Exhibit 10.2
August 15, 2002
Xx. Xxxxxxx X. Xxxxx
Chief Executive Officer
Vertica Software, Inc.
Austin, TX
Dear Xxxx:
This letter outlines the terms of agreement of the services that The Momentum
Solutions Group, LLC will deliver to Vertica Software, Inc.
1. Momentum Solutions, as an Independent vendor, will provide sales and
sales management services to Vertica on an as-needed basis. The scope
of services includes prospect contact and follow through for any
opportunity for Vertica software and services as presented to Momentum
Solutions by Vertica.
2. Momentum Solutions is a vendor, not an employee of the Company, and as
such no federal or state taxes, social security, unemployment
compensation or any other payments will be withheld from the
compensation.
3. The agreed upon compensation is One Hundred Twenty Five ($125.00)
dollars per hour. Momentum Solutions will provide a weekly accounting
of hours to Vertica Software.
4. Vertica Software will provide an advance payment of Two Thousand
dollars ($2,000) for sixteen (16) hours to Momentum Solutions. Xxxxx
worked will be credited to that amount. Upon completion of 75% of the
contracted amount (12 hours or $1,500). Vertica Software and Momentum
Solutions will determine the level of future effort and another
advance payment will be required.
5. Momentum Solutions agrees to receive payment for services in
free-trading stock of Vertica Software, Inc. The number of shares
shall be Fifty Thousand (50,000), which is based on an average value
of four cents ($0.04) per share.
AGREED:
/s/ Xxxxxxx X. Xxxxx 9/18/02 /s/ Xxxxx X. Xxxxxxxx 9/20/02
-------------------- ------- -------------------------------- -------
Xxxxxxx X. Xxxxx Date Xxxxx X. Xxxxxxxx Date
Chief Execution Officer Managing Director
Vertica Software, Inc. The Momentum Solutions Group LLC
LETTER OF UNDERSTANDING
PERSONAL AND CONFIDENTIAL
November 12, 2002
Xxxxxxx X. Xxxxx
President & CEO
VERTICA SOFTWARE, INC.
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Dear Xxxx:
We are pleased to set forth the terms of the engagement of Xxxxxx X. Xxxxxxxx,
by VERTICA SOFTWARE, INC. (the "Company") in connection with advising and
assisting the Company with (a) obtaining new financing (including senior debt
and subordinated debt) for the Company and/or any of its affiliates, (b)
refinancing or restructuring existing debt of the Company and/or any of its
affiliates, and (c) the recapitalization of the Company and/or any of its
affiliates (each a "Financial Transaction" and collectively the "Financial
Transactions"), as more fully set forth herein. This Agreement will confirm
Xxxxxx X. Xxxxxxxx'x engagement by the Company on the following terms and
conditions:
1. Services To Be Provided. Xxxxxx X. Xxxxxxxx will assist the Company as the
non-exclusive financial advisor in connection with Financial Transactions for
180 days from the date of this document signing. In connection with Xxxxxx X.
Xxxxxxxx'x activities on the Company's behalf, Xxxxxx X. Xxxxxxxx will
familiarize himself, to the extent reasonably necessary, with the business,
operations, properties, financial condition and prospects of the Company, and as
soon as reasonably practicable, complete an initial analysis of the Company's
operational viability. In connection with his role as financial advisor, Xxxxxx
X. Xxxxxxxx shall advise the Company on potential Financial Transactions and
assist the Company in obtaining the Financial Transactions the Company desires
to pursue. Such services shall include the following:
a. Capital Raising/Debt Activities. Xxxxxx X. Xxxxxxxx will assist the Company
in (i) developing a plan to restructure and/or refinance the Company's financial
structure, (ii) implement any such restructuring and/or refinancing plans
through discussions and negotiations with creditors (whether they be secured,
unsecured or trade creditors), shareholders and parties in interest and with
potential parties to any Financial Transaction; (iii) structuring and raising
new debt or equity securities issued by
Company; and (iv) evaluating any securities that might be issued in connection
with any restructuring or recapitalization plan.
b. Financial Advisory Services. Xxxxxx X. Xxxxxxxx will assist the Company in
such other financial advisory services as may be mutually agreed upon by Xxxxxx
X. Xxxxxxxx and the Company, including assisting the Company in negotiations
with senior lender concerning a loan amendment, forbearance and standstill
agreement.
2. Fees. In consideration for our services pursuant to this Agreement, Xxxxxx
X. Xxxxxxxx shall be entitled to receive, and the Company shall pay to Xxxxxx X.
Xxxxxxxx, the following compensation:
a. Engagement Fees. Upon the execution of this Agreement, the Company
shall pay to Xxxxxx X. Xxxxxxxx an engagement fee of payable in the
for of 350,000 restricted common shares of VERTICA SOFTWARE, INC. The
engagement fee shall be deemed earned when this Agreement is executed
by both parties hereto and shall be non-refundable.
b. Financial Transaction Fee. Upon the closing of any Financial
Transactions for the Company, the Company shall pay to Xxxxxx X.
Xxxxxxxx a cash fee (the "Financial Transaction Fee") equal to, the
aggregate, the following:
i. 2.0% of the principal amount of senior debt which is
obtained, refinanced, amended or restructured; and separately.
ii. 4.0% of the principal amount of all subordinated debt which
is obtained, refinanced, amended or restructured; and separately.
iii. 5.0% of the gross amount of any new equity securities issued
by the Company.
It should be noted that the Financial Transaction Fee is not a
cumulative fee but a fee for each type of capital raised.
For Example, if $800,000 equity were raised, the Financial
Transaction Fee would be $40,000 ($800,0000 X 5%) and no fee for
senior or subordinated debt.
The Financial Transaction Fee shall be due and payable by the Company
upon the closing of the subject Financial Transaction. Xxxxxx X.
Xxxxxxxx retains the option of taking the Financial Transaction fee in
the form of restricted common shares at the closing of the subject
Financial Transaction.
The number of restricted shares shall be the Financial Transaction Fee
divided by a 30% discount of the company stock's previous 30-day
average closing bid price.
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For example, an earned $40,000 Financial Transaction fee divided
a stock price of $0.07 (30% discount on the previous 30-day average
bid price of $0.10.) shall mean 571,428 restricted common shares.
Debt Reduction Fee. Upon the closing of any refinancing in which any
creditor (whether secured or unsecured creditor, trade creditor or
other creditor) agrees to accept as full payment an amount less than
the total actual amount it is then owed (including any "soft notes")
in accordance with the applicable loan documents, the Company shall
pay Xxxxxx X. Xxxxxxxx an additional fee (the "Debt Reduction Fee")
equal to 20% of the amount of any reduction of that total amount owed.
The Debt Reduction Fee shall be in addition to any Financial
Transaction Fee that may be owed to Xxxxxx X. Xxxxxxxx for such
refinancing.
c. Expenses. In addition to the fees described above, the Company agrees
to promptly reimburse Xxxxxx X. Xxxxxxxx upon request from time to
time, for pre-approved out-of-pocket expenses, (the "Expenses")
reasonably incurred by Xxxxxx X. Xxxxxxxx up to any aggregate maximum
of $5,000, which shall be itemized, unless the Company has agreed in
writing to a greater amount during the term of this engagement. Xxxxxx
X. Xxxxxxxx retains the option of taking the Expenses in the form of
restricted common shares. The number of shares shall be determined by
the expenses total divided by a 30% discount of the Company stocks
previous 30-day average closing bid.
3. Cooperation. In connection with Xxxxxx X. Xxxxxxxx'x activities on the
Company's behalf, the Company will cooperate with and will furnish Xxxxxx X.
Xxxxxxxx with all information and data concerning the Company and any Financial
Transaction (the "Information") which Xxxxxx X. Xxxxxxxx deems appropriate and
will provide Xxxxxx X. Xxxxxxxx with access to the Company's officers,
directors, employees, independent accountants and legal counsel. The Company
represents that to the best of it's knowledge, all information (a) made
available to Xxxxxx X. Xxxxxxxx by the Company or (b) contained in any filing by
the Company with any court or any government or regulatory agency, commission or
instrumentality each (an "Agency") will, at all times during the period of
engagement of Xxxxxx X. Xxxxxxxx, hereunder, be complete and correct in all
material respects and will not contain any untrue statement of material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances under which such statements are
made. The Company further represents and warrants that any projections will have
been prepared in good faith and will be based on assumptions, which, in light of
the circumstances under which they are made, are reasonable.
Company acknowledges and agrees that, in rendering its services hereunder,
Xxxxxx X. Xxxxxxxx will be using and relying on the information (and information
available from
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public sources and other sources deemed reliable by Xxxxxx X. Xxxxxxxx) without
independent verification thereof or independent appraisal of any of the
Company's assets. Xxxxxx X. Xxxxxxxx does not assume responsibility for the
accuracy or completeness of the information or any other information regarding
the Company or any Financial Transaction. Any advice rendered by Xxxxxx X.
Xxxxxxxx, pursuant to this Agreement may not be disclosed publicly by the
Company without Xxxxxx X. Xxxxxxxx'x prior written consent.
4. Indemnification. The Company agrees to indemnify Xxxxxx X. Xxxxxxxx in
accordance with the indemnification provisions attached to this Agreement as
Appendix A, which are incorporated herein and made a part hereof.
5. Other Matters.
a. The Company hereby acknowledges that it is a sophisticated
business enterprise that has retained Xxxxxx X. Xxxxxxxx for the
limited purposes set forth in this Agreement and the parties
acknowledge and agree that their respective rights and
obligations are contractual in nature. Each party disclaims and
intention to impose fiduciary obligations on the other by virtue
of the engagement contemplated by this Agreement.
b. This Agreement may be terminated with or without cause by Xxxxxx
X. Xxxxxxxx or the Company at any time upon receipt of written
notice by the other party to that effect. Upon termination of the
Agreement, neither party will have any liability or continuing
obligation to the other, except, that: (i) the indemnification
provisions of Exhibit A to this Agreement will survive any such a
termination and if a Financial Transaction is (1) consummated
from the date of termination through the twelve (12) month
anniversary of such termination or (2) consummated with a
Designated Party from the (12) month anniversary of such
termination through the twenty-four (24) month anniversary of
such termination (or if a definitive agreement with respect to
such a Financial Transaction which is subsequently consummated is
entered into during such periods), the Company will remain
obligated to pay Xxxxxx X. Xxxxxxxx, the Financial Transaction
Fee and any other fees earned in accordance with the terms of
this Agreement; provided, however, that if (a) Xxxxxx X.
Xxxxxxxx, terminates this Agreement without Cause (as hereafter
defined), or (b) the Company terminates this Agreement with
Company Cause (as hereafter defined), Xxxxxx X. Xxxxxxxx, shall
not thereafter be entitled to such Financial Transaction Fee. For
purposes of this Agreement only, "Cause" shall mean and include
the Company's breach of any term of this Agreement or the failure
of the Company to provide with the information requested in
connection with the Company or a potential Financial Transaction.
For purposes of this Agreement, "Company Cause" shall mean and
include only Xxxxxx X. Xxxxxxxx'x xxxxx negligence, willful
misconduct, or substantial nonperformance of the services
contemplated
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by this Agreement. For purposes of this Agreement, "Designated
Party" shall mean and include (I) any entity that Xxxxxx X.
Xxxxxxxx designates to the Company, from time to time, as having
been contacted by Xxxxxx X. Xxxxxxxx in connection with his
Financial Transaction activities and (II) any affiliate, insider,
or person controlled by or under the control of any of the
aforementioned foregoing.
c. Without prior consent of the Company, Xxxxxx X. Xxxxxxxx shall
not disclose any confidential information concerning the Company
to any prospective provider of capital or any other person who
has not executed an agreement to keep such information
confidential.
d. The validity and interpretation and enforcement of this Agreement
shall be governed by the law of the State of Texas without
reference to conflict of law principles, (applicable to
agreements made and to the be fully performed therein). The
Company hereby irrevocably submits to any court located in
Tarrant County in the State of Texas as the exclusive
jurisdiction of any suit, action or other proceeding arising out
of this Agreement, or any the agreements or transactions
contemplated hereby, which is brought by or against the Company,
and (I) hereby irrevocably agrees that all claims in respect of
an suit, action or proceeding may be heard and determined in any
such court and (II) to the extent that the Company has acquired,
or hereafter may acquire, any immunity from jurisdiction of any
such court or from any legal process therein, the Company hereby
waives, to the fullest extent permitted by legal, such immunity.
The Company hereby waives and agrees not to assert in any such
suit, action or proceeding, in each case, to the fullest extent
permitted by applicable law, any claim that (a) the Company is
not personally subject to the jurisdiction of any such court, (b)
the Company is immune from any legal process (whether through
service or notice, attachment prior to judgment, attachment in
aid of execution or otherwise) with respect to the Company or its
property or (c) any such suit, action or proceeding is brought in
an inconvenient forum.
e. The benefits of this Agreement shall inure to the respective
successors and assigns of the parties hereto and of the
indemnified parties hereunder and their successors and assigns
and representatives, and the obligations and liabilities assumed
in this Agreement by the parties hereto shall be binding upon
their respective successors and assigns. No fee payable to any
other financial advisor by the Company or any other company in
connection with the subject matter of this engagement shall
reduce or otherwise affect any fee payable hereunder to Xxxxxx X.
Xxxxxxxx.
f. Xxxxxx X. Xxxxxxxx and the Company, acting through senior
management, shall cooperate fully in the engagement contemplated
by this Agreement; provided that any written reports or
recommendations
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shall be timely prepared for submission and, if appropriate,
approval by the Company's Board of Directors.
If the foregoing correctly sets forth our understanding, we would appreciate you
signing the enclosed copy of this Agreement in this space provided and returning
it to us.
Very truly yours,
By /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Confirmed and Agreed to this 20 day of Nov, 2002
VERTICA SOFTWARE, INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
President & CEO
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APPENDIX A
This Appendix A is incorporated in and made a material part of that certain
Letter of Understanding (the "Letter Agreement") between Xxxxxx X. Xxxxxxxx and
VERTICA SOFTWARE, INC. (the "Company"). In the event that Xxxxxx X. Xxxxxxxx,
becomes involved in any capacity, other than as a plaintiff, in any action,
proceeding or investigation brought by or against any person, including
stockholders of the Company, or any related entity in connection with any matter
related to the assignment described in the Letter Agreement will periodically
(but in no event less frequently than quarterly each year), the Company
periodically will subsequent proceeding, reimburse Xxxxxx X. Xxxxxxxx for its
legal and other expenses (including the cost of any investigation and
preparation) reasonably incurred in connection therewith; provided, however,
that it is found in any such action, proceeding or investigation, or in any that
a loss, claim, damage or liability of Xxxxxx X. Xxxxxxxx has resulted from gross
negligence or bad faith of Xxxxxx X. Xxxxxxxx. in performing the services which
are the subject of the Letter Agreement. Xxxxxx X. Xxxxxxxx shall repay such
portion of the reimbursed amounts that is attributable to expenses incurred in
relation to the act or omission of Xxxxxx X. Xxxxxxxx which is the subject of
such finding. The Company also will indemnify and hold Xxxxxx X. Xxxxxxxx
harmless against any losses, claims, damages, or liabilities to any such person
in connection with any matter related to the assignment described in the Letter
Agreement, except to the extent that any such loss, claim, damage or liability
results from the gross negligence or bad faith of Xxxxxx X. Xxxxxxxx in
performing the services that are the subject of the Letter Agreement. If for any
reason the foregoing indemnification is partially unavailable to Xxxxxx X.
Xxxxxxxx as a result of his bad faith or gross negligence, or is insufficient to
hold him harmless, then the company shall contribute to the amount paid by
Xxxxxx X. Xxxxxxxx as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative economic interests of the
Company and its stockholders on the one hand and Xxxxxx X. Xxxxxxxx on the other
hand in the matters contemplated by the Letter Agreement as well as the relative
fault of the Company and Xxxxxx X. Xxxxxxxx with respect to loss, claim, damage
or liability and any other relevant equitable considerations; provided, however,
that in no event shall Xxxxxx X. Xxxxxxxx, be required to contribute any amounts
in excess of the fees received by it hereunder. The Company shall be liable for
any settlement of any claim against Xxxxxx X. Xxxxxxxx made with the Company's
written consent, which consent shall not unreasonably be withheld, and the
Company shall not without the prior written consent of Xxxxxx X. Xxxxxxxx which
consent shall not be unreasonably withheld, settle or compromise any claim or
permit a default or consent to the entry of judgment in respect thereof, unless
such settlement, compromise or consent includes, as an unconditional term
thereof, the giving by the claimant to Xxxxxx X. Xxxxxxxx, of an unconditional
release from any and all liability in respect to such claim. Xxxxxx X. Xxxxxxxx
shall have the right to retain counsel of his own choice to represent him in
connection with any matter as to which the indemnity and contribution
obligations of the Company under this Appendix A shall apply and shall pay the
costs and expenses of such counsel in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any affiliate of Xxxxxx X. Xxxxxxxx, and the directors, agents, employees and
controlling persons (if any), as the case may be, of Xxxxxx X. Xxxxxxxx, and any
such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, Xxxxxx
X. Xxxxxxxx, any such affiliate and any such person. The Company also agrees
that neither Xxxxxx X. Xxxxxxxx nor any of such affiliates, directors, agents,
employees or controlling persons shall have any liability to the Company and its
stockholders for or in connection with any matter referred to in the Letter
Agreement except to the extent that any losses, claims, damages, liabilities or
expenses incurred by the Company result from the gross negligence or bad faith
of Xxxxxx X. Xxxxxxxx in performing the services that are subject of the Letter
Agreement. The provisions of this Appendix A shall survive any termination or
completion of the engagement provided by the Letter Agreement and the Letter
Agreement shall be governed by and construed in accordance with the laws of
Texas without regard to principles of conflicts of laws.
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