Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 174 807K
2: EX-10.8 Consulting Agreement, Dated as of April 19, 2002 6 30K
3: EX-12 Calculation of Deficiency of Earnings 2± 15K
4: EX-21 List of Subsidiaries of the Company 1 8K
5: EX-25 Statement of Eligibility and Qualification 6 40K
EX-10.8 — Consulting Agreement, Dated as of April 19, 2002
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EXHIBIT 10.8
Communication Technology Advisors LLC
18 Corporate Woods Boulevard
Third Floor
Albany, New York 12211
Phone (518) 462-2632o Fax (518) 462-3045
April 19, 2002
Via Facsimile
Globix Corporation
139 Centre Street
New York, New York 10013
Attention: Peter L. Herzig
Chief Executive Officer
Dear Peter:
The purpose of this letter is to confirm the understanding and
agreement (the "Agreement") of Globix Corporation (the "Company" or "Globix") to
engage Communication Technology Advisors LLC ("CTA") as a consultant to the
Company, under the terms and conditions herein.
1. Engagement. CTA is being engaged to act as the Office of the
Chief Restructuring Officer. As such, CTA will perform the following services
(the "Services") as may be requested by the Company's Board of Directors:
a) Assist senior management with the overall implementation of the
Company's business plan;
b) Assist senior management with the operations of the Company,
including review and recommendations with respect to the
Company's sales and marketing efforts and network improvements
and maintenance, and monitoring operating performance of the
Company's monthly operating results;
c) Review with, and make recommendations to, senior management with
respect to the financial condition of the Company, including
monitoring revenue levels, assisting with the reduction of
liabilities and reviewing capital expenditures;
d) Provide advice and assistance with respect to customer and vendor
relations of the Company;
e) Assessing and making recommendations to senior management with
respect to strategic direction and alternatives for the Company;
Globix Corporation
April 19, 2002
Page 2
f) Provide advice and assistance with regard to general industry and
competitive conditions in the business areas in which the Company
operates; and
g) Provide such other business advice and assistance as may be
reasonably requested by the Board of Directors during the terms
hereof.
CTA shall perform the Services contemplated hereunder in a good and workmanlike
manner.
2. Term. The term of the engagement contemplated by this Agreement
(the "Term") shall commence on April 19, 2002 (the "Commencement Date") and end
on October 31, 2002, unless earlier terminated in accordance herewith. Any prior
written agreement between the Company and CTA are terminated as of April 19,
2002.
3. Fees and Expenses. The Company shall pay CTA a monthly fee of
$65,000 beginning on Commencement Date for the term of the engagement. An
initial payment of $86,666.67 shall be payable contemporaneously with the
execution of this Agreement by wire transfer in accordance with written
instructions delivered by CTA to the Company, and shall cover the period from
Commencement Date through May 31, 2002. All subsequent monthly fees are due in
advance on the 1st day of the month through wire transfer, beginning with June
1, 2002.
In addition to the monthly fees contemplated by the foregoing
paragraph, upon the Company achieving the Success Milestone (as defined below),
CTA shall also be entitled to a success fee (the "Success Fee") equal to
$1,500,000. The Success Fee shall be payable in cash as soon as practicable
following the achievement by the Company of the Success Milestone.
Notwithstanding any termination of this Agreement, if, during the six-month
period following such termination, the Success Milestone is achieved by the
Company, CTA shall be entitled to the Success Fee as if this Agreement was still
in effect. For purposes of this Agreement, "Success Milestone" shall mean that
the Company shall have (i) achieved the results outlined in the 90-Day Operating
Plan adopted by the Company and attached hereto as Exhibit A, and (ii)
consummated a sale, merger or a material strategic transaction (as determined by
the Board of Directors). Should the Company exercise its right to terminate this
Agreement as set forth herein, for a period of six month following such
termination, any Success Milestone achieved by the Company shall entitle CTA to
the Success Fee as if this Agreement was still in effect. The provisions of this
paragraph shall survive any termination of this Agreement in accordance with the
terms hereof.
In addition to the monthly fees and the Success Fee contemplated above,
the Company shall reimburse CTA for all reasonable out-of-pocket expenses
incurred by CTA in connection with CTA's obligations under this Agreement upon
presentation to the Company of appropriate supporting documentation relating to
such expenses. All expense reimbursement hereunder shall be made to CTA within a
commercially reasonable time period upon the presentation of such documentation
to the Company.
Globix Corporation
April 19, 2002
Page 3
4. Independent Contractor. CTA shall serve as an independent
contractor to the Company and as such shall be responsible for all tax payments,
estimated tax payments or other tax liabilities, as required for itself and each
consultant and employee. CTA hereby expressly acknowledges and agrees that (a)
it and each of its consultants and employees is an independent contractor and is
not an employee of the Company, and (b) neither this Agreement nor any action
taken pursuant to this Agreement shall constitute or be evidence of any
agreement or understanding, express or implied, that CTA or any consultant or
employee of CTA is an employee of the Company or has any rights as an employee
of the Company.
5. Confidentiality. CTA agrees not to use any Confidential
Information (defined below) or disclose any Confidential Information to anyone
other than employees, principals, consultants, attorneys and other professionals
of CTA who have acknowledged this confidentiality covenant and agree to be bound
by it. This confidentiality covenant shall be effective on the date hereof and
shall survive the termination of this Agreement. For purposes of this Consulting
Agreement, "Confidential Information": is (a) information contained in any
materials delivered to CTA pursuant to this Agreement, and (b) information which
relates to the Company's business affairs or that of any of its affiliates, but
does not include any information otherwise publicly available through no act or
failure to act on the part of CTA.
6. Termination. This Agreement may be terminated prior to the end of
the Term hereof and the rights and remedies of the parties upon such termination
shall be as set forth in this section. Either party (the "Non-defaulting Party")
may terminate this Agreement upon a material breach of this Agreement by the
other party (the "Defaulting Party") if such material breach is not cured by the
Defaulting Party within ten (10) days of its receipt of written notice regarding
such breach from the Non-defaulting Party. Other than termination as a result of
a material breach by CTA, the Company may terminate this Agreement only by
giving written notice to CTA of the Company's intention to terminate this
Agreement accompanied by payment of all billed and unpaid amounts due hereunder
from the Company to CTA for Services rendered through the date of termination,
plus all reimbursable amounts for which CTA has delivered to the Company an
invoice on or before the termination date (all unbilled amounts shall be billed
promptly, but shall not have a bearing on the termination). Not later than 30
days following the termination date, CTA shall provide the Company with an
itemized invoice for (A) the number of months remaining in the Term hereof times
$65,000 and (B) all reimbursable expenses incurred but not billed CTA prior to
the termination date. The Company will remit the amount set forth on such
invoice to CTA within 30 days following receipt of the itemized invoice. The
parties acknowledge that the Company's obligations under the second paragraph of
section 4 above shall survive any termination of this Agreement.
7. Indemnification. This Agreement will confirm that the Company
agrees to indemnify and hold harmless CTA and its affiliates, the respective
members, directors, officers and employees of CTA and its affiliates (as defined
in the Securities Exchange Act of 1934, as amended) and each person, if any,
controlling CTA or any of its affiliates (CTA and each such person and entity
being referred to as an "Indemnified Person"), to the fullest extent legally
permissible from and against any and all losses, claims, damages or liabilities
or actions related to or arising out of this engagement or the role of CTA in
connection herewith, and will pay (or,
Globix Corporation
April 19, 2002
Page 4
if paid by an Indemnified Person, reimburse such Indemnified Person) for all
fees and expenses (including, without limitation, reasonable attorneys' fees)
incurred by such Indemnified Person in connection with investigating, preparing
or defending any such action or claim, whether or not in connection with pending
or threatened litigation in which any Indemnified Person is a party. The Company
will not, however, be responsible for any claims, liabilities, losses, damages
or expenses which result from any compromise or settlement not approved by the
Company or which result primarily from the fraud, willful misconduct or gross
negligence of any Indemnified Person. The Company also agrees that no
Indemnified Person shall have any liability to the Company for or in connection
with this engagement, except for any such liability for losses, claims, damages,
liabilities or expenses incurred by the Company that results from the fraud,
willful misconduct or gross negligence of the Indemnified Person. The foregoing
agreement shall be in addition to any rights that either party may have at
common law or otherwise, including, without limitation, any right to
contribution.
If any action or proceeding is brought against any Indemnified Person
in respect of which indemnity may be sought against the Company pursuant hereto,
or if any Indemnified Person receives notice from any potential litigant or a
claimant which such person reasonable believes will result in the commencement
of any such action or proceeding, such Indemnified Person shall promptly notify
the Company in writing of the commencement of such action or proceeding, or of
the existence of such claim. In case any such action or proceeding shall be
brought against any Indemnified Person, the Company shall be entitled to
participate in such action or proceeding with counsel of the Company's choice,
or compromise or settle such action or proceeding, at its expense (in which
case, the Company shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by such Indemnified Person); provided, however,
that such counsel shall be satisfactory to the Indemnified Person in the
exercise of its reasonable judgment.
Notwithstanding the Company's election to assume the defense of such
action or proceeding, such Indemnified Person shall have the right to employ
separate counsel and to participate in the defense of such action or proceeding,
and the Company shall bear the reasonable fees, costs and expenses of such
separate counsel (and shall pay such fees, costs and expenses, at least
quarterly), if (i) the use of counsel chosen by the Company to represent such
Indemnified Person would, in the written opinion of counsel to the Indemnified
Person, present such counsel with a conflict of interest, (ii) the defendants
in, or targets of, any such action or proceeding include both Indemnified
Person(s) and the Company, and such Indemnified Person(s) shall have reasonably
concluded that there may be legal defenses available to it or to other
Indemnified Persons which are different from or additional to those available to
the Company (in which case, the Company shall not have the right to direct the
defense of such action or proceeding on behalf of the Indemnified Person), (iii)
the Company shall not have employed counsel within twenty (20) business days
after notice of the institution of such action or proceeding (or such shorter
period if necessitated by the action); or (iv) the Company shall authorize such
Indemnified Person to employ separate counsel at the Company expense; provided,
however, that all such Indemnified Persons shall be limited to, and the
Company's obligation hereunder to bear reasonable fees and expenses of separate
counsel shall be satisfied by, the employment of one counsel for such action for
all Indemnified Persons.
Globix Corporation
April 19, 2002
Page 5
In order to provide for just and equitable contribution, if a claim of
indemnification hereunder is found unenforceable in a final judgment by a court
of competent jurisdiction (not subject to further appeal), even though the
express provisions hereof provide for indemnification in such case, then the
Company and CTA shall contribute to the losses, claims, damages, judgments,
liability or costs to which the Indemnified Person may be subject in accordance
with the relative benefits received by, and the relative fault of, each in
connection with the statements, acts or omissions which resulted in such losses,
claims, damages, judgments, liabilities or costs. The parties agree that a pro
rata allocation would be unfair. No person found liable for a fraudulent
misrepresentation or omission shall be entitled to contribution from any person
who is not also found liable for such fraudulent misrepresentation or omission.
Notwithstanding the foregoing, CTA shall not be obligated to contribute to any
amount hereunder that exceeds the amount of fees previously received by CTA for
its services to the Company under this Agreement.
These indemnification provisions shall (i) remain operative and in full
force and effect regardless of (A) any termination of this Agreement other than
for fraud, willful misconduct or gross negligence, or (B) completion of the
engagement by CTA; (ii) inure to the benefit of any successors, assigns, heirs
or personal representatives of any Indemnified Person; and (iii) be in addition
to any other rights that any Indemnified Person may have.
8. Entire Agreement. This Agreement represents the entire agreement
between the parties with respect to the subject matter hereof and may not be
modified, except in writing signed by both parties. This Agreement may be
executed in counterparts, each of which shall constitute an original. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision.
9. Survival. The provisions of section 4 relating to the Company's
obligation in respect of CTA's fees and section 6 relating to indemnification
shall survive any termination of this Agreement, in accordance with their terms.
10. Binding Obligation; Choice of Law; Jurisdiction. Upon execution
by both parties, this Agreement will constitute a legally binding agreement
between the Company and CTA. The parties agree that the laws of the State of New
York shall apply regarding the interpretation and enforcement of this Agreement.
The jurisdiction and venue for all actions relating to this Agreement shall be
the state and federal courts located in New York County, New York.
11. Notices. All notices pursuant to this Agreement shall be in
writing, and hand delivered or mailed by first class mail, postage prepaid, or
sent via facsimile or overnight courier service to the attention of the person
listed below and to the party intended as the recipient thereof at the address
of such party set forth below, or at such other address or to the attention of
such other person as such party shall have designated for such purpose in a
written notice complying as to delivery with the terms of this Section.
Globix Corporation
April 19, 2002
Page 6
If to CTA: Communication Technology Advisors LLC
18 Corporate Woods Boulevard, Third Floor
Albany, New York 12211
Fax: (518) 462-3045
If to Globix: Globix Corporation
139 Centre Street
New York, New York 10013
Attention: President and Chief Executive Officer
Fax: (212) 625-7306
12. Failure by either party at any time to require performance by the
other party or to claim a breach of any provision of this Agreement will not be
construed as a waiver of any right accruing under this Agreement, nor affect any
subsequent breach, nor affect the effectiveness of this Agreement or any part
hereof, nor prejudice either party as regards any subsequent action.
If this letter does agreeably set forth the terms and conditions of the
subject matter hereof, please so indicate by signing a copy of this Agreement
and returning it to CTA.
Very truly yours,
Communication Technology Advisors LLC
By: /s/ Wayne Barr, Jr.
-----------------------------------------------------
Wayne Barr, Jr.
Senior Vice President
Agreed to and accepted this 19/th/ day of April, 2002.
Globix Corporation
By: /s/ Peter L. Herzig
-----------------------------------------------------
Name: Peter L. Herzig
Title: Chief Executive Officer
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 10/31/02 | | 2 | | | | | None on these Dates |
| Filed on: | | 7/25/02 |
| | 6/1/02 | | 2 |
| | 5/31/02 | | 2 |
| | 4/19/02 | | 1 | | 6 |
| List all Filings |
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