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EXHIBIT 10.06
[▇▇▇▇▇▇▇▇▇ ▇▇▇▇ INC. LETTERHEAD]
AGREEMENT TO ENGAGE ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, INC. ("MSI") AS
BUSINESS CONSULTANTS FOR
▇▇▇▇▇▇▇ HILLS LTD., INC. ("BHL")
On the basis of previous telephone conversations and meetings between ▇▇▇▇▇▇▇
Hills Limited, Inc. ("BHL") and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Inc. ("MSI") as well as other
discussions. Initial reports submitted by BHL, and the representations that BHL
has made to MSI describing BHL, its subsidiaries or affiliated companies
(collectively, "Affiliates") and their principals, present and proposed business
activities, operations, financial condition and capital structure, and various
agreements and documents related thereto, MSI hereby submits to BHL a proposal
for the terms pursuant to which MSI would be willing to consult to BHL and its
Affiliates in their effort to seek additional business and business
relationships that will be of benefit to them.
I. ENGAGEMENT
BHL hereby engages and retains MSI as a Business Consultant for and on
behalf of BHL and its Affiliates to perform the Services (as that term
is hereinafter defined) and MSI hereby accepts such appointment on the
terms and subject to the conditions hereinafter set forth and agrees to
use its best efforts in providing such Services.
II. INDEPENDENT CONTRACTOR
A. MSI shall be, and in all respects be deemed to be, an
independent contractor in the performance of its duties
hereunder, any law of any jurisdiction to the contrary
notwithstanding.
B. MSI shall not, by reason of this Agreement or the performance
of the Services, be or be deemed to be, an employee, agent,
partner, co-venturer or controlling person of BHL, and MSI
shall have no power to enter into any agreement on behalf of
or otherwise bind BHL.
C. MSI shall not have or be deemed to have, fiduciary obligations
or duties to BHL or its Affiliates and shall be free to
pursue, conduct and carry on for its own account (or for the
account of others) such activities, employments, ventures,
businesses and other pursuits as MSI in its sole, absolute and
unfettered discretion, may elect.
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III. SERVICES
▇. ▇▇ ▇▇▇'s Business Consultant, MSI agrees to provide the
following consulting services (collectively the "Services"):
1. Assisting BHL in efforts to seek additional business
and business relationships that will be of benefit to
BHL and its Affiliates.
2. Evaluating, structuring and advising BHL and its
Affiliates in connection with potential spin-off and
reverse merger transactions, separate initial public
offerings, and other activities related to maximizing
shareholder value.
3. Advising BHL and its Affiliates in their negotiations
with one or more individuals, firms or entities (the
"Candidate(s)") who may have an interest in providing
investment capital in the form of bridge financing,
private placement, debt and/or equity financing,
media financing, or in pursuing a form of Business
Combination with BHL and/or its Affiliates. As used
in this letter, the term "Business Combination" shall
be deemed to mean any form of merger, acquisition,
joint venture, licensing agreement, product sales
and/or marketing, distribution, combination and/or
consolidation, etc. involving BHL and/or any of its
Affiliates and any other entity.
4. Conducting corporate-related due diligence concerning
BHL and its Affiliates in connection with the
anticipated Services to be rendered under this
Agreement.
5. Assisting BHL and its Affiliates in locating and
engaging certain professionals, including a permanent
Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer and additional members of
their respective Board of Directors, as well as
negotiating employment-related contracts.
6. Advising BHL regarding company operations, staffing,
strategy, and other issues related to building
shareholder value.
7. Consulting BHL in connection with establishing and
continuing its securities-related reporting system.
8. Advising BHL's management in corporate finance
matters, including structuring the nature, extent and
other parameters of any private or other offer(s) to
be made to Candidate(s).
9. Consulting BHL and its Affiliates in efforts to
establish strategic relationships with individuals
and entities of particular interest to them in
connection with their continued business development.
B. BEST EFFORTS. MSI shall devote such time and best effort to
the affairs of BHL as is reasonable and adequate to render the
Services contemplated by this Agreement. MSI is not
responsible for the performance of any services which may be
rendered hereunder without BHL providing the necessary
information in writing prior thereto, nor shall MSI include
any services that constitute the rendering of any legal
opinions or performance of work that is in the ordinary
purview of the Certified Public Accountant. MSI cannot
guarantee results on behalf of BHL, but shall pursue all
reasonable avenues available through its network of contacts.
At such time as an interest is expressed by a third party in
BHL's needs, MSI shall notify BHL and advise it as to the
source of such interest and any terms and conditions of such
interest. The acceptance and consumption of any transaction is
subject to acceptance of the terms and conditions by BHL. It
is understood
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that a portion of the compensation paid hereunder is being paid by BHL to
have MSI remain available to advise it on transactions on an as-needed
basis.
▇. ▇▇▇ and MSI hereby confirm their express written intent that MSI shall only
be required to devote such time to the performance of the Services as MSI
shall, in its discretion, deem necessary and proper to discharge its
responsibilities under this Agreement.
D. In conjunction with the Services, MSI agrees to:
1. Conduct an on-site initial evaluation of BHL and its businesses and
meet with BHL's representatives at its Florida office headquarters in
a mutually agreed upon date shortly after the execution of this
agreement.
2. Make itself available to the officers of BHL at such mutually agreed
upon places during normal business hours for reasonable periods of
time, subject to reasonable advance notice and mutually convenient
scheduling, for the purpose of advising BHL and its Affiliates in the
preparation of such reports, summaries, corporate and/or transaction
profiles, due diligence packages and/or other material and
documentation ("Documentation") as shall be necessary. In the opinion
of MSI, to properly present them to other entities and individuals
that could be of benefit to BHL and its Affiliates.
3. Make itself available for telephone conferences with the principal,
financial, sales and/or operating officer(s) of BHL during normal
business hours.
IV. EXPENSES
It is expressly agreed and understood that MSI's compensation as provided
in this Agreement does not include normal and reasonable out-of-pocket
expenses. The expenses described in this paragraph shall be reimbursed by
BHL independent of any fees described in the section below titled,
"COMPENSATION."
A. "Normal and reasonable out-of-pocket expenses" shall include but are
not limited to: accounting, long distance communication, express mail,
outside consultants, travel (including: airfare, hotel lodging and
meals, transportation, etc.), and other costs involved in the
execution of MSI's Services under this Agreement.
B. It is also agreed that BHL will pay all out-of-pocket expenses
incurred in connection with the preparation and printing of any
Offering Memorandums, and any amendments thereto, (excluding MSI's
personnel costs).
▇. ▇▇▇, also agrees to pay its own and MSI's legal expenses in connection
with:
1. MSI's services under this Agreement, and
2. Any registration of the Engagement Stock as provided in Section
V below.
D. MSI shall not incur any expense in excess of one thousand dollars
($1,000) without BHL's prior written consent, which consent shall not
unreasonably be withheld.
▇. ▇▇▇ hereby agrees to compensate MSI promptly upon receipt of an
expense invoice from MSI. Whenever feasible, MSI will request advance
payment of approved expenses. The reimbursement for expenses shall not
be subject to any maximum allocation, and shall be fully reimbursed.
V. COMPENSATION
In consideration for the Services, ▇▇▇ agrees that MSI and/or its assigns
shall be entitled to compensation as follows:
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A. MSI or its assigns will be issued One Million One
Hundred Thousand (1,100,000) Warrants to purchase an
aggregate of One Million One Hundred Thousand
(1,100,000) shares of BHL's Common Stock at a per share
purchase price of ten cents ($0.10) (these Warrants
shall be referred to collectively as the "Engagement
Warrants")
1. Although all of the foregoing Engagement Warrants
are considered immediately vested upon execution
of this Agreement, only Six Hundred Thousand
(600,000) Warrants will be issued to MSI at that
time. The remaining Five Hundred Thousand
(500,000) Warrants will be held in escrow by MSI's
counsel, ▇▇▇▇ & ▇▇▇▇▇, LLP, and will be released
to MSI or its assigns at the end of each
successive quarter (i.e., every 90 days) in equal
installments of One Hundred Twenty-Five Thousand
(125,000) Warrants.
2. The Engagement Warrants shall expire five (5)
years after their issuance to the extent they have
not been exercised by such time.
3. The shares of Common Stock underlying the
Engagement Warrants, when issued, shall be
deemed fully earned and shall have all the same
rights and all the same dilutive or anti-dilutive
provisions as the "Founder's Stock" held by the
original shareholders.
4. MSI understands that BHL currently has 12,000,000
shares of Common Stock outstanding as of the date
of this Agreement, but anticipates issuing
additional equities (e.g., common or preferred
shares, options or warrants (collectively
"Equities")) in connection with various
contemplated transactions. Accordingly, the amount
of Engagement Warrants to be issued to MSI shall be
adjusted, on a pro rata basis, to reflect the
issuance of additional Equities over and above the
existing 12,000,000 shares of common stock (e.g.,
if BHL issues an additional 12,000,000 shares of
stock or warrants, MSI would be entitled to an
additional 1,100,000 Warrants) upon the same terms
and conditions as the original Engagement Warrants.
These additional Warrants shall for all purposes be
considered Engagement Warrants and will be issued
to MSI within ten (10) days following the issuance
of any additional Equities as set forth above.
5. MSI shall have "Piggyback Registration Rights" to
register the shares of Common Stock underlying the
Engagement Warrants as part of any registration
filing by BHL and "Demand Registration Rights"
commencing twelve (12) months from the date of the
signing of this Agreement which shall entitle MSI
to demand the immediate registration of the shares
of Common Stock underlying Engagement Warrants at
the sole discretion of MSI.
6. BHL's Board of Directors shall authorize that the
Engagement Warrants shall be issued upon the
signing of this Agreement, and shall be delivered
immediately to MSI's counsel, ▇▇▇▇ & ▇▇▇▇▇, LLP.
However, in no event shall the Engagement Warrants
be delivered later than seven (7) days from the
date of the signing of this Agreement.
7. Net Issue Election. MSI may elect to receive,
without payment by MSI of any additional
consideration, that number of shares of Common
Stock equal to the value of MSI's Engagement
Warrants, or any portion thereof, by the surrender
of the applicable Warrant Certificate to BHL at its
principal executive office. Thereupon, BHL shall
issue to MSI such number of fully paid and
nonassessable shares of Common Stock as is
comprised using the following formula:
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X=Y(A-B)
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A
Where
X = the number of shares of Common Stock to be issued to MSI pursuant
to this section 7;
Y = the number of shares of Common Stock covered by the subject
Warrant in respect of which the net issue election is made;
A = the "fair market value" of one share of Common Stock at the time
the net issue election is made; and
B = the purchase price in effect under the Warrant at the time the
net issue election is made.
The term "fair market value" of one share of Common Stock on any date shall
mean a publicly traded price of the Warrant holder's choosing, of the
Common Stock during the five (5) trading days prior to exercising the
subject Warrant.
▇. ▇▇▇ acknowledges that it may be necessary to hire certain professional
individuals on a temporary or contract basis to execute some of MSI's
recommendations/advice and BHL agrees that it may be necessary to pay those
individuals separately from this Agreement at agreed upon rates. The
current market value of those services may range from $1,500 to $2,500 per
day depending on the expertise needed. BHL must pre-approve the engagement
of any such professionals in writing. Provided BHL has given its
pre-approval, such fees are payable immediately upon the initial receipt of
an invoice by BHL. In no event shall payment be made later than seven (7)
days of initial receipt of invoice by BHL.
C. For market positioning, strategic planning and other business consulting
work to be accomplished, BHL shall pay to MSI a monthly fee of Five
Thousand Dollars ($5,000) (the "Monthly Advisory Fees"). The Monthly
Advisory Fees are exclusive of the other compensation and reimbursable
pre-approved expenses elsewhere provided in this Agreement.
1. The Monthly Advisory Fees are payable in advance, on the first (1st)
day of each calendar month and shall commence upon the signing of this
Agreement.
2. Said Monthly Advisory Fees shall continue for twenty-four (24) months,
or shall end upon proper termination of this Agreement according to
the section below titled, "TERM AND TERMINATION".
D. If, at any time during the term of this Agreement and for a period of
twenty-four (24) months following the termination of this Agreement, BHL
and/or any of its Affiliates merges with, acquires assets or any other
property, obtains any other financing from or engages in any other type of
business combination (collectively, a "Business Combination"), with any of
the entities, affiliations or persons MSI, its employees or former
employees, agents, representatives, advisors, or consultants introduces to
BHL and/or its Affiliates, BHL will pay a finder's fee in cash or equity,
to be paid in kind, equal to:
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1. Five percent (5%) of the amount up to and including
three million dollars ($3,000,000);
2. Four percent (4%) of the amount above three million
dollars ($3,000,000) but less than five million
dollars ($5,000,000); and
3. Three percent (3%) of the amount above five million
dollars ($5,000,000) of the total gross proceeds or
value of such transaction. If required by applicable
law, or at the election of MSI, the finder's fee will
be deemed to have been earned by and be paid in a
timely manner to a placement agent selected
exclusively by MSI.
VI. REPRESENTATIONS, WARRANTIES AND COVENANTS
A. EXECUTION. The execution, delivery and performance of this
Agreement, in the time and manner herein specified, will not
conflict with, result in a breach of, or constitute a default
under any existing agreement, indenture, or other instrument
to which either BHL or MSI is a party or by which either
entity may be bound or affected.
B. NON-CIRCUMVENTION. BHL hereby irrevocably agrees not to
circumvent, avoid, bypass, or obviate, directly or indirectly,
the intent of this Agreement, including avoiding payment of
fees or other compensation to MSI or its affiliates in
connection with any transaction involving any corporation,
partnership, individual, or other entity introduced by MSI to
BHL and/or its Affiliates.
C. TIMELY APPRISALS. BHL shall keep MSI up to date and apprised
of all business market and legal developments related to BHL
and its operations and management.
1. Accordingly, BHL shall provide MSI with copies of all
amendments, revisions and changes to its business and
marketing plans, bylaws, articles of incorporation,
private placement memoranda, key contracts,
employment and consulting agreements and other
operational agreements.
2. BHL shall promptly notify MSI of the threat or filing
of any suit, arbitration or administrative action,
injunction, lien, claim or complaint and promptly
forward a copy of all related documentation directly
to MSI or at MSI's option to MSI's counsel.
3. BHL shall promptly notify MSI of all new contracts,
agreements, joint ventures or filing with any state,
federal or local administrative agency, including
without limitation the SEC, NASD or any state agency,
and shall provide all related documents, including
copies of the exact documents filed, to MSI,
including, without limitation, all annual reports,
quarterly reports and notices of change of events,
and registration statements filed with the SEC and
any state agency, directly to MSI.
4. BHL shall also provide directly to MSI current
financial statements, including balance sheets,
income statements, cash flows and all other documents
provided or generated by BHL, in the normal course of
its business and requested by MSI from time to time.
5. MSI shall keep all documents and information
confidential as described in the section below
titled, "CONFIDENTIAL DATA".
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D. CORPORATE AUTHORITY. Both BHL and MSI have full legal authority to enter into
this Agreement and to perform the same in the time and manner contemplated.
E. AUTHORIZED SIGNATURES. The individuals whose signatures appear below are
authorized to sign this Agreement on behalf of their respective corporations.
F. COOPERATION. BHL will cooperate with MSI, and will promptly provide MSI with
all pertinent materials and requested information in order for MSI to perform
its Services pursuant to this Agreement.
G. PROPERLY ISSUED SHARES. When issued to MSI, the Engagement Stock shall be
duly and validly issued, fully paid and non-assessable.
H. UNDERWRITER FEES. BHL acknowledges and understands that MSI is neither a
broker/dealer nor a Registered Investment Advisor and BHL may be required to
pay additional underwriting fees in connection with any offerings,
underwritings or financings to the appropriate underwriter and/or funding
entity in addition to any fees paid to MSI.
I. ESCROW AGENT & AGREEMENT. In connection with any private placement, BHL
hereby agrees to enter into an escrow agreement with an escrow agent suitable
to both MSI as well as BHL (the "Escrow Agent"), and agrees to abide by the
terms of an escrow agreement set forth by the Escrow Agent and MSI on such
terms as may be acceptable to BHL and MSI.
J. ADDITIONAL AGREEMENTS AND DOCUMENTS. ▇▇▇ also agrees to enter into such
additional agreements, sign such additional documents, and provide such
additional certifications and documentation as may requested by MSI, the
Escrow Agent, the Placement Agent, or such other parties related to the
obtaining of capital for BHL on such terms as may be acceptable to BHL and
MSI.
K. PROMPT NOTIFICATION OF MATERIAL OCCURRENCES. Until the proper termination of
this engagement (as outlined in the section above titled, "Term &
Termination"), BHL will notify MSI promptly of the occurrence of any event,
which might materially affect the condition (financial or otherwise) or
prospects of BHL.
L. PUBLIC/INVESTOR RELATIONS FIRM. MSI and BHL shall mutually agree upon a
Public/Investor Relations Firm on such terms as may be acceptable to BHL and
MSI, which shall perform:
1. An analysis of BHL's business and industry, following with a comprehensive
background report that summarizes BHL's corporate and financial profile
that shall be distributed to investment professionals and the press.
2. Develop a complete financial public relations program designed to enable
BHL to establish all of its business objectives and broaden recognition of
BHL in the financial community in the U.S. and abroad.
3. Establish a comprehensive mailing list for BHL, and maintain and update
the list as necessary.
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M. SHAREHOLDER LISTS AND INFORMATION. ▇▇▇ also agrees to provide on a
monthly basis, a summary of current shareholders of BHL's stock, and
at such time, as BHL's stock is listed and/or trading on a
recognized stock exchange. BHL shall deliver monthly Depository
Trust Corporation (DTC) shareholder summary sheets, or other such
information as requested by MSI to be delivered to MSI within seven
(7) days.
VII. TERM AND TERMINATION
A. This Agreement shall be effective upon its execution and shall
remain in effect for a period of two (2) years unless otherwise
terminated as provided in this Section VII.
▇. ▇▇▇ shall have the right to terminate MSI's engagement hereunder
by furnishing MSI with thirty (30) days advance written notice of
such termination. Upon receipt of such written notice, this
Agreement will then terminate on the last day of the second full
calendar month following the receipt of notice. Notice of
termination must be received before the end of the last day of the
calendar month in order to terminate the Agreement on the last day
of the second full calendar month following the receipt of notice.
C. Notwithstanding the foregoing, nor termination of this Agreement by
BHL shall in any way affect MSI's right to receive:
1. reimbursement for billed, accrued and/or unbilled
disbursements and expenses which right the parties hereby
agree and consent is absolute;
2. its fees, securities and/or warrants, including the
Engagement Warrants and underlying Common Stock, which have
been earned by MSI through the effective date of termination.
3. the full amount of the fees, securities and/or warrants upon
the closing of a Business Combination between BHL, its
Affiliates and any Candidate as contemplated in Section V.D.
above.
4. MSI's Monthly Advisory Fees through the effective date of
termination.
VIII. CONFIDENTIAL DATA
A. Except for its employees, agents and independent contractors, MSI
shall not divulge to others, any trade secret or confidential
information, knowledge, or data concerning or pertaining to the
business and affairs of BHL, obtained by MSI as a result of its
engagement hereunder, unless authorized, in writing by BHL.
B. Except for its employees, agents and independent contractors, BHL
shall not divulge to others, any trade secret or confidential
information, knowledge, or data concerning or pertaining to the
business and affairs of MSI, obtained by BHL as a result of its
engagement hereunder, unless authorized, in writing, by MSI.
C. MSI shall not be required in the performance of its duties to
divulge to BHL or any officer, director, agent or employee of BHL,
any secret or confidential information, knowledge, or data
concerning any other person, firm or entity (including, but not
limited to, any such persons, firm or entity which may be a
competitor or potential competitor of BHL) which MSI may have or be
able to obtain otherwise than as a result of the relationship
established by this Agreement.
IX. COOPERATION WITH REGISTRATION OF SECURITIES
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Upon MSI's request, BHL will cooperate with, approve, cause its counsel to
execute and deliver opinions and execute as necessary, and in a timely
manner, any Registration Statements and documents customarily utilized in
connection therewith (including any and all amendments thereto including
post-effective amendments), standby or other underwriting or selling
agreements, instructions to its transfer agent, sales or transfer
documentation reasonably requested by MSI that shall be necessary or
required to implement MSI's or its assignees or investor's sale, transfer,
pledge or hypothecation of their shares under the '33 Act, the securities
or "blue sky" laws of the various states or the rules of any other
governmental or governing body having jurisdiction thereover.
X. OTHER MATERIAL TERMS AND CONDITIONS:
A. BOARD MEMBERS. BHL and its Chairman hereby agree that MSI shall be
entitled to appoint one (1) member of the BHL's Board of Directors and
BHL and its Chairman will exercise their best efforts to sponsor such
an appointment, which shall include casting all necessary votes in
their control for such appointment. Any such nomination and
appointment shall be independent of, and not in any way be affected by
MSI's advisory role as otherwise provided herein.
B. INDEMNITY. Because MSI will be acting on BHL's behalf, it is MSI's
practice to receive indemnification. A copy of MSI's standard
indemnification provisions (the "Indemnification Provisions") is
attached to this Agreement as Exhibit A and is incorporated herein and
made a part hereof. BHL hereby indemnifies MSI according with the
provisions attached as Exhibit A.
C. CONSEQUENTIAL DAMAGES. Except as expressly provided herein, MSI and
its affiliates shall not, by reason of the termination of this
Agreement or otherwise, be liable to BHL or its Affiliates for any
special, incidental, consequential or punitive damages such as, but
not limited to, expenditures, investments or commitments made in
connection with the efforts by BHL to acquire another entity or sell
all or a portion of its equity to another entity.
D. PROVISIONS. Neither termination nor completion of this Agreement shall
affect the provisions of this Agreement, and the Indemnification
Provisions that are incorporated herein, both of which shall remain
operative and in full force and effect.
E. ADDITIONAL INSTRUMENTS. Each of the parties shall from time to time,
at the request of others, execute, acknowledge and deliver to the
other party any and all further instruments that may be reasonably
required to give full effect and force to the provisions of this
Agreement.
F. ENTIRE AGREEMENT. Each of the parties hereby covenants that this
Agreement is intended to and does contain and embody herein all of the
understandings and Agreements, both written or oral, of the parties
hereby with respect to the subject matter of this Agreement, and that
there exists no oral agreement or understanding expressed or implied
liability, whereby the absolute, final and unconditional character and
nature of this Agreement shall be in any way invalidated, empowered or
affected. There are no representations, warranties or covenants other
than those set forth herein.
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G. LAWS OF THE STATE OF CALIFORNIA. This Agreement shall be
deemed to be made in, governed by and interpreted under
and construed in all respects in accordance with the
laws of the State of California, irrespective of the
country or place of domicile or residence of either
party. In the event of controversy arising out of the
interpretation, construction, performance or breach of
this Agreement, the parties hereby agree and consent to
the jurisdiction and venue of the District or County
Court of San Francisco County, California; or the United
States District Court for the District of California,
and further agree and consent that personal service or
process in any such action or proceeding outside of the
State of California and San Francisco County shall be
tantamount to service in person within San Francisco
County, California and shall confer personal
jurisdiction and venue upon either of said Courts.
H. ASSIGNMENTS. The benefits of the Agreement shall inure
to the respective successors and assigns of the parties
hereto and of the indemnified practice 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; provided that
the rights and obligations of BHL, under this Agreement
may not be assigned or delegated without the prior
written consent of MSI, and any such purported
assignment shall be null and void. Notwithstanding the
foregoing, MSI may assign or delegate its obligations
and rights under this Agreement upon five (5) days
written notice, to another investment banking/business
consulting firm of its choice in its sole discretion
with consent of BHL, in BHL's sole discretion.
I. ORIGINALS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be
deemed an original and constitute one and the same
Agreement. Facsimile copies with signatures shall be
given the same legal effect as an original.
▇. ADDRESSES OF PARTIES. Each party shall at all times
keep the other informed of its principal place of
business if different from that stated herein, and
shall promptly notify the other of any change, giving
the address of the now place of business or residence.
K. NOTICES. All notices that are required to be or may be
sent pursuant to the provision of this Agreement shall
be sent by certified mail, return receipt requested, or
by overnight package delivery service to each of the
parties at the address appearing herein, and shall
count from the date of mailing or the validated air
bill.
L. MODIFICATION AND WAIVER. A modification or waiver of
any of the provisions of this Agreement shall be
effective only if made in writing and executed with the
same formality as this Agreement. The failure of any
party to insist upon strict performance of any of the
provisions of this Agreement shall not be construed as
a waiver of any subsequent default of the same or
similar nature or of any other nature.
M. INJUNCTIVE RELIEF. Solely by virtue of their respective
execution of this Agreement and in consideration for
the mutual covenants of each other, BHL and MSI hereby
agree, consent and acknowledge that, in the event of
the failure by BHL to pay the
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consideration to MSI or in the event of a breach of any other material
term, MSI will be without adequate remedy-at-law and shall therefore,
be entitled to immediately redress of any material breach of this
Agreement by temporary or permanent injunctive or mandatory relief
obtained in an action or proceeding instituted in the District or
County Court of San Francisco County, State of California or the
United States District Court for the District of California without
the necessity of proving damages and without prejudice to any other
remedies which MSI may have at law or in equity. For the purposes of
this Agreement, BHL, hereby agrees and consents that upon a material
breach of this Agreement as aforesaid, in addition to any other legal
and/or equitable remedies MSI may present a conformed copy of this
Agreement to the aforesaid courts and shall thereby be able to obtain
a permanent injunction enforcing this Agreement or barring enjoining
or otherwise prohibiting BHL from circumventing the express written
intent of the parties as enumerated in this Agreement.
N. ATTORNEY'S FEES. If any arbitration, litigation, action, suit, or
other proceeding is instituted to remedy, prevent or obtain relief
from a breach of this Agreement, in relation to a breach of this
Agreement or pertaining to a declaration of rights under this
Agreement, the prevailing party will recover all such party's
attorneys' fees incurred in each and every such action, suit or other
proceeding, including any and all appeals or petitions therefrom. As
used in this Agreement, attorneys' fees will be deemed to be the full
and actual cost of any legal services actually performed in
connection with the matters involved, including those related to any
appeal or the enforcement of any judgment calculated on the basis of
the usual fee charged by attorneys performing such services.
APPROVED AND AGREED:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, INC. ▇▇▇▇▇▇▇ HILLS LTD., INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- -----------------------------
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its President Its Chairman
5/27/99
----------------------------- -----------------------------
Date of execution Date of execution
Attachments: Exhibit "A" Indemnification Agreement
Initials /s/ MH
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EXHIBIT A
INDEMNIFICATION PROVISIONS
▇▇▇▇▇▇▇ Hills Ltd., Inc. (the "Company" or "BHL") agrees to indemnify and hold
harmless ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Inc. ("MSI"), its officers, employees and authorized
agents against any and all losses, claims, damages, obligations, penalties,
judgements, awards, liabilities, costs, expenses and disbursements (incurred in
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 of 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 any action in
which MSI is a party), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with MSI's acting for BHL (other than
those caused by, relating to, based upon, arising out of, or in connection with
MSI's gross negligence or willful misconduct), under the Agreement dated May
______, 1999, between BHL and MSI to which these indemnification provisions are
attached and form a part (the "Agreement"). Such indemnification does not apply
to acts performed by MSI, which are in criminal in nature or a violation of law.
BHL also agrees that MSI shall not have any liability (whether direct or
indirect, in contract or tort, or otherwise) to BHL, for, or in connection with
the engagement of MSI under the Agreement, except to the extent that any such
liability resulted primarily and directly from MSI's gross negligence or willful
misconduct.
These indemnification provisions shall be in addition to any liability which BHL
may otherwise have to MSI or the persons indemnified below in this sentence and
shall extend to the following: MSI, 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 (collectively, the "MSI
Parties"). All references to MSI in these indemnification provisions shall be
understood to include any and all of the foregoing.
If any action, suit, proceeding or investigation is connected, as to which any
of the MSI Parties propose indemnification under the Agreement, they shall
notify BHL with reasonable promptness; provided however, that any failure by the
party seeking indemnification to notify BHL shall not relieve BHL from its
obligations hereunder. The MSI Parties shall have the right to retain counsel of
their own choice (which shall be reasonably acceptable to BHL) to represent
them, and BHL shall pay fees, expenses and disbursements of such counsel; and
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with BHL and any counsel designated by BHL. BHL
shall be liable for any settlement of any claim against the MSI Parties made
with BHL's written consent, which consent shall not be unreasonably withheld.
BHL shall not, without the prior written consent of the party seeking
indemnification, which shall not be unreasonably withheld, settle or compromise
any claim, or permit a default or consent to the entry of any judgement in
respect thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the party seeking
indemnification 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 judgement 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 BHL, on the one hand, and MSI, 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 BHL, on the one
hand, and MSI, on the other hand, and also the relative fault of BHL, on the one
hand, and MSI, in the other hand, in connection with the statements, acts or
omissions which resulted in such losses, claims, damages, obligations,
penalties, judgements, 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.
Neither termination nor completion of the engagement of MSI referred to above
shall affect these indemnification provisions which shall then remain operative
and in full force and effect.
Initials: /s/ MH
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