EXHIBIT 10.5
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CONSULTING AGREEMENT
AGREEMENT, dated April 21, 1998 between Vail Banks, Inc. (hereinafter "Vail")
and Xxxxxx Xxxxxxx Associates, LTD (hereinafter "DSA").
Now, therefore, the parties hereto agree as follows:
1. ENGAGEMENT. Vail shall engage DSA, and DSA shall serve Vail upon the terms
and conditions hereinafter set forth.
2. TERM AND EXTENSION. The engagement of DSA hereunder shall commence on April
21, 1998 and shall continue until Vail's completion of either their merger
transaction with Telluride Bancorp or their IPO, whichever occurs first, but
shall not extend beyond October 21, 1998. This Agreement may be extended upon
mutual, written agreement of the parties.
3. DUTIES. During the period or periods of its engagement hereunder, DSA shall
serve Vail and shall perform the following services and functions (hereinafter
"Consulting"):
a. Format and present financial information in a manner that is
acceptable in the IPO registration.
b. Assist in the assimilation and presentation of financial statement
narrative in a manner that is acceptable in the IPO registration.
c. Consolidate and integrate financial information from the various
merged banks into statements for the consolidated entity. Develop
various proforma scenarios and statements as required.
d. Facilitation and coordination of the above activities within the scope
of the entire acquisition and IPO process timelines.
e. Assist in the preparation and placement of the Private Placement
Memorandum planned to fund an acquisition currently in progress.
f. Assist in the completion and closing of the Telluride acquisition.
g. Attendance of meetings required by DSA to perform the above services
and functions.
Within the limitations hereinabove provided, DSA will render such other advisory
services in connection with the Consulting of Vail as may be requested from time
to time by the officers or directors of Vail, without further compensation other
than that for which provision is made in this Agreement.
4. FACILITIES. While DSA is working on-site at the location of Vail, Vail
shall provide adequate and appropriate office space and access to necessary
equipment, including, but not limited to, fax machine, telephone, personal
computer, software, printer, and photo copier.
5. DEDICATION OF RESOURCES. DSA shall dedicate one full-time equivalent to
complete said Consulting. Other DSA resources will be made available to the
aforementioned resource to serve in advisory capacities from time to time as
needed.
6. LICENSES AND QUALIFICATIONS. Vail acknowledges that DSA will not, and is
not licensed to provide financial opinions, representations, or market
securities or other financial instruments, related to regulated investment
offerings. DSA may assist in the preparation of financial statements, opinions,
representations, and other material, which will then be reviewed and authorized
by qualified parties prior to presentation to regulatory agencies and/or
potential investors. Vail agrees not to rely on DSA for tax or legal advice.
7. COMPENSATION. Vail shall pay to DSA for Consulting the following:
a. a Monthly Fee of $14,000.00 (fourteen thousand dollars), with the
first monthly payment due upon the signing of this Agreement. This
fee will be credited back to Vail and netted against the Success Fee
referenced in Paragraph 7b in the event that the IPO or Telluride
transactions are completed within the term of this contract.
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b. a Success Fee equal to 1% (one percent) of the IPO Gross Proceeds plus
0.5% (one half of one percent) of the Acquisition Price of the
Telluride acquisition, or, if the IPO is not completed prior to the
closing of the Telluride acquisition, the Success Fee shall be equal
to 1.1% (one and one tenth percent) of the Acquisition Price of the
Telluride acquisition. The term "Gross Proceeds" means all
consideration, before deduction of any costs, fees, and expenses
associated with the IPO transaction, and received from investors in
exchange for stock as a result of the IPO during the term of this
agreement or within 2 (two) years after the termination of this
Agreement. The term "Acquisition Price" means all consideration given
to acquire, or merge with, Telluride Bancorp during the term of this
Agreement or within 2 (two) years after the termination of this
Agreement.
8. TRAVEL AND OTHER EXPENSES. Vail will reimburse DSA for reasonable and
customary travel expenses, including, but not limited to, air fare, ground
transportation, lodging, meals, and phone calls incurred in the course of
performance of Consulting.
9. INVOICING AND PAYMENT. DSA will accumulate fees and expenses and xxxx Xxxx
for such fees and expenses on a monthly basis. Each invoice will show detail of
travel expenses incurred and billable during the billing period. Payment will
be due and payable upon Vail's receipt of such invoices.
10. INDEMNIFICATION AND HOLD HARMLESS PROVISION. Vail agrees hereby to
indemnify and hold harmless DSA from any and all claims by VAIL which may arise
out of and in the course of the performance of DSA's duties performed in
accordance with this Agreement. In the event that DSA is named in any legal
action stemming from Vail's IPO, mergers, acquisitions, other activities, or
DSA's Consulting in accordance with this Agreement, Vail agrees to defend DSA
against such charges and compensate DSA for any costs incurred by DSA associated
with the litigation and any unfavorable ruling. Any and all claims for
unemployment benefits and or claims for workers' compensation benefits are
hereby expressly waived by DSA who agrees to
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maintain separate policies of liability, health, and accident insurance as may
be necessary or required by DSA in connection with the performance of its duties
herein.
11. RELATIONSHIP BETWEEN PARTIES. DSA is engaged by Vail only for the purposes
and to the extent set forth in this Agreement, and its relation to Vail shall,
during the period or periods of its engagement and services hereunder, be that
of an independent contractor. DSA shall be free to dispose of such portion of
its entire time, energy, and skill during regular business hours as it is not
obligated to devote hereunder to Vail in such manner as it sees fit and to such
persons, firms, or corporations as it deems advisable. DSA shall not be
considered as having an employee status or as being entitled to participate in
any plans, arrangements, or distributions by Vail pertaining to or in connection
with any insurance, pension, stock bonds, profit-sharing, or similar benefits
for their regular employees.
12. PROFESSIONAL RESPONSIBILITY. Nothing in this Agreement shall be construed
to interfere with or otherwise affect the rendering of services by DSA in
accordance with its independent and professional judgment. DSA shall perform
its services in a good and workmanlike manner and in accordance with generally
accepted practices.
13. ENFORCEMENT. The failure of any party to enforce at any time any of the
provisions or terms of this Agreement shall not be construed to be a waiver of
such provision or term nor shall it constitute a waiver of the right of any
party to enforce such term or provision thereafter.
14. ARBITRATION. It is agreed that in the event of any dispute between DSA and
Vail or among other contractors utilized by DSA arising out of or connected with
this Agreement, which cannot be resolved by the parties in accordance with the
terms of this Agreement, such dispute shall be submitted to arbitration in
accordance with the rules then in effect of the American Arbitration
Association, and judgment upon the reward rendered may be entered in any Court
of competent jurisdiction. The parties hereby waive any appeal of the decision
of the arbitrators. Each party may be represented by legal counsel in any such
proceeding.
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15. SEVERABILITY. If any provision of this Agreement is deemed invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect. The provisions of this Agreement shall be liberally
construed in order to effectuate the purposes and intent hereof.
16. ENTIRE AGREEMENT. This Agreement shall be construed in accordance with
Colorado (State) law and shall constitute the entire Agreement between the
parties. In witness whereof, the parties have executed the Agreement as of the
date first written above.
VAIL BANKS, INC. XXXXXX XXXXXXX ASSOCIATES, LTD
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Title: President, CEO Title: Contractor
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