letterhead of Westminster Securities Corp.]
[
letterhead of Westminster Securities Corp.]
January
2007
0000
Xxxxxxxx Xxxx Xxxxx
Traverse
City, MI 49686
RE:
Engagement Letter for River Hawk.
Dear
Xx.
Xxxxxxxx,
We
are
pleased to submit to you this binding Engagement Letter (the “Agreement”) that
sets forth the arrangement whereby Westminster Securities Corp. (“Westminster”)
will act as exclusive placement agent to River Hawk Aviation, Inc., f/k/a Viva
International, Inc., and its respective affiliates or successor corporations
or
partnerships (collectively referred to as the “Company”), and provide other
non-exclusive investment banking services to facilitate the growth of the
Company.
We
propose to offer the following services, as may be appropriate:
| · |
Secure
financing for the Company of up to $6 Million in common stock or other
equity-linked securities, in one or more financings (collectively,
the
“Financing”), in amounts and upon terms acceptable to the Company.
|
| · |
Introduce
the Company to and advise about companies that are appropriate for
merger,
acquisition, or strategic partnership.
|
| · |
Assist
the Company in its listing application with the Nasdaq Global Market
/
Nasdaq Capital Market / American Stock
Exchange.
|
| · |
Introduce
the Company to appropriate U.S. legal or accounting firms as may be
necessary.
|
| · |
Render
such other financial advisory and investment banking services as may
from
time to time be necessary or appropriate to accomplish the Company’s
objectives, as may be agreed upon by Westminster and the
Company.
|
000
Xxxx
Xxxxxx, 0xx
Xxxxx,
Xxx Xxxx XX 00000 Tel: (000) 000-0000 Fax: (000) 000-0000
Our
proposed services under this Agreement are subject to the following conditions
(all consideration payable in US Dollars unless otherwise agreed):
| 1. |
Cash
Consideration:
At each closing of Financing, the Company shall pay to Westminster
a cash
commission equal to 10% of the gross proceeds of each such closing
(the
“Cash Fees”). The Company shall also reimburse Westminster for its
non-accountable expenses in connection with the Financing, calculated
as
3% of the gross proceeds of each closing, payable at each closing of
Financing.
|
|
Additionally,
at the time of the first closing of Financing, the Company shall
pay to
Westminster a cash bonus of $10,000 (the “Cash Bonus”).
|
| 2. |
Equity
Consideration:
Additionally, the Company shall issue to Westminster or its designees
90,000 shares of the Company’s common stock, which shares shall have
“piggyback” registration rights to be included in the Company’s next
registration statement under the Securities Act of 1933, as amended,
excepting a registration on Form S-4 or S-8. Prior to any registration,
the shares of the shares will be restricted subject to the Securities
Act
of 1933 unless an exemption under Rule 144, Section 4 (2) or otherwise
becomes available.
|
| 3. |
Warrant
Consideration:
At each closing of Financing, the Company shall issue to Westminster
or
its designees warrants to purchase 10% of the total common stock
issued
and issuable from the Financing (including common stock underlying
warrants and convertible securities), exercisable at the lowest
of the
purchase, conversion, or exercise price per share of any securities
issued
to investors in such Financing. Such warrants shall have registration,
antidilution, and cashless exercise rights under the same terms
as any
warrants issued to investors in such Financing, and otherwise under
customary, mutually agreeable
terms.
|
| 4. |
Merger
or Acquisition Fee:
At each closing of a merger, acquisition, or sale of the Company
(each, a
“Transaction”) in which Westminster introduced or provided assistance with
the Transaction, Westminster shall be compensated as
follows:
|
|
In
the event of a merger with or acquisition of a company with
ongoing
operations, either public or private, or an outright sale
of the Company,
the Company will pay Westminster a cash fee equal to 3% of
the total
transaction value which includes (i) cash, notes, securities
and other
property of value; (ii) liabilities (x) assumed by the purchaser
(in the
case of a sale of assets) and/or (y) existing on the Company’s balance
sheet at the time the transaction is consummated (in the
case of a merger
or sale of stock); (iii) payments to be made in installments;
(iv) amounts
paid or payable under consulting, supply, service, distribution,
licensing
or lease agreements not to compete or similar arrangements
(including such
payments to management); and, (v) contingent payments (whether
or not
related to future earnings or
operations).
|
| 5. |
Exclusivity/Westminster
Rights:
In addition to the rights and benefits defined elsewhere in this
Agreement, the Company agrees that Westminster shall have the following
defined rights:
|
|
a.
|
Upon
execution hereof, Westminster shall become the Company’s exclusive agent
for debt and equity placements for the period commencing with execution
and ending on March 31, 2007. In the event that Westminster is
able to
secure at least $3,000,000 of Financing prior to March 31, 2007,
the
Company shall extend the period of exclusivity with regards to
Westminster’s placement agent services through June 30, 2007; in the event
that Westminster is able to secure additional Financing in the
amount of
$2,000,000 prior to June 30, 2007 (for a total of $5,000,000 in
Financing), the Company shall extend the period of exclusivity
with
regards to Westminster’s placement agent services through June 30,
2008.
|
|
b.
|
Westminster
shall have the non-exclusive right to offer strategic alliances
and merger
and/or acquisition opportunities to the Company, subject to mutually
agreed upon terms and conditions.
|
|
|
c.
|
In
connection with the Financing, Westminster shall have the right
to
associate itself with other members of the National Association
of
Securities Dealers, Inc. (“NASD”) and/or agents who will share in
compensation. The selection of other agents and their compensation
shall
be at Westminster’s sole discretion.
|
|
|
d.
|
Westminster
shall have the right to receive quarterly financial statements
from the
Company. At its option, Westminster shall have visitation rights
to all
board meetings and/or the right to occupy a board seat.
|
|
|
e.
|
Until
the later of (i) two (2) years from the date of this Agreement
or (ii) one
(1) year following termination of this Agreement, Westminster shall
be
entitled to receive, and the Company shall be obligated to pay
to
Westminster, the fees set forth in Paragraphs 1, 2, 3 and 4 herein
with
respect to any such transactions entered into by the Company with
any
entity introduced directly or indirectly to the Company by Westminster
or
with whom Xxxxxxxxxxx was working on behalf of the Company at the
Company’s direction.
|
| 6. |
Indemnification:
The Company agrees to indemnify Westminster to the extent of and in
accordance with the provisions of Schedule A hereto, which is incorporated
by reference herein and made a part
hereof.
|
| 7. |
Due
Diligence:
This Agreement is subject to customary due diligence by Westminster.
The
Company shall assist with and take whatever actions necessary to
facilitate Westminster’s due diligence review of the Company and its
operations, and will reimburse Westminster for its out-of-pocket due
diligence expenses.
|
| 8. |
Expenses: The
Company will reimburse Westminster for its accountable fees, not to
exceed
$10,000 unless otherwise approved by the Company in writing, disbursements
and expenses in connection with the services proposed in this Agreement,
including, but not limited to, Westminster’s: (i) legal fees, (ii) travel,
telecommunications and entertainment expenses, (iii) printing and mailing
costs, and (iv) due diligence review expenses. Reimbursement shall
be made
within twenty (20) days of receipt of invoice by the Company or, if
earlier, at any closing of Financing. The Company shall also reimburse
Westminster upon presentation of any costs incurred by Westminster
for
collection of any fees due to Westminster under this Agreement, including
but not limited to reasonable attorneys’ fees and court costs.
|
| 9. |
Neither
party will make any public or other disclosures concerning any proposed
Financing or Transaction pursuant to this Agreement, except with respect
to the solicitation of any Financing or Transaction, subject to any
agreement between the parties, applicable law, and each party’s legal
obligations. Subsequent to the closing of any Financing or Transaction,
and subject to each party’s legal obligations, each party may make factual
references to the Financing or Transaction, provided any press releases
or
other descriptive disclosures referencing the other party shall require
the other party’s prior written consent.
|
| 10. |
Westminster
shall not be obligated to provide advice or perform services to the
Company that are not specifically addressed in this Agreement. In
connection with Westminster providing the services described above,
the
Company shall provide Westminster with any information that Westminster
reasonably requires. The Company hereby acknowledges that Westminster
will
be using and relying on said information without independent verification
and that Westminster assumes no responsibility for the accuracy and
completeness of any information provided to it by the Company.
|
| 11. |
The
Company hereby acknowledges that Westminster is not a fiduciary of
the
Company and that Westminster makes no representations or warranties
regarding the Company’s ability to secure financing, whether now or in the
future. The obligations of Westminster described in this Agreement
consist
solely of best efforts services to the Company, and in no event shall
Westminster be required to act as the agent of the Company or to provide
legal or accounting services. All final decisions with respect to acts
of
the Company or its affiliates, whether or not made pursuant to or in
reliance upon information or advice furnished by Westminster hereunder,
shall be those of the Company or such affiliates, and Westminster shall
under no circumstances be liable for any expense incurred or loss suffered
by the Company as a consequence of such
decisions.
|
| 12. |
This
Agreement will be governed by and construed in accordance with the
laws of
the State of New York, without giving effect to its conflict of laws
principles or rules. If a dispute or claim shall arise with respect
to any
of the terms or provisions of this Agreement, or with respect to the
performance by any of the parties under this Agreement, then the parties
agree to submit the dispute to binding and non-appealable arbitration
in a
venue located in New York, NY in accordance with the rules of the American
Arbitration Association (“AAA”). The prevailing party shall be reimbursed
by the nonprevailing party for all reasonable attorney's fees and costs
(including all arbitration costs) incurred by the prevailing party
in
resolving such dispute. Any award rendered in arbitration may be enforced
in any court of competent jurisdiction.
|
| 13. |
This
Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and authorized assigns. Any attempt
by
either party to assign any rights, duties or obligations which may
arise
under this Agreement without the prior written consent of the other
party
shall be void.
|
| 14. |
This
document contains the entire agreement between the parties with respect
to
the subject matter hereof, and neither party is relying on any agreement,
representation, warranty, or other understanding not expressly stated
herein. In the event that any provision of this Agreement shall be
held to
be invalid, illegal or unenforceable in any circumstances, the remaining
provisions shall nevertheless remain in full force and effect and shall
be
construed as if the unenforceable portion or portions were
deleted.
|
| 15. |
The
parties acknowledge that certain provisions of this Agreement must
survive
any termination or expiration thereof in order to be fair and equitable
to
the party to whom any promise or duty to perform is owed under such
provision prior to such termination or expiration of the Agreement.
Therefore, the parties agree that each of the numbered provisions herein
shall survive the termination or expiration of this Agreement for the
period required to meet and satisfy any obligations and promises arising
therein and thereunder.
|
| 16. |
This
Agreement may be executed in counterparts, each of which shall be deemed
an original and all of which together will constitute one and the same
instrument.
|
[SIGNATURE
PAGE TO ENGAGEMENT LETTER]
If
the
foregoing correctly sets forth the understanding between us, please sign below
where indicated.
Very
truly yours,
WESTMINSTER
SECURITIES CORP.
By:
/s/
Xxxx X. X’Xxxx
Name:
Xxxx
X.
X’Xxxx
Title: Chairman
& CEO
River
Hawk Aviation, Inc.
By:
/s/
Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Chief Executive Officer, Chairman
ACCEPTED
AND AGREED TO AS OF THE ____ DAY OF __________, 2007.
SCHEDULE
A TO ENGAGEMENT LETTER
INDEMNIFICATION
The
Company agrees to indemnify Westminster, its employees, directors, officers,
agents, affiliates, and each person, if any, who controls it within the meaning
of either Section 20 of the Securities Exchange Act of 1934 or Section 15 of
the
Securities Act of 1933 (each such person, including Westminster, is referred
to
as an "Indemnified Party") from and against any losses, claims, damages and
liabilities, joint or several (including, all legal to other expenses reasonably
incurred by an Indemnified Party in connection with the preparation for or
defense of any threatened or pending claim, action or proceeding, whether or
not
resulting in any liability) ("Damages"), to which such Indemnified Party in
connection with its services or arising out of its engagement hereunder, may
become subject under any applicable Federal or state law or otherwise, including
but not limited to, liability (i) caused by or arising out of an untrue
statement or an alleged untrue statement of a material fact or the omission
or
the alleged omission to state a material fact necessary in order to make the
statement not misleading in light of the circumstances under which it was made,
(ii) caused by or arising out of any act, or (iii) arising out of Westminster's
engagement or the rendering by any Indemnified Party of its services under
this
Agreement; provided, however, that Company will not be liable to the Indemnified
Party hereunder to the extent that any damages are found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence, bad faith or willful misconduct of the Indemnified
Party seeking indemnification hereunder.
These
indemnification provisions shall be in addition to any other liability, which
Company may otherwise have to any Indemnified Party.
If
for
any reason other than a final non-appealable judgment finding any Indemnified
Party liable for Damages for its gross negligence, bad faith or willful
misconduct the foregoing indemnity is unavailable to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then Company shall
contribute to the amount paid or payable by an Indemnified Party as a result
of
such Damages in such proportion as is appropriate to reflect not only the
relative benefits received by Company and its shareholders on the one hand
and
Westminster on the other, but also the relative fault of Company and the
Indemnified Party as well as any relevant equitable considerations, subject
to
the limitation that in no event shall the total contribution of all Indemnified
Parties to all such Damages exceed the amount of fees actually received by
Westminster hereunder.
Promptly
after receipt by the Indemnified Party of notice of any claim or of the
commencement of any action in respect of which indemnity may be sought, the
Indemnified Party will promptly notify Company in writing of the receipt or
commencement thereof; however Company shall not have the right to assume the
defense of such claim or action (including the employment of counsel). The
Indemnified Party shall have the right to retain counsel reasonably satisfactory
to Company, at Company's expense, to represent the Indemnified Party in any
claim or action in respect of which indemnity may be sought and agrees to
cooperate with Company and Company's counsel in the defense of such claim or
action. The omission by an Indemnified Party to promptly notify Company of
the
receipt or commencement of any claim or action in respect of which indemnity
may
be sought will relieve Company from any liability Company may have to such
Indemnified Party only to the extent that such a delay in notification
materially prejudices Company's ability to defend such claim or action. Company
shall not be liable for any settlement of any such claim or action effected
without its written consent, which shall not be unreasonably withheld or
delayed.
Initials
_________ Initials __________
