FLATWORLD SERVICES AGREEMENT
Exhibit 4.9
This
FlatWorld Services Agreement (this “Agreement”) is
entered into as of January 15, 2010 (the “Effective Date”) by
and between DAL Group, LLC, a Delaware limited liability company (“DAL”), and FlatWorld
Consulting LLC, a Delaware limited liability company (“Consultant”). DAL
and Consultant are sometimes hereinafter individually as a “Party” and
collectively referred to as the “Parties”.
Background
A. DAL
desires to retain the services of Consultant and Consultant desires to provide
services to DAL.
Agreements
1. Provision
of Services.
(a) During
the Management Services Term (as defined below), Consultant will provide
management consulting services, consistent with those services generally
performed by middle-market private equity firms for their portfolio companies,
with respect to DAL’s business as the board of managers of DAL may reasonably
request from time to time (the “Services”). The
Parties agree that each will cooperate with the other regarding the details of
the specific Services to be provided.
(b) Consultant
will devote such time, attention, and energy to the business and affairs of DAL
deemed necessary by Consultant to perform the Services, but in no event will
Consultant be required to devote more than an aggregate of 50 hours per calendar
month.
(c) Consultant
warrants that all Services will be performed in a good, professional,
workmanlike and competent manner, in conformance with all applicable
professional standards and the requirements of this
Agreement. Consultant agrees to provide the Services in reasonable
accordance with applicable policies and procedures of DAL.
(d) Consultant
agrees to provide the Services using personnel reasonably acceptable to
DAL.
(e) Consultant
shall not be required to provide Services, nor be entitled to receive the
Consulting Fee, prior to the start of the Management Services Term.
2. Compensation.
(a) During
the Management Services Term, Consultant shall receive an annual consulting fee
of $1,333,333 (the “Consulting Fee”),
paid in equal monthly installments of $111,111, paid in advance, commencing on
the date that is one year after the Effective Date, and on the same day of each
month thereafter. For clarification purposes, the Consulting Fee
shall be paid to Consultant even if no Services are requested of Consultant
during any portion or the entirety of the Management Services
Term. For further clarification purposes, the aggregate Consulting
Fee to be paid to Consultant during the initial Management Services Term shall
be $4,000,000.
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(b) In
addition to the Consulting Fee, commencing on the Effective Date, DAL will pay
to Consultant an acquisition fee (the “Acquisition Fee”)
equal to 2.0% of the enterprise value of any entity that is included on Schedule A attached
hereto (each, a “Target”) (such
schedule shall be amended from time to time upon the mutual written approval of
the Parties) if such Target is acquired by DAL in a transaction consummated no
later than the earlier of 12 months following (i) the time that Consultant is no
longer actively pursuing a transaction involving DAL and the Target as evidenced
by Consultant’s written records; (ii) a written direction by DAL to Consultant
that DAL will not pursue such a transaction; or (iii) the expiration of the
Management Services Term. The Parties agree that, at the request of
DAL, Consultant shall provide general descriptions to DAL of potential Targets
without specifically identifying such potential Targets. Based upon
such descriptions, DAL may request to add such potential Target to Schedule A, in which
case Consultant shall provide the name of such target (and other information in
Consultant’s possession regarding the Target). In the event that an
entity is added to Schedule A and DAL
provides written records to Consultant within 5 business days of such Target
being added to Schedule A evidencing
that DAL was already pursuing a transaction with such Target as of such time,
then such Target shall be promptly removed from Schedule
A. Consultant shall provide such assistance to DAL as it
reasonably requests in connection with the consummation of the acquisition of
any Target. If there is a dispute as to enterprise value of any
entity, it shall be determined by an investment banker mutually appointed by the
Parties and, if they cannot agree on an investment banker, then an investment
banker selected by the chief executive officer or equivalent position of BDO
Xxxxxxx, LLP.
(c) In
addition to the fees payable to Consultant pursuant to clauses (a) and (b) of
this Section 2, DAL shall promptly reimburse Consultant for all reasonable and
reasonably documented travel expenses and other out-of-pocket fees and expenses
as have been or may be incurred by Consultant in connection with the rendering
of Services that DAL requests in writing be performed by Consultant hereunder;
provided, however, that any
such expenses must be incurred pursuant to an expense budget of $10,000 per year
or as otherwise approved in advance in writing by the President of DAL or his
designee.
(d) Any
amounts not paid by DAL to Consultant within 30 days of the date on which such
amounts become due and payable shall accrue interest at a default rate of 15%
per annum.
3. Term; Management Services
Term. The term of this Agreement shall commence on the
Effective Date and shall terminate at the end of the Management Services Term.
The Management Services Term shall commence one year after the Effective Date
and shall terminate on the fourth anniversary of the Effective Date (the “Management Services
Term”); provided, however, that the Management Services Term may, prior
to its scheduled termination date, be extended for one-year periods upon the
mutual agreement of the Parties. Notwithstanding any other provision
of this Agreement, no termination of the Management Services Term or other
termination of this Agreement shall relieve (i) DAL of DAL’s obligation to pay
Consultant any amount payable under Section 2 or DAL’s indemnification
obligation to Consultant under Section 8 or (ii) either Party of their
confidentiality obligations to each other under Section 5 and Section 6, for a
period of twelve (12) months after the end of the Management Services Term, with
respect to confidential information or trade secrets disclosed to either Party
during the term of the Agreement.
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4. Nature of
Relationship. Consultant shall be deemed to be an independent
contractor and shall not be authorized to manage or direct the management of the
affairs of, act in the name of or bind DAL. DAL shall not be
obligated to follow or accept any advice or recommendation made by Consultant,
and the management, policies and operations of DAL shall be the sole
responsibility of the management of DAL. Nothing set forth in this
Agreement shall be deemed to prohibit Consultant from serving any other person
or entity in any capacity Consultant may deem appropriate or from conducting its
business and affairs in any manner it may elect; provided, however, during the
Management Services Term, Consultant and its Affiliates will not provide any
services to a person or entity that directly competes with the business of DAL
or any of its Affiliates conducted as of the date of this Agreement or in a
manner that involves an actual conflict of interest with respect to DAL or any
of its Affiliates. Notwithstanding any other term of this Agreement,
if Consultant presents to DAL the opportunity to acquire an entity or render
services to another person or entity in connection with such an opportunity and
DAL does not pursue such opportunity in good faith, Consultant shall be free to
independently pursue such opportunity.
5. Confidentiality.
(a) In
consideration of the payments to be received by Consultant under this Agreement,
in recognition of the highly competitive nature of the industries in which DAL
conducts its business, and to further protect the goodwill of DAL and to promote
and preserve its legitimate business interests, Consultant agrees that
Consultant shall not disclose at any time, except as required by applicable law
or regulation, to anyone other than its Representatives, any confidential
information or trade secret of DAL, its Affiliates or any customer of DAL (it
being understood that such Representatives will be informed of the confidential
nature of such information by Consultant and shall be directed by Consultant,
and each will agree, unless such Representatives are already bound to maintain
the confidentiality of such confidential information, to treat such information
as confidential in accordance with this Section 5), or use such confidential
information or trade secret for any purpose other than in connection with the
Services. If required by law or regulation to disclose confidential
information or trade secrets, Consultant shall provide written notice to DAL of
such requirement promptly after receipt of notice thereof and shall not comply
with such requirement prior to providing such notice to the extent permitted by
law or regulation.
(b) For the
purpose of this Agreement, the term “confidential information” includes
information concerning the business affairs of DAL or its Affiliates, contact
information of current, former or prospective customers or suppliers of DAL and
its Affiliates, planned and potential financial and business plans,
methodologies of doing business, employee lists and telephone numbers, any
information or documents that relate to, refer to, contain, or constitute trade
secrets, and computer/software programs and associated documentation and
material (i) which are proprietary to DAL or its Affiliates, customer or
suppliers or (ii) which are proprietary to a third party from which DAL has
purchased the right to use such programs or material and with respect to which
DAL or its Affiliates are under an obligation to prevent disclosure to persons
not authorized by DAL, its Affiliates or the third party owner to receive such
information. The term “confidential information” does not include
information which (i) is or becomes generally available to the public other than
by breach of this Agreement, (ii) Consultant learns from a third party without
knowledge of breach of any confidentiality obligations of such third party to
DAL or its Affiliates, customers or suppliers with respect to such information,
(iii) is already in the possession of Consultant as of the date of this
Agreement (except for confidential information previously provided by DAL or its
Affiliates or customers) or (iv) is independently developed by Consultant
without reliance upon the confidential information of DAL or its Affiliates,
customers or suppliers. The confidential information shall remain the
sole and exclusive property of DAL and its Affiliates, their respective
customers, suppliers and third party owners thereof.
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(c) Consultant
shall use the confidential information and trade secrets of DAL, its Affiliates,
customers and suppliers only in connection with the
Services. Consultant will not copy any of the confidential
information of DAL, its Affiliates, customers and suppliers for any purpose
except with the express consent of DAL. Consultant will abide by and
be bound by the confidentiality provisions of any confidentiality agreements
relating to confidential information between DAL, its Affiliates and any of its
customers, suppliers or other third parties of which Consultant has actual
knowledge.
(d) Upon
termination of this Agreement, or at any other time at DAL’s request, Consultant
agrees to deliver promptly to DAL or destroy all confidential information
(including manuals, letters, notes, notebooks, reports, formulae, computer
programs and associated documentation and material, memoranda, customer’s lists,
diskettes or other medium for electronic storage of information and all other
materials and all copies thereof containing confidential information relating in
any way to DAL, its Affiliates, their respective customers or suppliers or their
respective businesses), in any way obtained by Consultant which are in
Consultant’s possession or under its control, and Consultant will not make or
retain any copies of any of the foregoing and will so represent to DAL upon
termination of this Agreement. Notwithstanding, anything in this
Agreement to the contrary, Consultant shall not be required to destroy or
deliver to DAL, and Consultant is expressly permitted to retain, any materials
required to be maintained pursuant to Consultant’s legal or regulatory
requirements or document retention policies or that are “backed-up” by
Consultant pursuant to its normal policies or procedures.
(e) Each
Party understands that monetary damages alone would be insufficient to make the
other Party whole in the event a Party breaches, or is about to breach, any of
the provisions of this Section 5 or Section
6. Therefore, each Party agrees that, in addition to any
monetary damages or other relief to which such Party may be entitled, the other
Party shall be entitled to seek immediate and permanent injunctive relief in the
event of any breach or threatened breach by the other Party of any provision of
this Section 5
or Section 6,
without the necessity of proving actual damages or the posting of any bond, and
each Party waives any requirement for advance notification prior to the entry of
such injunctive relief. Failure to seek any or all remedies in one
case does not restrict either Party from seeking any remedies in another
situation. Such action by either Party shall not constitute a waiver
of any of its rights hereunder.
6. DAL
Confidentiality. DAL agrees that neither DAL, nor any DAL
Representative shall disclose at any time, except as required by applicable law
or regulation, or as agreed to in writing by the third party owner or provider
of the applicable information, to anyone other than the DAL Representatives, any
confidential information of any third party provided by Consultant to DAL or any
DAL Representative; provided, that Consultant has advised DAL or any DAL
Representative that such information is required to be maintained as
confidential. Each DAL Representative that receives any such
information will be informed by DAL of the confidential nature of such
information and shall be directed by DAL, and each will agree, unless the DAL
Representatives are already bound to maintain the confidentiality of such
confidential information, to treat such information as confidential in
accordance with this Section
6. Neither DAL, nor any DAL Representative shall use any such
confidential information for any purpose other that the purpose for which it was
provided by Consultant to DAL or any DAL
Representative.
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7. Liability. Neither
Consultant nor any of its Representatives shall be liable to DAL or its
subsidiaries or Affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of the Services, other than any
loss, liability, damage or expense arising out of Consultant’s fraud,
intentional misconduct, gross negligence, bad faith, knowing misconduct or
material breach of Consultant’s obligations under this Agreement.
8. Indemnification. DAL
agrees to indemnify and hold harmless Consultant and its Representatives against
and from any and all loss, liability, suits, claims, and damages (including
attorneys’ fees relating to defending the same) arising from their performance
hereunder; provided, however, that Consultant shall not be held harmless or
indemnified under this Section 8 for any losses, liabilities or expenses arising
out of Consultant’s or its Representatives’ fraud, intentional misconduct, gross
negligence, bad faith, knowing misconduct or material breach of Consultant’s
obligations under this Agreement. Consultant and its Representatives
will not, without DAL’s prior written consent, which consent shall not be
unreasonably withheld, settle, consent to the entry of any judgment in or
otherwise seek to terminate any action, claim, suit, investigation or proceeding
referred to herein. Promptly after receipt by Consultant or its
Representatives of service of any complaint or actual notice of the commencement
of any action, claim, suit, investigation or proceeding with respect to which
indemnification is being sought hereunder, such person will notify DAL in
writing of the same, but failure to so notify DAL in writing of the same will
relieve DAL of its obligation to indemnify such person only if and only to the
extent of any actual and material prejudice suffered by DAL as a result
thereof. DAL shall be entitled to assume the defense of any such
action, claim, suit, investigation or proceeding; provided, that any such
assumption by DAL shall constitute an acknowledgment by DAL of its obligation to
indemnify and hold harmless Consultant or its Representatives, as the case may
be, for any loss, liability, suits, claims, and damages (including attorneys’
fees relating to defending the same) arising from the subject matter
thereof. Upon such assumption by DAL of the defense of any such
action, claim, suit, investigation or proceeding, the Consultant and its
Representatives shall have the right to participate in the same and to retain
their own counsel but DAL shall not be liable for any legal expenses of other
counsel subsequently incurred by such Indemnified Person in connection with the
defense thereof.
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9. Entire Agreement;
Amendment. With respect to the subject matter of this
Agreement, this Agreement supersedes all previous contracts and constitutes the
entire agreement between the Parties. Neither Party will be entitled
to benefits other than those specified herein. No prior oral
statements or contemporaneous negotiations or understandings or prior written
material not specifically incorporated herein will be of any force and effect,
and no changes in or additions to this Agreement will be recognized unless
incorporated herein by amendment as provided herein, such amendment(s) to become
effective on the date stipulated in such amendment(s). No provision
of this Agreement shall be deemed waived, amended, supplemented or modified by
any Party, unless such wavier, amendment, supplement or modification is in
writing and signed by an authorized representative of the Party against whom it
is sought to enforce such waiver, amendment, supplement or
modification. The Parties specifically acknowledge that, in entering
into and executing this Agreement, the Parties rely solely upon the
representations and agreements contained in this Agreement and no others, other
than agreements or provisions incorporated in this Agreement by
reference.
10. Governing Law; Venue;
Jurisdiction. This Agreement, and all matters arising under or
related hereto, shall be governed according to the laws of the State of Florida,
without respect to its conflict of law principles. Each Party hereby
consents to the exclusive jurisdiction of the courts of the State of Florida and
of the United States of America in the County of Broward for any actions, suits
or proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each Party agrees not to commence any action, suit or
proceeding relating thereto except in such courts).
11. Notices. Any notice, demand,
approval, consent or communication required, permitted, or desired to be given
hereunder, will be in writing and will be served on the Parties at the following
respective addresses:
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If
to DAL:
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Law
Offices of Xxxxx X. Xxxxx, P.A.
000
X. Xxxx Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxxx,
Xxxxxxx 00000
Attn: Xxxxx
X. Xxxxx
Facsimile:
000-000-0000
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with
a copy to:
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Xxxxxx
Xxxxxxx PLLC
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attn:
Xxxxxx Xxxxxx
Facsimile: 000-000-0000
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If
to Consultant:
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FlatWorld
Consulting LLC
c/o
FlatWorld Capital LLC
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attn: Xxxxxxx
X. Xxxxxxx
Facsimile:
000-000-0000
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with
a copy to:
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Proskauer
Rose LLP
0000
Xxxxxxxx
Xxx
Xxxx, XX 00000
Attn:
Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
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or such
other address, or to the attention of such other person or officer, as any Party
may by written notice designate. Any notice, demand, or communication
required, permitted, or desired to be given hereunder will be sent either by
hand delivery, by prepaid certified or registered mail, return receipt
requested, postage prepaid in the United States Mail, by a nationally recognized
overnight courier, or via facsimile or other electronic transmission (including
transmission in portable document format by electronic mail). If any
notice, demand or communication is sent by facsimile or electronic mail
transmission, an original must be simultaneously sent by one of the
foregoing mail or courier methods. All such notices, demands or
communications shall be deemed to have been received (i) if by personal
delivery, facsimile machine or other electronic transmission (including
transmission in portable document format by electronic mail), on the date
immediately following the date of such delivery, (ii) if by certified or
registered mail, on the third business day after the mailing thereof or (iii) if
by next-day or overnight courier or delivery, on the date of such
delivery.
12. Severability. The
Parties have negotiated and prepared the terms of this Agreement in good faith
with the intent that each and every one of the terms, covenants and conditions
herein be binding upon and inure to the benefit of the respective
Parties. Accordingly, if any one or more of the terms, provisions,
promises, covenants or conditions of this Agreement or the application thereof
to any person or circumstance is adjudged to any extent invalid, unenforceable,
void or voidable for any reason whatsoever by a court of competent jurisdiction
or an arbitration tribunal, such provision will be as narrowly construed as
possible, and each and all of the remaining terms, provisions, promises,
covenants and conditions of this Agreement or their application to other persons
or circumstances will not be affected thereby and will be valid and enforceable
to the fullest extent permitted by law. To the extent this Agreement
is in violation of any applicable laws, the Parties shall negotiate in good
faith to amend this Agreement, to the extent possible consistent with its
purposes, to conform to applicable laws. Neither Party shall claim or
assert illegality as a defense to the enforcement of this Agreement or any
provision hereof; instead, any such purported illegality shall be resolved
pursuant to this Section
12.
13. Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of each of the Parties and their respective successors and permitted
assigns. Any purported assignment in violation of this Section 13 will be
void and of no effect. Except for an assignment of this Agreement by
Consultant to any of its Affiliates, Consultant may not delegate the performance
of any Services to be provided under this Agreement to any party, other than one
or more of its Representatives that normally performs such Services, provided,
however, that notwithstanding the foregoing, Consultant shall remain fully
responsible for compliance with the terms of this Agreement the same as if such
delegation were not effected.
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14. Further
Assurances. Each Party agrees to do and perform, from time to
time, any and all acts and to execute any and all further instruments required
or reasonably requested by the other Party in order to more fully effect the
purposes of this Agreement.
15. No Waiver; Cumulative
Remedies. No failure to exercise and no delay in exercising,
on the part of a Party, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
16. Counterparts;
Effectiveness. The Parties may execute this Agreement in
separate counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument. To the
extent signed and delivered by means of a facsimile machine or other electronic
transmission (including transmission in portable document format by electronic
mail), this Agreement shall be treated in all manner and respect and for all
purposes as an original and shall have the same binding legal effect as if it
were the original signed version thereof delivered in person. None of
the undersigned shall raise the use of a facsimile machine or other electronic
transmission to deliver a signature or the fact that such signature was
transmitted or communicated through the use of a facsimile machine or other
electronic transmission as a defense to the enforceability of this Agreement and
each of the undersigned forever waives any such defense.
17. Definitions
and Construction.
(a) “Affiliate” means a
person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the first mentioned
person.
(b) “DAL Representatives”
means DAL’s employees, directors, officers, advisors, agents, controlling
persons, consultants or other representatives.
(c) “Representatives”
means Consultant’s employees, directors, officers, advisors, agents, controlling
persons and, if approved by DAL in writing, consultants or other
representatives.
(d) All
references to “$” or “dollars” will be to United States dollars and all
references to “days” will be to calendar days unless otherwise
specified.
(e) As used
in this Agreement, neutral pronouns and any variations thereof shall be deemed
to include the feminine and masculine and all terms used in the singular shall
be deemed to include the plural, and vice versa, as the context may
require.
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(f) The words
“hereof”, “herein” and “hereunder” and other words of similar import refer to
this Agreement as a whole, as the same may from time to time be amended or
supplemented, and not to any subdivision contained in this
Agreement.
(g) The word
“including” when used herein is not intended to be exclusive and means
“including, but not limited to.” The word “or” when used herein is
not intended to be exclusive unless the context clearly requires
otherwise.
(h) The
schedules hereto will be deemed to be incorporated in and an integral part of
this Agreement.
(i) All
provisions of this Agreement have been mutually negotiated and
drafted. The provisions of this Agreement will be interpreted and
construed in accordance with their fair meanings, and not strictly for or
against either Party, regardless of which Party may have drafted this Agreement
or any specific provision.
18. Enforcement. In the
event either Party resorts to legal action to enforce or interpret any provision
of this Agreement, the prevailing Party will be entitled to recover the costs
and expenses of such action so incurred, including reasonable attorney’s
fees.
[Remainder intentionally left blank;
signature page follows.]
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IN
WITNESS WHEREOF, the Parties have executed this FlatWorld Services Agreement as
of the date first written above.
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DAL
GROUP, LLC
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By: FLATWORLD
DAL LLC, its Member
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By: NAGINA
ENGINEERING INVESTMENT
CORP., its
Member
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By:
____________________________________
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Name: Xxx
X. Xxxxx
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Title: President
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FLATWORLD
CONSULTING LLC
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By: FORTUNA
CAPITAL PARTNERS LP, its Member
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By: FORTUNA
CAPITAL CORP., its General Partner
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By:
__________________________________
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Name: Xxxxxxx X.
Xxxxxxx
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Title: President
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Schedule
A
Approved
Targets
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Date
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Target
Name
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Approval
of DAL Group, LLC
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Approval
of FlatWorld Consulting LLC
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|||
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________
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_________________
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By:
____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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|||
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________
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_________________
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By:
_____________________
Name:
Title:
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By:
_____________________
Name:
Title:
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