EXHIBIT 10.6
SERVICES AGREEMENT BETWEEN BRIDGEPORT FINANCIAL, INC.
AND THE COMPANY
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is made as of the 1st
day of January, 1997, by and between TELECOM INVESTMENT CORPORATION ("TIC") and
BRIDGEPORT FINANCIAL, INC. ("Bridgeport").
RECITALS:
TIC is in the business of acquiring, owning and operating
wireless cable television, telephony and data transmission frequencies, and
related assets (collectively, "Wireless Rights"), in developing and emerging
markets, including markets in Central and South America, Europe and Asia (the
"Business").
Bridgeport has experience in businesses similar to the Business,
and is currently providing consulting or other services to TIC in connection
with the Business under the terms of an oral agreement (the "Oral Agreement").
TIC desires to retain Bridgeport, and Bridgeport desires to be
retained by TIC, for the purpose of providing to TIC certain advisory and other
services relating to the Business and upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing recitals, and
other good and valuable consideration, the parties agree as follows:
AGREEMENT:
1. Termination of Oral Agreement. Bridgeport and TIC are currently
parties to the Oral Agreement, pursuant to which Bridgeport provides to TIC
services similar to the Services, as
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described in paragraph 3, and in exchange for the amount of $5,000 per month. In
consideration of the execution by the parties of this Agreement (and upon the
execution hereof by the parties), the Oral Agreement shall be deemed terminated
for all purposes.
2. Engagement of Bridgeport. Subject to the terms and conditions
of this Agreement, TIC hereby engages Bridgeport to provide and perform, and by
execution of this Agreement, Bridgeport agrees to provide and perform, all of
the duties, services and obligations required of Bridgeport under the terms of
this Agreement, including the Services, as that term is described in paragraph
3.
3. Services. During the term hereof, Bridgeport shall be
responsible for, among other things, the following duties and functions
(collectively, the "Services"):
(a) To provide to TIC and its affiliates business,
legislative, technical and administrative advice relating to the acquisition,
ownership, use or commercial exploitation of Wireless Rights in TIC's current
and anticipated market areas (the "Market Areas") and, at the request of TIC, to
assist TIC or its affiliates in the acquisition or disposition of any such
Wireless Rights.
(b) To notify, and keep TIC fully apprised, of all
legislative, legal and technological changes in wireless cable, telephony and
data transmission rights (or regulations or laws relating thereto) in the Market
Areas, and to notify or apprise TIC of any opportunities to acquire, develop,
utilize, invest in or sell, any Wireless Rights in the Market Areas.
(c) At the request of TIC, assist TIC and its affiliates
in the preparation, filing and prosecution of any applications, requests or
other filings for Wireless Rights in any of the Market Areas.
(d) At the request of TIC, assist TIC and its affiliates
in the acquisition of funding for the Business.
(e) To use its best efforts to perform the Services in a
substantial workmanlike manner and in accordance with any applicable or
appropriate standards, guidelines, business policies,
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procedures and business plans established from time to time by TIC or any
governmental agency or authority having jurisdiction over Bridgeport.
(f) To provide TIC with such reports as it may reasonably
require (either verbal or written) relating to the matters set forth in this
paragraph 3.
(g) To protect TIC's trade secrets and proprietary
information, including, but not limited to its marketing information, client
lists, prospect lists, business plans and other confidential information from
any unauthorized use or exposure.
(h) To acquire, and maintain, at its own expense, any and
all permits, equipment, licenses or personnel (including employees, agents or
independent contractors) necessary or appropriate for Bridgeport to perform the
Services in accordance with the terms hereof.
4. Independent Contractor Status. Bridgeport understands and
agrees that this Agreement shall not constitute or create any contract or
relationship of employment, partnership or agency between Bridgeport and TIC,
and that Bridgeport shall, for all purposes, be considered to be an independent
contractor of TIC. THE MEANS, METHODS AND TIMING OF BRIDGEPORT'S PERFORMANCE OF
THE SERVICES SET FORTH IN THIS AGREEMENT SHALL BE LEFT EXCLUSIVELY AND SOLELY TO
BRIDGEPORT'S DISCRETION. BRIDGEPORT SHALL BE FREE TO DISPOSE OF SUCH PORTION OF
ITS EMPLOYEES' OR OWNER'S TIME, ENERGY AND SKILLS DURING REGULAR BUSINESS HOURS
IN SUCH MANNER AS BRIDGEPORT SEES FIT, AND TO PROVIDE OR UTILIZE SUCH TIME,
ENERGY AND SKILL FOR THE BENEFIT OF SUCH OTHER PERSONS, FIRMS OR ENTITIES AS
BRIDGEPORT DEEMS ADVISABLE, CONSISTENT WITH THE TERMS HEREOF. TIC AND BRIDGEPORT
ACKNOWLEDGE AND AGREE THAT BRIDGEPORT SHALL HAVE THE RIGHT TO DELEGATE OR
SUBCONTRACT ALL OR A PORTION OF THE SERVICES TO THIRD PARTIES, PROVIDED THAT
BRIDGEPORT OTHERWISE COMPLIES WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT.
5. Consideration.
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(a) In consideration of the performance by Bridgeport of
the Services, TIC agrees to pay to Bridgeport, during the term hereof and on an
annual basis in arrears, an amount equal to the sum of (i) two percent (2%) of
the first $50,000,000 of Telecom's gross annual revenues and (ii) one percent
(1%) of Telecom's gross annual revenues in excess of $50,000,000, from all
sources; provided, however, that in no event shall the amounts payable to
Bridgeport hereunder be less than one hundred fifty thousand dollars ($150,000)
for the first Contract Year, as defined below, or $20,855.33 per month
thereafter. The amounts payable with respect to the first Contract Year shall be
due and payable upon the earlier of 15 days after the end of such Contract Year
or 5 days after the receipt by TIC of proceeds from an equity or debt financing
of at least $3,000,000. Thereafter, the amounts due Bridgeport under the terms
of this Agreement shall be due and payable within 15 days of the end of such
month. Bridgeport hereby specifically acknowledges that, by reason of the
termination of the Oral Agreement, it is waiving (and does hereby waive) all
monthly amounts payable or to be payable to it under the Oral Agreement.
(b) For purposes of this paragraph, (i) "TIC" shall mean
TIC and all of its parent and subsidiaries, and its parent's subsidiaries;
provided, however, that if any subsidiary is not held 100% by TIC or its parent,
the revenue of such subsidiary shall be attributed to TIC to the extent of TIC's
or its parent's ownership of such subsidiary. By way of example, if a subsidiary
is only owned 20% by TIC, only 20% of that subsidiary's revenue would be
attributed to TIC for purposes of this paragraph 4. Notwithstanding the
foregoing, no revenue shall be attributed to TIC from any operations of TIC or
its subsidiaries or parent with respect to Wireless Rights in New Zealand; and
(ii) a "Contract Year" shall mean a period beginning on the execution of this
Agreement and continuing through the one year period thereafter.
(c) From time to time during the term of this Agreement
and during the period ending on the third anniversary of its termination,
Bridgeport shall be entitled to review or audit the books and records of TIC in
order to verify the amounts due and payable to Bridgeport pursuant to this
paragraph. If any such audit or review shows that the amounts actually due
Bridgeport for any calendar year hereunder was understated by TIC by 5% or more,
TIC shall bear the costs of such audit or review, and shall be required to pay
to Bridgeport the amount of any such deficiency, together with interest thereon
(from the ending date of the calendar year in question) at the rate of
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18% per annum until such deficiency is paid in full). If any such audit or
review shows no deficiency or a deficiency of less than 5%, Bridgeport shall
bear the costs and expenses of such audit or review.
6. Term. The term of this Agreement shall commence on the date
hereof and shall continue for a period of 5 years. Thereafter, this Agreement
shall automatically renew for successive periods of 1 year, unless either party
notifies the other party of its election not to renew this Agreement at least 60
days prior to the end of the current term.
7. Termination.
(a) TIC may terminate this Agreement at any time and with
or without notice to Bridgeport in the event of the occurrence of any one or
more of the following:
(i) TIC ceases active business operations;
(ii) Bridgeport fails or refuses to perform the
Services in accordance with the terms hereof;
(iii) Bridgeport, or its principals, is charged
with or convicted of a felony;
(iv) Bridgeport breaches its duties or
obligations hereunder and fails or refuses to correct any such breach within 10
days of written notice by TIC of such breach; or
(v) Upon the issuance of any final, binding order
of a governmental authority having jurisdiction rendering invalid or
unenforceable any central part of this Agreement.
(b) Bridgeport may terminate this Agreement at any time
and with or without notice in the event TIC breaches its duties or obligation
hereunder, and fails or refuses to correct such breach within 10 days of written
notice by Bridgeport of such breach.
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(c) Bridgeport and TIC may terminate this Agreement, at
any time, upon their mutual written consent.
(d) In the event of the termination of this Agreement in
accordance with this paragraph 7, all obligations of the parties (except those
specified to survive such termination, as described in this Agreement) shall
cease as of the termination date without prejudice to any rights or remedies of
either party.
8. Records. Bridgeport shall maintain adequate and accurate
records, books and accounts regarding the performance of the Services hereunder,
which shall be open to inspection by TIC during normal business hours during the
term of this Agreement and for a period of three (3) years thereafter.
9. Customers and Competition.
(a) Bridgeport acknowledges and agrees that TIC has and
will spend substantial time, effort and money in connection with the development
of its Business and the promotion, marketing and sale of the Business, and that
all customers and accounts for which Bridgeport provides services hereunder are
and shall remain the sole and exclusive customers, accounts and proprietary
contacts of TIC after the termination of this Agreement.
(b) During the term of this Agreement and for a period of
one year after its termination, Bridgeport shall not engage in any business
operations in direct or indirect competition with the Business in any
then-current market of TIC.
(c) Bridgeport hereby acknowledges and agrees that, as a
result of the special relationship between Bridgeport and TIC relating to the
nature and terms of this Agreement, and other matters, the breach by Bridgeport
of the terms and conditions of this paragraph would result in immediate and
irreparable harm to TIC, the extent of which would be difficult or impossible to
determine. Therefore, in the event of any breach or threatened breach by
Bridgeport of the terms and conditions of this paragraph, TIC shall have the
right to obtain, and Bridgeport hereby consents to the issuance of, a temporary
or permanent injunction preventing or ceasing any such violation. The right
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to injunctive relief provided under this paragraph shall be in addition to such
other rights and remedies as TIC may have, under law or in equity. In the event
of any termination of this Agreement, the provisions of this paragraph 9 shall
survive.
10. Authority and Relationship. Bridgeport shall not have any
right to bind, obligate or make representations with respect to TIC in any
business or other matter whatsoever, and shall not make any representations to
the contrary. TIC shall not be obligated to accept any business opportunity
procured or proposed by Bridgeport as a result of its performance of the
Services hereunder.
11. Indemnification. Bridgeport shall forever protect, save and
keep TIC harmless and indemnify TIC against and from any and all claims,
demands, losses, costs, damages, suits, judgments, penalties, expenses and
liabilities of any kind or nature whatsoever (including attorneys' fees and
court costs) arising directly or indirectly out of or in connection with a
breach by Bridgeport of any of its representations, warranties or covenants
contained in this Agreement.
12. Representations and Warranties of Bridgeport. Bridgeport
hereby represents and warrants to TIC, with the understanding that TIC is
relying upon such representations and warranties in entering into this
Agreement:
(a) Bridgeport is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah, and has
received all necessary approvals (shareholder, director or otherwise) necessary
for it to execute and perform this Agreement.
(b) The execution and performance by Bridgeport of this
Agreement will not constitute a breach or a violation of any agreement to which
Bridgeport is a party, or violate or breach its articles of incorporation or
bylaws.
13. Assignment or Transfer. It shall be a condition to the
transfer, assignment or delegation by Bridgeport of any of its rights or
obligations under this Agreement that the transferee possess (in TIC's sole
discretion) the requisite skills, experience and knowledge to perform the
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Services hereunder and that the transferee agree to execute an agreement
substantially in the form of this Agreement. This Agreement shall be binding
upon any successor or assignee of TIC, or upon any permitted successor or
assignee of Bridgeport.
14. Default. Should default occur in the performance of any of the
obligations set forth in this Agreement, the defaulting party shall, in addition
to any damages which may result from that default, pay to the non-defaulting
party the costs, including reasonable attorneys' fees incurred by the
non-defaulting party in curing such default or in enforcing the terms and
conditions of this Agreement.
15. Headings. The headings for the paragraphs of this Agreement
are inserted for convenience only and are not part of this Agreement.
16. Severability. Any provision hereof which may be invalid or
unenforceable under any applicable law or regulation shall be reformed so as to
be enforceable and so as to effectuate, to the maximum extent possible, the
intent of the parties hereunder. Any invalidity or unenforceability of any
provision hereunder shall not invalidate the remaining provisions of this
Agreement.
17. Governing Law. The validity, construction, enforcement and
effect of this Agreement shall be governed by the laws of the State of Utah. The
parties hereto specifically submit to the jurisdiction of the state and federal
courts for the State of Utah with respect to all questions relating to the
construction and enforcement of this Agreement and to the adjudication of any
and all claims arising out of this Agreement.
18. Integration. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
previous written or oral negotiations, commitments or writings, and cannot be
altered or otherwise amended except pursuant to an instrument in writing signed
by each of the parties hereto.
IN WITNESS WHEREOF, the parties execute this Agreement as of the
day and date first noted above.
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BRIDGEPORT FINANCIAL, INC.
By:/s/ Xxxxxx X'Xxxxxxxx
Its:Chairman
TELECOM INVESTMENT CORPORATION
By:/s/ Xxxxxxx X. Floor
Its:Vice President & Secretary
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