EVENT SHALL YANKEE BE LIABLE TO VBW OR ANY CUSTOMER OF VBW FOR
ANY LOST PROFITS OR SPECIAL OR CONSEQUENTIAL DAMAGES. IN THE EVENT OF A CLAIM BY
VBW OR A CUSTOMER OF VBW, YANKEE AND VBW SHALL ATTEMPT TO RESOLVE THE MATTER IN
GOOD FAITH FOR A PERIOD OF AT LEAST NINETY (90) DAYS. IN THE EVENT THE CLAIM
CANNOT BE RESOLVED BETWEEN THE VBW AND YANKEE, THE DISPUTE SHALL BE RESOLVED BY
AN ARBITRATION AS SET FORTH IN SECTION 11 HEREOF.
8. INDEMNITY. It is acknowledged that the opinions and market
assessments provided by Yankee are based on information that it believes to be
reliable and accurate at the time it is provided. VBW further acknowledges that
Yankee research, products and services are not intended to serve as a basis for
making investment decisions. VBW agrees to indemnify and hold Yankee and its
affiliates harmless from any claims, damages or liability incurred by Yankee or
its affiliates in connection with any claim by VBW or any client, customer or
other third party dealing with VBW; provided that such claim is directly related
to Yankee Material supplied by Yankee pursuant to this Agreement and used by VBW
or redistributed by VBW to such client, customer or third party. Notwithstanding
the foregoing however, VBW shall not be required to indemnify and hold Yankee
harmless from any claim, damage or liability to the extent such claim, damage or
liability results from the bad faith or gross negligence of Yankee or its
affiliates. Yankee agrees not to settle, compromise, consent to the entry of any
judgment in or otherwise seek to terminate any action, claim, suit or proceeding
in respect of which indemnification may be sought hereunder without the prior
written consent of VBW. Yankee further agrees to provide VBW with prompt notice
of any event which might result in Yankee seeking indemnification hereunder.
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9. ASSIGNMENT. Neither this Agreement nor any rights or obligations of
VBW hereunder may be assigned or delegated (by operation of law or otherwise) by
VBW in whole or in part without the prior written consent of Yankee. Neither
this Agreement nor any rights or obligations of Yankee hereunder may be assigned
or delegated (by operation of law or otherwise) by Yankee in whole or in part
without the prior written consent of VBW.
10. AMENDMENT; WAIVER; DISCHARGE; THIRD PARTY BENEFICIARIES. This
Agreement may not be amended, released, discharged, abandoned, terminated, or
otherwise modified in any manner, except by an instrument in writing signed on
behalf of each of the parties to be bound thereby by their duly authorized
representatives. The failure of any party hereto to enforce at any time any of
the provisions of this Agreement shall not in any way be construed to be a
waiver of this Agreement or any part hereof or of the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.
No third party shall be entitled to the rights and benefits of this Agreement.
11. ARBITRATION. Any dispute arising under this Agreement shall be
submitted for resolution in the Commonwealth of Massachusetts to a panel of
three arbitrators in accordance with the rules of American Arbitration
Association. Each party shall be bound by the decision of the arbitrators and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.
12. NOTICES. All notices or reports permitted or required under this
Agreement shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified; (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient, if not, then
the next business day; (iii) two (2) business days after being sent by a
commercial express courier service, specifying priority delivery, with written
verification of receipt; or (iv) seven (7) days after having been sent by
registered or certified mail, return receipt requested. Notices shall be sent to
the addresses set forth at the beginning of this Agreement or such other address
as either party may specify in writing.
13. SEVERABILITY. Any provision, or clause of any provision, of this
Agreement that may be found to be contrary to applicable law or otherwise
unenforceable will not affect the remaining terms of this Agreement, which will
be construed as if the unenforceable provision or clause were absent form this
Agreement, so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any party to this Agreement. Upon the determination that such provision or
clause is contrary to applicable law or otherwise unenforceable, the parties
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible.
14. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the interpretation
or construction of this Agreement.
15. PUBLICITY. This Agreement, including the specific terms hereof,
shall be considered confidential information of VBW and shall not be disclosed
by Yankee to any third party except to the extent contained in press releases
issued by VBW or in research
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materials published by VBW. In connection with this Agreement and the resulting
new relationship between Yankee and VBW, VBW intends to draft a joint press
release and develop an overall publicity strategy in which both VBW and Yankee
will participate. Yankee agrees that it shall not issue any press release or
other statement regarding this Agreement and the relationship between Yankee and
VBW without the prior written approval of VBW.
16. COUNTERPARTS. This Agreement may be executed simultaneously in
several counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
17. BINDING EFFECT. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior or contemporaneous agreements or understandings relating to the
subject matter hereof.
19. GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts as such laws are
applied to agreements entered into and to be performed entirely within
Massachusetts solely between Massachusetts residents.
IN WITNESS WHEREOF, Yankee and VBW have caused this instrument to be
properly executed by their duly authorized officers, in their respective
corporate names, the date and year first above written.
Yankee Group Research, Inc. Xxxxx Xxxxx Xxxxxx & Company, LLC
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx
President & CEO Chief Financial Officer
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