Former Chief Executive Officer
1. Parties Involved: The party signing below as client (Client) engages Stillwater Capital Corporation (SCC) as an independent contractor to assist Client and/or its shareholders, principals, subsidiaries, partnerships and other related parties (Affiliates) to advise them in regard to a Transaction.
2. Services: SCC will identify to Client potential Acquirers who SCC deems suitable for the intended Transaction. Client will provide SCC with a list of potential Acquirers who Client deems suitable for the intended Transaction. SCC will provide the Services described in this Agreement. SCC makes no representation, express or implied, that it will effect a Transaction as a result of these Services.
3. Exclusivity: Client agrees that during the term of this Agreement SCC shall be its exclusive representative in contacting and negotiating with potential Acquirers. During the term of this agreement Client will immediately refer to SCC the names and relevant information of all potential Acquirers that it in any way becomes aware of. All such parties will be an Acquirer Subject To This Agreement. Client understands and agrees that exclusive representation means that if Client or any other person finds an Acquirer then Client must still pay SCC the full amount of all of SCC’s fees, regardless of any specific involvement of SCC.
4. Offers: CLIENT HAS THE SOLE RIGHT TO ACCEPT OR REJECT ANY OFFER RECEIVED.
5. Success Fee: If a Transaction is consummated with an Acquirer Subject To This Agreement, then Client shall pay SCC a success fee (Success Fee) based on the total face value of Consideration received by Client and/or its Affiliates, directly or indirectly, in connection with the Transaction. The amount of the Success Fee shall be calculated as:
SCC’s Success Fee is payable in certified funds simultaneously with Closing. The total Success Fee to be paid to SCC at closing shall not be less than $200,000 (Minimum Closing Payment) after all deductions. If a portion of Consideration cannot be calculated at Closing, such as royalty or earn-out, then the portion of SCC’s Fee related to such Consideration shall be paid to SCC within three (3) business days of the date when that portion of Consideration was received by Client.
6. Non-Refundable Milestone Fee: Client shall pay SCC a non-refundable Milestone Fee of $30,000 upon Client’s acceptance of an Acquirer Subject To This Agreement’s letter of intent (or similar document) which shall be deducted from the Success Fee provided it does not reduce the amount paid to SCC at Closing below the Minimum Closing Payment.
7. Non-refundable Work Fee: Upon signing of this Agreement, Client shall pay SCC a non-refundable work fee of $29,000.
8. Out-of-pocket Expenses: Client agrees to reimburse, within 10 days of invoice, the out-of-pocket expenses incurred on behalf of Client by SCC.
9. Term: This Agreement shall remain in effect for 12 months from this date and shall continue thereafter until terminated by either party upon thirty (30) days prior written notice.
10. Entire Agreement: This is the entire Agreement between SCC and Client pertaining to its subject matter and supersedes all prior agreements, representations and understandings of the parties. The attached Standard Terms and Conditions f orm part of this Agreement.
No modification of this Agreement shall be binding unless agreed to in writing by the parties.
If any provision of this Agreement is held to be invalid or unenforceable, such holding shall not affect the validity or enforceability of any other provision.
Agreed and Accepted this day of ,
|Stillwater Capital Corporation||Client: Apple Corporation|
|and its Shareholders|
Former Chief Executive Officer
Acquirer: An Acquirer is a person, group of persons, entity or group of entities that considers entering, does enter, or could enter into a Transaction whether or not as a principal or on behalf of some other person, firm or corporation. This specifically includes related parties such as, existing owners, management members, and employees.
Acquirers Subject to This Agreement: Acquirers Subject to This Agreement include all potential Acquirers that, during the term of this Agreement:
The determination of whether an Acquirer is an Acquirer Subject To This Agreement is in no way dependant upon SCC’s involvement with or knowledge of that Acquirer.
Advertising: Following completion of a Transaction, SCC may place advertisements regarding the Transaction, may make reference to the Transaction on its website and refer to its advisory relationship with Client in its marketing materials.
Arbitration: Any controversy, dispute, or claim between the parties relating to this Agreement shall be resolved by binding arbitration in accordance with The Arbitration Act R.S.O. 1991.
Authority: The person(s) executing this Agreement on Client’s behalf hereby represents and warrants, knowing that SCC will rely thereon, that the signature is duly authorized to bind the Client to the Agreement.
Collection Costs: Client agrees to pay SCC’s legal and other collection costs (in the event SCC prevails in any action to enforce collection of amounts due or other rights under this Agreement). Client agrees to pay interest at 1.75% per month compounded monthly (23.1% annually), on any unpaid balance from the original due date until the date paid.
Consideration: Consideration includes all elements of value, directly or indirectly, paid, exchanged, assumed or otherwise given to Client, or to other parties for the benefit of Client, the owners of the Client, or its or their designee(s) at any time, however structured, whether payable at or after Closing or deferred or contingent, including, but not limited to:
When calculating the Success Fee:
Currency: All amounts are in Canadian Dollars.
Disclosure of Fee: SCC shall have the right, but not the obligation, to disclose Client’s Fee responsibility to SCC to any party to the Transaction.
Indemnification: Recognizing that transactions of the type contemplated by this Agreement sometimes result in litigation and that SCC’s role is advisory, Client agrees to indemnify SCC, and its officers, directors, employees, agents and affiliates against any suits, losses, claims, damages or liabilities, joint or several, including shareholder actions, to which the indemnified parties may be subject in connection with the services rendered, and to reimburse the indemnified parties for any legal or other expenses reasonably incurred by them in connection therewith. However, Client shall not be responsible for any loss, claim, damage or liability resulting from the willful malfeasance or gross negligence of an indemnified party.
Information: Client shall furnish to SCC complete and accurate current and historical business information, and shall promptly inform SCC of any changes which may materially affect its business or SCC’s services under this Agreement. Client warrants the accuracy of all information provided and to be provided by Client to SCC in the course of activities under this Agreement.
Jurisdiction: This Agreement shall be interpreted under and governed by the laws of the Province of Ontario.
No Contact: Client agrees that during the term of this Agreement and for a period of 24 months thereafter that without the specific prior written consent of SCC neither Client nor any of its Affiliates or their officers, directors, employees agents or representatives shall independently contact or enter into, directly or indirectly, any discussions or negotiations relative to any Transaction with any Acquirer Subject To This Agreement.
Notification of Sale: As part of the Closing procedures and documentation for any Transaction, Client agrees to:
Client hereby irrevocably authorizes the disbursing agent for the Transaction to pay SCC’s Success Fee upon their execution of the Transaction documents. At SCC’s request, Client will promptly sign and deliver to SCC a signed irrevocable letter of direction authorizing the disbursing agent for the Transaction to pay SCC’s Success Fee. However, such authorization will not relieve Client of the responsibility for the payment of SCC’s Success Fee, until it is actually paid.
Options & Earnest Money: Any Forfeited option, earnest, money or back-out penalty is to be divided equally with SCC.
Post Termination Protection: Client’s obligation to pay SCC’s Milestone Fee and Success Fee survive for the 12 period following the effective date of the termination of this Agreement (Post Termination Period).
Specifically, during the Post Termination Period:
Successors and Assigns: This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective assigns and representatives.
Survival of Provisions: All provisions of this Agreement and the Standard Terms and Conditions survive the Termination of this Agreement.
Services: SCC agrees to use its best efforts during the term of this Agreement to identify potential Acquirers for one or more Transactions. SCC will provide some or all of the following services (Services) based on its sole discretion: write a one page descriptive summary about Client; prepare a memorandum describing Client’s business, research potential Acquirers; contact potential Acquirers; screen potential Acquirers; execute confidentiality agreements; mail memorandum to potential Acquirers; conduct conference calls and meetings with potential Acquirers; evaluate offers and negotiate letters of intent; assist with any due diligence issues; coordinate as necessary with Client’s other professionals and provide advisory services to the Client in connection with a sale, merger, or other business combination.
Client will cooperate with SCC in carrying out the purpose of this Agreement, including immediately referring to SCC all inquiries regarding the availability of the business for a merger or acquisition and providing SCC with a list of all of the potential Acquirers who Client knows that are or might be suitable for the intended Transaction.
Taxes: All fees and expenses will be subject to applicable taxes.
Time of the Essence: Time is of the essence for the parties’ obligations under this Agreement.
Transaction: A Transaction includes the following (or any combination thereof), without regard to form, regardless of whether it involves all or part of Client’s business:
“Client’s business” includes, but is not limited to, shares and assets owned directly or indirectly by Client and its Affiliates.
Any Transaction occurring as a result of an agreement between Client’s shareholders or Affiliates (e.g. right of first refusal, shareholder agreement, options, etc.) is specifically included in the definition of a Transaction.