EXHIBIT 10.74
MCG PARTNERS, INC.
0000 X. XXXXXXXX XXXX XXXX
XXXX XXXXX, XXXXXXX 00000
April 1, 2001
Xx. Xxxxxx Xxxxxxx
President
Travlang, Inc.
0000 X. Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Dear Xx. Xxxxxxx:
The purpose of this letter of agreement ("Agreement") is to outline the terms
and conditions under which MCG Partners, Inc. ("MCG") will provide advisory and
related services ("Services") to Travlang, Inc. (the "Company"), for the
Engagement Period (as hereinafter defined). The terms pursuant to which MCG is
to assist and advise the Company in connection with the Services are:
1. Services: The Company hereby engages MCG to act as its exclusive
advisor in matters relating to (i) mergers and acquisitions; (ii)
corporate finance activities; (iii) disposition of Company assets;
(iv) all other matters as may be agreed upon between the Company and
MCG.
2. Engagement Period: Eighteen (18) months. The period shall
automatically renew for an additional Ninety (90) days if notice is
not given Ninety (90) days prior to the end of the Engagement Period.
3. Compensation: In consideration for MCG's services, MCG shall be
entitled to receive, and the Company hereby agrees to pay MCG the
following:
a. A consulting fee of $7,500 per month for the Engagement Period
and any extensions thereof; plus
b. The Company shall reimburse MCG all reasonable expenses up to
$1,000 per month. Any amount over this monthly limit shall be
pre-approved by the Company prior to expenditure; plus
c. MCG shall be entitled to, and the Company agrees to pay a merger
and acquisition fee equivalent to five (5%) percent of the
consideration involved in any transaction (including mergers,
acquisitions, joint ventures and any other business combination
for the Company) consummated by the Company, such fee to be paid
at the closing of the transaction to which it relates. Such fee
shall be payable in common stock of the Company, or at MCG's
options in warrants to purchase common stock with an exercise
price of $.01 per share and containing cashless exercise
provisions. The Company agrees to register such shares for resale
using Form S-8 if available or such other form as is appropriate.
Such registration shall be filed within 30 days of the
consummation of any transaction. This fee shall extend beyond the
Engagement Period for a period of one (1) year in the event the
Company consummates a transaction with an entity introduced by
MCG during the Engagement Period.
4. Designated Board Member: Upon acknowledgement of this letter the
Company will notify MCG of all Board activities and permit MCG to
designate an advisor to attend any and all board functions as an
ex-officio member. In the event MCG undertakes any financing activity
and is successful in the financing effort for the Company, MCG shall
have the right to name one board member upon the completion of any
financing.
5. Indemnification: The Company shall indemnify MCG under its standard
indemnification provisions attached hereto and made a part hereof.
6. Termination: This letter agreement may not be terminated within Ninety
(90) days after signing. Thereafter, either party may terminate this
Agreement upon Ninety (90) days prior written notice without liability
or continuing obligation to the Company or to MCG (except for any
compensation earned or to be received by MCG as provided for in
Section 3 or in Section 4, and for reimbursement for expenses as
provided for in Section 3c above). Neither termination nor completion
of the Financing shall affect the provisions of Sections 3, 4 and 5,
and this section 7.
7. Governing Law: The validity and interpretation of the Agreement shall
be governed by the law of the State of Florida applicable to
agreements made to be fully performed therein. MCG and the Company
will attempt to settle any claim or controversy arising out of this
Agreement through consultation and negotiation in good faith and a
spirit of mutual cooperation. If those attempts fail, then the dispute
will be mediated by a mutually acceptable mediator to be chosen by MCG
and the Company within 15 days after written notice from either party
demanding mediation. Neither party may unreasonably withhold consent
to selection of a mediator, and the parties will share the costs of
the mediation equally. Any dispute which the parties cannot resolve
through negotiation or mediation within six months of the date of the
initial demand for it by one of the parties may then be submitted to
binding arbitration under the rules of the American Arbitration
Association for resolution. The use of mediation will not be construed
under the doctrine of latches, waiver or estoppel to affect adversely
the rights of either party. Nothing in this paragraph will prevent
either party from resorting to judicial proceedings if (a) good faith
efforts to resolve the dispute under these procedures have been
unsuccessful or (b) interim relief from a court is necessary to
prevent serious and irreparable injury.
8. Miscellaneous:
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(a) It is understood that the obligation of MCG is to use its best
efforts in all its activities, including any financing activity
and there is no obligation on the part of MCG to participate in
any such financing.
(b) The Company represents hereby that it is a sophisticated business
enterprise that has retained MCG for the limited purposes set
forth in this letter, and the parties acknowledge and agree that
their respective rights and obligations are contractual in
nature. Each party disclaims an intention to impose fiduciary
obligations on the other by virtue of the engagement contemplated
by this letter.
(c) MCG shall have the right to assign its rights and obligations to
an affiliated entity.
If the foregoing is acceptable, please sign a copy of this letter in the space
provided below and return the copy to the undersigned.
Very truly yours,
MCG Partners, Inc. By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President
Confirmed and Agreed
Travlang, Inc. By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
President
INDEMNIFICATION PROVISIONS
Travlang, Inc. (the "Company") agrees to indemnify and hold harmless
MCG, ("MCG") against any and all losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements
(and any and all actions, suits, proceedings and investigations in respect
thereof and any and all legal and other costs, expenses and disbursements in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the costs, expenses and
disbursements, as and when incurred of investigating, preparing or defending any
such action, suit, proceeding or investigation (whether or not in connection
with litigation in which MCG is a party), directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with MCG acting for
the Company, including without limitation, any act or omission by MCG in
connection with its acceptance of or the performance or non-performance of its
obligations under the Agreement dated April 1, 2001, between the Company and MCG
to which these indemnification provisions are attached and form a part (the
"Agreement"). The Company also agrees that MCG shall not have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with the engagement of MCG except to the extent that any
such liability is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from MCG
gross negligence or willful misconduct.
The indemnification provisions shall be in addition to any liability
which the Company may otherwise have to MCG or the persons indemnified below in
this sentence and shall extend to the following: MCG, its affiliated entities,
partners, employees, legal counsel, agents and controlling persons (within the
meaning of the federal securities laws), and the officers, directors, employees,
legal counsel, agents and controlling persons of any of them. All references to
MCG Partners in these indemnification provisions shall be understood to include
any and all of the foregoing.
If any action, suit, proceeding or investigation is commenced, as to
which MCG proposes to demand indemnification, it shall notify the Company with
reasonable promptness; provided, however, that any failure by MCG to notify the
Company shall not relieve the Company from its obligations hereunder except to
the extent that the Company is materially prejudiced thereby. If the Company so
elects, or is requested by MCG, the Company will assume the defense of such
action, suit, proceeding or investigation, including the employment of counsel
reasonably acceptable to MCG, and the payment of fees and disbursements of such
counsel. In the event, however, that the Company fails to promptly assume the
defense thereof with counsel reasonably acceptable to MCG Partners, or MCG
determines in its reasonable judgment that it has one or more defenses different
than or in addition to those of the Company, then MCG shall have the right to
retain one counsel (in addition to any local counsel) of its own choice to
represent it, and the Company shall pay the fees, expenses and disbursements of
such counsel; and such counsel shall, to the extent consistent with its
professional responsibilities, cooperate with the Company and any counsel
designated by the Company. The Company shall be liable for any settlement of any
claim against MCG made with the Company's written consent, which consent shall
not be unreasonably withheld. The Company shall not, without the prior written
consent of MCG, settle or compromise any claim, or permit a default or consent
to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as a conditional term thereof, the giving by the
claimant to MCG of an unconditional release from all liability in respect of
such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and MCG, on the other hand, shall contribute
to the losses, claims damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses, and disbursements, to which the indemnified
persons may be subject in accordance with the relative benefits received by the
Company, on the one hand, and MCG, on the other hand, and also the relative
fault of the Company. On the one hand, and MCG, on the other hand, in connection
with the statements, acts or omissions which resulted in such losses, claims,
damages obligations, penalties, judgments, awards, liabilities, costs, expenses
or disbursements and the relevant equitable considerations shall also be
considered. No person found liable for a fraudulent misrepresentation shall be
entitled to contribution from any person who is not also found liable for such
fraudulent misrepresentation. Notwithstanding the foregoing, MCG shall not be
obligated to contribute any amount thereunder that exceeds the amount of fees
previously received by MCG pursuant to this Agreement.
Neither termination nor completion of the engagement of MCG referred to
above shall these indemnification provisions which shall then remain operative,
and in full force and effect.
