PROFESSIONAL SERVICES AGREEMENT
Exhibit 10.3
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THIS PROFESSIONAL SERVICES AGREEMENT (this “Agreement”), dated as
of April 6, 2009, is entered into by and among Javo Beverage Company, Inc., a
Delaware corporation (the “Company”), and
Falconhead Capital, LLC, a Delaware limited liability company (“Falconhead”).
WHEREAS,
the Company has entered into that certain Securities Purchase Agreement, dated
as of the date hereof, by and between the Company and Coffee Holdings LLC, a
Delaware limited liability company (“Holdings”), pursuant
to which Holdings has acquired notes and common stock of the Company and other
rights with respect thereto (the “Investment”);
WHEREAS,
in connection with the Investment, Falconhead has provided and will continue to
provide financial and management consulting services and the Company has
received, and desires to continue to receive, such services and to obtain the
benefit of the experience of Falconhead in business and financial management
generally and its knowledge of the Company and its financial affairs;
and
WHEREAS,
Falconhead has provided and is willing to provide financial and management
consulting services to the Company for the compensation arrangements set forth
in this Agreement.
NOW,
THEREFORE, in consideration of the foregoing premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
Falconhead and the Company hereby agree as follows:
1. Engagement. The
Company hereby engages Falconhead as a financial and management consultant, and
Falconhead hereby agrees to provide financial and management consulting services
to the Company, all on the terms and subject to the conditions set forth
herein.
2. Services of
Falconhead. Falconhead hereby agrees during the term of this
engagement to consult with the board of directors of the Company (the “Board of Directors”)
and management of the Company on such business and financial matters as may be
reasonably requested from time to time by the Board of Directors or the
Company’s management team, in each case with reasonable advance
notice. Such consultation services shall primarily include assisting
the Company in analyzing its operations and historical performance and assisting
the Company with respect to its corporate strategy and any future acquisitions,
divestitures, financings or other similar transactions. The Company
understands and agrees that if Falconhead is asked to furnish the Company a
financial opinion letter or act for the Company in any other formal capacity,
such further action shall be at the sole option of Falconhead and may be subject
to a separate agreement containing provisions and terms to be mutually agreed
upon.
3. Standard of
Performance. Falconhead shall devote such time and efforts to
provide the consultation services hereunder as it deems necessary or appropriate
(including by making the management professionals employed or engaged by it
available in connection therewith); provided, however, that no minimum
number of hours shall be required to be devoted by Falconhead (or any such
management professionals) on a weekly, monthly, annual or other
basis. Falconhead does not make any representations or warranties,
express or implied, in respect of the consultation services provided hereunder
and in no event shall Falconhead or any of its affiliates or any of their
respective directors, managers, partners, controlling persons (within the
meaning of Section 15 of the Securities Act of 1933, as amended, or Section
20(a) of the Securities Exchange Act of 1934, as amended), if any, officers,
employees, consultants, advisors or agents (collectively, the “Falconhead Parties”)
be liable to the Company for any act, alleged act, omission or alleged omission
or any loss, liability, damage or expense arising out of or in connection with
the performance of services contemplated by this Agreement, except to the extent
the same is determined by a court of competent jurisdiction by final and
non-appealable judgment to have rsulted primarily from the gross negligence or
willful misconduct of Falconhead.
4. Fees. In
consideration of the consulting services provided by Falconhead prior to the
date hereof in connection with the Investment, the Company agrees to pay to
Falconhead upon execution of this Agreement a one-time transaction fee in an
amount equal to $500,000. In consideration of the consulting services
to be provided by Falconhead after the date hereof, the Company shall pay to
Falconhead an annual management fee equal to $100,000, payable in advance in
equal quarterly installments on each January 1, April 1, July 1 and October 1
during the term of this Agreement (with $25,000 payable to Falconhead upon
execution of this Agreement with respect to the period between the date hereof
and June 30, 2009).
5. Expenses. In
addition to the fees payable hereunder, the Company shall promptly, but in no
event less than thirty (30) days following presentment, reimburse Falconhead for
such reasonable travel expenses and other reasonable out-of-pocket fees and
expenses (including reasonable attorneys fees and expenses) as may be incurred
by any Falconhead Party in connection with the rendering of services hereunder
(including fees and expenses incurred in attending any Company or industry
related meetings), provided that Falconhead shall obtain the Company’s prior
approval before incurring any expenses in excess of $2,500 or $10,000
individually or in the aggregate, respectively.
6. Payments. All
payments or reimbursements to be made to Falconhead pursuant to this Agreement
will be paid by wire transfer of immediately available funds to account(s)
specified by Falconhead in writing to the Company.
7. Term. This
Agreement will continue from the date hereof until March 31, 2014. No
termination of this Agreement, whether pursuant to this paragraph or otherwise,
shall affect the Company’s obligations with respect to the fees, costs and
expenses due to or incurred by Falconhead in rendering services hereunder and
not paid or reimbursed by the Company as of the effective date of such
termination or with respect to any fees due to Falconhead as of the date of
termination. In addition, if this Agreement shall be terminated by
the Company prior to the end of the term, the Company shall also be required to
pay to Falconhead all fees payable under Section 4 through the remainder of the
term in a lump sum payment on the date of such termination.
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8. Indemnification.
(a) The
Company shall indemnify and hold harmless each Falconhead Party (collectively
referred to as “Indemnified Persons”
and individually as an “Indemnified Person”)
from and against any and all claims, liabilities, losses, damages and expenses
incurred by any Indemnified Person (including those arising out of an
Indemnified Person’s negligence) which (A) are related to or arise out of
(i) actions taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) by the Company or (ii) actions
taken or omitted to be taken by an Indemnified Person with the Company’s consent
or in conformity with any Company instructions or any actions or omissions by
the Company or (B) are otherwise related to or arise out of Falconhead’s
engagement or its performance of services hereunder, and will reimburse each
Indemnified Person for all costs and expenses, including fees and disbursements
of any Indemnified Person’s counsel, as they are incurred, in connection with
investigating, preparing for, defending or appealing any action, formal or
informal claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, related to, arising out of or
in connection with Falconhead’s engagement or performance of services hereunder,
whether or not any Indemnified Person is named as a party thereto and whether or
not any liability results therefrom. The Company will not, however,
be responsible to any Indemnified Person for any claims, liabilities, losses,
damages or expenses pursuant to clause (B) of the preceding sentence that to the
extent that the same is determined by a court of competent jurisdiction by final
and non-appealable judgment to have resulted primarily from the gross negligence
or willful misconduct of Falconhead. The Company further agrees that
it will not, without the prior written consent of Falconhead, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of
Falconhead and each other Indemnified Person hereunder from all liability
arising out of such claim, action, suit or proceeding.
(b) The
Company further agrees that with respect to any Indemnified Person who is
employed, retained or otherwise associated with, or appointed or nominated by,
Falconhead or any of its affiliates and who acts or serves as a director,
officer, manager, fiduciary, employee, consultant, advisor or agent of, for or
to the Company or any of its subsidiaries, that the Company or such
subsidiaries, as applicable, shall be primarily liable for all indemnification,
reimbursements, advancements or similar payments (the “Indemnity
Obligations”) afforded to such Indemnified Person acting in such capacity
or capacities on behalf or at the request of the Company or such subsidiary,
whether the Indemnity Obligations are created by law, organizational or
constituent documents, contract (including this Agreement) or
otherwise. Notwithstanding the fact that any Falconhead Party, may
have concurrent liability to an Indemnified Person with respect to the Indemnity
Obligations, the Company hereby agrees that in no event shall the Company or any
of its subsidiaries have any right or claim against any of the Falconhead
Parties for contribution or have rights of subrogation against any Falconhead
Parties through an Indemnified Person for any payment made by the Company or any
of their subsidiaries with respect to any Indemnity Obligation. In
addition, the Company hereby agrees that in the event that any Falconhead
Parties pay or advance an Indemnified Person any amount with respect to an
Indemnity Obligation, the Company will, or will cause its subsidiaries to, as
applicable, promptly reimburse any such Falconhead Parties for such payment or
advance upon request.
(c) The
foregoing right to indemnity shall be in addition to any rights that Falconhead
and/or any other Indemnified Person may have at common law or otherwise and
shall remain in full force and effect following the completion or any
termination of the engagement or this Agreement.
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9. Falconhead an Independent
Contractor. Falconhead and the Company agree that Falconhead
shall perform services hereunder as an independent contractor, retaining control
over and responsibility for its own operations and personnel. No
Falconhead Party shall be considered employees or agents of the Company as a
result of this Agreement nor shall any of them have authority to contract in the
name of or bind the Company, except as expressly agreed to in writing by the
Company.
10. Confidentiality. No
advice or confidential information rendered or provided by Falconhead pursuant
to or in connection with the services provided hereunder, whether formal or
informal, may be disclosed, in whole or in part, or summarized, excerpted from
or otherwise referred to without Falconhead’s prior written
consent.
11. No Exclusive Duty to the
Company.
(a) In
recognition that (i) Falconhead currently has, and will in the future have or
will consider acquiring, investments in numerous entities with respect to which
Falconhead may serve as an advisor, a director or in some other capacity; (ii)
Falconhead may have duties to various investors, stockholders and partners;
(iii) Falconhead (or one or more affiliates, associated investment funds or
portfolio companies) may engage in the same or similar activities or lines of
business as the Company and may have an interest in the same areas of corporate
opportunities; (iv) the Company will derive certain benefits hereunder; and
(v) Falconhead, in desiring and endeavoring to satisfy its duties, may
confront difficulties in determining the full scope of such duties in any
particular situation, the provisions of this Section 11 are
set forth to regulate, define and guide the conduct of certain affairs of the
Company as they may involve Falconhead.
(b) Notwithstanding
anything to the contrary contained herein, (i) Falconhead and its affiliates
shall not be required to manage the Company as their sole and exclusive
function; (ii) Falconhead and its affiliates may have other business interests
and may engage in other activities in addition to those relating to the Company,
and such other business interests or activities may be of any nature or
description, may be competitive with the Company and may be engaged in
independently or with others; and (iii) the Company shall not have any right in
or to such other ventures or activities of Falconhead or its affiliates or to
the income or proceeds derived therefrom, and the pursuit of such ventures or
activities, even if competitive with the Company, shall not be deemed wrongful
or improper.
(c) No
Falconhead Party shall have any duty (contractual or otherwise) to communicate
or present any corporate opportunities to the Company or any of its affiliates
or to refrain from any actions specified in Section 11(a), and
the Company, on its own behalf and on behalf of its affiliates, hereby renounces
and waives any right to require Falconhead or any of its affiliates to act in a
manner inconsistent with the provisions of Section
11(a).
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(d) No
Falconhead Party shall be liable to the Company or any of its respective
affiliates for breach of any duty (contractual or otherwise) by reason of any
actions or omissions of the types referred to in Section 11(a) or its
or its affiliates’ participation therein.
(e) For
the avoidance of doubt, nothing in this Section 11 shall
limit the duties of any Investor Nominee (as defined in the Purchase Agreement)
arising in, and as a result of, his or her capacity as a member of the Company’s
Board of Directors.
12. Notices. Any
notice required or permitted to be given or made under this Agreement by one
party to the other shall be deemed to have been duly given or made if personally
delivered, sent by reputable express courier service (charges prepaid), sent by
telecopy or facsimile or, if mailed, when mailed by registered or certified
mail, return receipt requested and postage prepaid, to the other party at the
following addresses (or at such other address as shall be given in writing by
one party to the other):
If to
Falconhead:
Falconhead
Capital, LLC
000 Xxxx
Xxxxxx, 0xx Xxxxx
Xxx Xxxx,
XX 00000
Telecopy: (000)
000-0000
Attention: Xxxx
Xxxxxx and Xxxxx Xxxxx
with a
copy to:
Weil,
Gotshal & Xxxxxx LLP
000 Xxxxx
Xxxxxx
Xxx Xxxx,
XX 00000
Telecopy: (000)
000-0000
Attention: S.
Xxxxx Xxxxx
If to the
Company:
Javo
Beverage Company, Inc.
0000
Xxxxxxxxx Xxxxx
Xxxxx,
XX 00000
Telecopy:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxxxx
13. Entire Agreement;
Modification. This Agreement (a) contains the complete
and entire understanding and agreement of Falconhead and the Company with
respect to the subject matter hereof; and (b) supersedes all prior and
contemporaneous understandings, conditions and agreements (including any term
sheets or letters of intent) oral or written, express or implied, respecting the
engagement of Falconhead in connection with the subject matter
hereof.
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14. Amendments and
Waivers. Except as otherwise provided herein, the provisions
of this Agreement may only be amended or waived upon prior written agreement
between Falconhead and the Company.
15. Waiver of
Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach of that provision or any other provision
hereof.
16. Assignment. Neither
Falconhead nor the Company may assign its rights or obligations under this
Agreement without the express written consent of the other. Notwithstanding the
foregoing, Falconhead shall be entitled to assign its rights and obligations
under this Agreement without obtaining the Company’s consent to any
successor-in-interest (“Permitted Assignee”)
to all or substantially all of Falconhead’s business and assets; provided the Permitted
Assignee shall execute and deliver to the Company an assumption agreement, in
form and substance reasonably satisfactory to the Company, whereby such
Permitted Assignee assumes all of the obligations of Falconhead under this
Agreement.
17. Successors. This
Agreement and all the obligations and benefits hereunder shall inure to the
successors and permitted assigns of the parties.
18. Counterparts. This
Agreement may be executed and delivered by each party hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and both of which taken together shall constitute one and the same
agreement.
19. Governing
Law. THE PROVISIONS OF THIS AGREEMENT, ITS EXECUTION,
PERFORMANCE OR NONPERFORMANCE, INTERPRETATION, TERMINATION, CONSTRUCTION AND ALL
MATTERS BASED UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT (WHETHER IN EQUITY, LAW
OR STATUTE) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS, BOTH
PROCEDURAL AND SUBSTANTIVE, OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CONFLICT OF LAWS PROVISIONS THAT IF APPLIED MIGHT REQUIRE THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION.
20. Submission to Jurisdiction;
Consent to Service of Process.
(a) The
parties hereto hereby irrevocably submit to the exclusive jurisdiction of any
federal or state court located within the borough of Manhattan of the City,
County and State of New York over any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby and each party hereby
irrevocably agrees that all claims in respect of such dispute or any suit,
action or proceeding related thereto may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum for the maintenance of such dispute. Each of
the parties hereto agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
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(b) Each
of the parties hereto hereby consents to process being served by any party to
this Agreement in any suit, action or proceeding by delivery of a copy thereof
in accordance with the provisions of Section 12 of this
Agreement.
21. WAIVER OF JURY
TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT IT WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY
IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT
(IN CONTRACT, TORT OR OTHERWISE) INQUIRY, PROCEEDING OR INVESTIGATION ARISING
OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.
22. No Strict
Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
23. Descriptive Headings;
Interpretation. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement. The use of the word “including” in this Agreement shall be
by way of example rather than by limitation.
24. Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
* * * * *
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered on the date and year first above written.
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FALCONHEAD
CAPITAL, LLC
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By:
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/s/ Xxxxx Xxxxxx
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Name:
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Xxxxx Xxxxxx | ||
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Title:
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General Partner | ||
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JAVO
BEVERAGE COMPANY, INC.
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By:
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/s/
Xxxx X. Xxxxxxx
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Name:
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Xxxx
X. Xxxxxxx
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Title:
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Chairman
and CEO
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[Signature
Page to Javo Beverage Company, Inc. Professional Services
Agreement]
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