1
EXHIBIT 10.67
B C CAPITAL CORP
000 X. Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxx, XX 00000
Tel: (000) 000-0000
THIS FINANCIAL CONSULTING AGREEMENT, made as of this ___ day of
_________, 1997, is by and between UStel, Inc., a Minnesota corporation (the
"Company"), with its principal place of business at 0000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 and B C Capital Corp., a Florida
corporation and an affiliate of Xxxxxx & Xxxxxxx Incorporated ("B C Capital"),
having its principal place of business at 000 X. Xxxxxxxx Xxxx., Xxxxx 0000,
Xxxxx, Xxxxxxx 00000.
R E C I T A L S:
- - - - - - - -
A. The Company is a public company with a class of equity
securities publicly traded, and desires to retain B C Capital to provide
certain financial consulting services.
B. B C Capital desires to provide certain financial consulting
services to the Company in accordance with the terms and conditions contained
hereinafter.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto hereby agree as follows:
1. CONSULTING SERVICES. During the term of this Agreement, B C
Capital is hereby retained by the Company to provide financial consulting
services to the Company, as said services relate to corporate finance matters.
B C Capital shall provide such financial consulting services as reasonably
requested by the Company during the term of this Agreement, provided that
nothing hereunder shall require B C Capital to devote a minimum number of hours
per calendar month toward the performance of services hereunder. Unless
otherwise agreed to by B C Capital, all services hereunder shall be performed
by B C Capital, in its sole discretion, at its principal place of business or
other offices. Notwithstanding anything contained herein to the contrary, the
services to be performed by B C Capital hereunder may be performed by any
employee of or consultant to B C Capital.
2. TERM. The term of this Agreement shall be for three years
commencing as of the date first written above and terminating one day prior to
the third anniversary hereof. Thereafter, this Agreement shall be renewed for
subsequent one year terms upon mutual agreement of the parties.
2
-2-
3. COMPENSATION. In consideration for the performance of services
hereunder, the Company hereby agrees to pay B C Capital the aggregate sum of one
percent (1%) of the gross proceeds raised in the public offering of the
Company's securities (the "Public Offering") pursuant to the Prospectus which
comprises part of Registration No. 333-12981 filed with the Securities and
Exchange Commission. Such amount shall be paid upon the closing of the Public
Offering.
4. FINDER'S FEE. In the event the Company effectuates a corporate
restructuring, merger, joint venture, acquisition or similar transaction,
subsequent to the date hereof and on or prior to one year from the date of
termination of this Agreement, irrespective of any reason for such termination,
then the Company hereby agrees to pay B C Capital the following cash
consideration, which payment shall be due and payable in cash on the date of
any such closing with respect thereto:
5% of the consideration from $1 and up to $5,000,000, plus
4% of the consideration in excess of $5,000,000 and up to
$10,000,000, plus
3% of the consideration in excess of $10,000,000 and up to
$15,000,000, plus
2% of the consideration in excess of $15,000,000 and up to
$20,000,000, plus
1% of the consideration paid in excess of $20,000,000.
For purposes of this Agreement, "consideration" shall mean the value of
the transaction described herein and shall include all cash, the principal of
any notes executed as part of the purchase price for such acquisition, the
value, as determined by the mutual agreement of the Board of Directors of the
Company and B C Capital, of any securities paid or exchanged in connection with
the transaction, and the amounts of any loans or other obligations owed by the
acquired entity and which are paid or assumed by the acquiring entity as part
of the purchase price for the acquisition.
In the event B C Capital (or its affiliate) agrees to assist the Company
in raising equity and/or debt to finance an acquisition, the parties hereto
hereby agree that the compensation to be paid to B C Capital (or its affiliate)
for said assistance shall be the subject of an agreement, the terms of which are
to be mutually agreed to by and between the parties hereto.
5. RIGHT OF FIRST REFUSAL. For a period of three years from the
date of this Agreement, the Company hereby grants to Xxxxxx & Xxxxxxx,
Incorporated ("Xxxxxx & Xxxxxxx") the right to act as the Company's exclusive
managing underwriter or placement agent, as the case may be, in any public
offering(s) and/or any private placement(s) to be effectuated by or on behalf
of the Company or any subsidiary or affiliate, on such terms no less favorable
than any other underwriter, broker-dealer, or placement agent, and with such
compensation to be determined on a deal-by-deal basis. In the event Xxxxxx &
Xxxxxxx elects not to participate in any such financing and the terms thereof
are then subsequently changed, the Company shall xxxxx Xxxxxx & Xxxxxxx the
opportunity to act as the exclusive managing underwriter or placement agent, as
the case may be, in any such financing as modified. Notwithstanding
B C CAPITAL CORP.
3
-3-
anything contained in this Section 5 to the contrary, nothing hereunder shall
obligate Xxxxxx & Xxxxxxx to participate in any such financing.
6. REPRESENTATIONS OF THE COMPANY. The Company hereby represents
and warrants that any and all information supplied hereunder to B C Capital in
connection with any and all services to be performed hereunder by B C Capital
for and on behalf of the Company shall be true, complete and correct as of the
date of such dissemination and shall not fail to state a material fact not
necessary to make any of such information not misleading. The Company hereby
acknowledges that the ability of B C Capital to adequately provide financial
consulting services hereunder is dependent upon the prompt dissemination of
accurate, correct and complete information to B C Capital. The Company further
represents and warrants hereunder that this Agreement and the transactions
contemplated hereunder, including the issuance of the warrants hereunder, have
been duly and validly authorized by all requisite corporate action; that the
Company has the full right, power and capacity to execute, deliver and perform
its obligations hereunder; and that this Agreement, upon execution and delivery
of the same by the Company, will represent the valid and binding obligation of
the Company enforceable in accordance with its terms. The representations and
warranties set forth herein shall survive the termination of this Agreement.
7. INDEMNIFICATION. See Exhibit A attached hereto.
8. CONFIDENTIALITY. See Exhibit A attached hereto.
9. INDEPENDENT CONTRACTOR. See Exhibit A attached hereto.
10. AMENDMENT. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is evidenced by a
written instrument, executed by the party against which such modification,
waiver, amendment, discharge, or change is sought.
11. NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person or transmitted by facsimile transmission or on the third
calendar day after being mailed by United States registered or certified mail,
return receipt requested, postage prepaid, to the addresses herein above first
mentioned or to such other address as any party hereto shall designate to the
other for such purpose in the manner hereinafter set forth.
12. ENTIRE AGREEMENT. This Agreement contains all of the
understandings and agreements of the parties with respect to the subject matter
discussed herein. All prior agreements, whether written or oral, are merged
herein and shall be of no force or effect.
13. SEVERABILITY. The invalidity, illegality or unenforceability
of any provision or provisions of this Agreement will not affect any other
provision of this Agreement, which will remain in full force and effect, nor
will the invalidity, illegality or unenforceability of a portion of any
provision of this Agreement affect the balance of such provision. In the event
hat any one or more of the provisions contained in this Agreement or any
portion thereof shall for any
B C CAPITAL CORP.
4
-4-
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.
14. CONSTRUCTION AND ENFORCEMENT. This Agreement shall be
construed in accordance with the laws of the State of Florida, without
application of the principles of conflicts of laws. If it becomes necessary
for any party to institute legal action to enforce the terms and conditions of
this Agreement, the successful party will be awarded reasonable attorneys' fees
at all trial and appellate levels, expenses and costs.
15. BINDING NATURE. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties, and their
respective successors and assigns.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, including facsimile signatures which shall be deemed as original
signatures. All executed counterparts shall constitute one Agreement,
notwithstanding that all signatories are not signatories to the original or the
same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
UStel, Inc., a Minnesota corporation
By:
---------------------------------------
Name:
Title:
B C Capital Corp., a Florida corporation
By:
---------------------------------------
Xxxxx X. Xxxxxx, President
B C CAPITAL CORP.
5
EXHIBIT A
INDEMNIFICATION; CONFIDENTIALITY; AND INDEPENDENT CONTRACTOR STATUS
1. (a) The Company hereby agrees to indemnify, defend and hold
harmless B C Capital, its officers, directors, principals, employees,
affiliates, and shareholders, and their successors and assigns from and against
any and all claims, damages, losses, liability, deficiencies, actions, suits,
proceedings, costs or legal expenses (collectively the "Losses") arising out
of or resulting from: (i) any breach of a representation, or warranty by the
Company contained in the attached Agreement; or (ii) any activities or services
performed hereunder by B C Capital, unless such Losses were the result of the
gross negligence, intentional misconduct or gross misconduct of B C Capital or
were the result of any information supplied by B C Capital; or (iii) any and
all costs and expenses (including reasonable attorneys' and paralegals' fees)
related to the foregoing, and as more fully described below.
(b) If B C Capital receives written notice of the commencement
of any legal action, suit or proceeding with respect to which the Company is or
may be obligated to provide indemnification pursuant to this Paragraph, B C
Capital shall, within thirty (30) days of the receipt of such written notice,
give the Company written notice thereof (a "Claim Notice"). Failure to give
such Claim Notice within such thirty (30) day period shall not constitute a
waiver by B C Capital of its right to indemnity hereunder with respect to such
action, suit or proceeding, unless the defense thereof is prejudiced thereby.
Upon receipt by the Company of a Claim Notice from B C Capital with respect to
any claim for indemnification which is based upon a claim made by a third party
("Third Party Claim"), the Company may assume the defense of the Third Party
Claim with counsel of its own choosing, as described below. B C Capital shall
cooperate in the defense of the Third Party Claim and shall furnish such
records, information and testimony and attend all such conferences, discovery
proceedings, hearings, trial and appeals as may be reasonably required in
connection therewith. B C Capital shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of B C Capital unless the Company shall not have with reasonable
promptness employed counsel to assume the defense of the Third Party Claim, in
which event such fees and expenses shall be borne solely by the Company. The
Company shall not satisfy or settle any Third Party Claim for which
indemnification has been sought and is available hereunder, without the prior
written consent of B C Capital, which consent shall not be unreasonably
withheld or delayed and which shall not be required if B C Capital is granted a
release in connection therewith. If the Company shall fail with reasonable
promptness to defend such Third Party Claim, B C Capital may defend, satisfy or
settle the Third Party Claim at the expense of the Company (but subject to its
consent which shall not be unreasonably withheld) and the Company shall pay to
B C Capital the amount of any such Loss within ten (10) days after written
demand therefor. The indemnification provisions hereunder shall survive the
termination of the attached Agreement.
2. B C Capital agrees that all non-public information pertaining
to the prior, current or contemplated business of the Company are valuable and
confidential assets of the Company. Such information shall include, without
limitation, information relating to customer lists, bidding procedures,
intellectual property, patents, trademarks, trade secrets, financing techniques
and sources and such financial statements of the Company as are not
B C CAPITAL CORP.
6
-6-
available to the public. B C Capital, its officers, directors, employees,
agents and shareholders shall hold all such information in trust and confidence
for the Company and shall not use or disclose any such information for other
than the Company's business and shall be liable for damages incurred by the
Company as a result of the use or disclosure of such information by B C
Capital, its officers, directors, employees, agents or shareholders for any
purpose other than the Company's business, except (i) where such information is
publicly available or later becomes publicly available other than through a
breach of the attached Agreement, or (ii) where such information is
subsequently lawfully obtained by B C Capital from a third party or parties, or
(iii) if such information is known to B C Capital prior to the execution of the
attached Agreement, or (iv) as may be required by law. The terms of this
Section 2 of Exhibit A shall survive the termination of the attached Agreement.
3. It is expressly understood and agreed that B C Capital shall,
at all times, act as an independent contractor with respect to the Company and
not as an employee or agent of the Company, and nothing contained in the
attached Agreement shall be construed to create a joint venture, partnership,
association or other affiliation, or like relationship, between the parties.
It is specifically agreed that the relationship is and shall remain that of
independent parties to a contractual relationship and that B C Capital shall
have no right to bind the Company in any manner. In no event shall either
party be liable for the debts or obligations of the other except as otherwise
specifically provided in the attached Agreement. B C Capital shall not have
any claim under the attached Agreement, or otherwise against the Company for
vacation pay, paid sick leave, retirement benefits, social security, worker's
compensation, health, disability, unemployment insurance benefits, or other
employee benefits of any kind. B C Capital understands and agrees that: (i) B
C Capital will not be treated as an employee of the Company for Federal tax
purposes; (ii) the Company will not withhold on B C Capital's behalf any sums
for income tax, unemployment insurance, social security or any other
withholding pursuant to any law or requirement of any governmental body, or
make available any of the benefits afforded to employees of the Company; (iii)
all of such payments, withholdings or benefits, if any, are B C Capital's sole
responsibility; and (iv) B C Capital will indemnify and hold harmless the
Company from any and all loss or liability arising fro its failure to make such
payments, withholdings and benefits, if any. In the event the Internal Revenue
Service or any other governmental agency should question or challenge B C
Capital's independent contractor status, the parties hereby agree that both B C
Capital and the Company shall have the right to participate in any discussion
or negotiation occurring with such agency or agencies, regardless of with whom
or by whom such discussions or negotiations are initiated.
B C CAPITAL CORP.
