EXHIBIT 99.7
WARRANT EXERCISE AND
INDEMNIFICATION AGREEMENT
This Agreement is made and entered into as of the 24th day of November,
1997 by and between Xxxxxxx Xxxxxx ("Xxxxxx"), and The Great American Backrub
Store, Inc., a New York corporation (the "Company").
WHEREAS, the Company and Zanker entered into a consulting agreement on
October 16, 1997 (the "Consulting Agreement"); and
WHEREAS, pursuant to the Consulting Agreement the Company issued five
year warrants to Zanker to purchase an aggregate of 300,000 shares for $225,000
(the "Warrants"); and
WHEREAS, the Company is obligated to pay Zanker $190,000 pursuant to
the Consulting Agreement; and
WHEREAS, Zanker wishes to exercise and the Company wishes to permit
Zanker to exercise the Warrants by waiving all right to cash compensation under
the Consulting Agreement.
NOW THEREFORE, for good and valuable consideration receipt of which is
hereby acknowledged, the parties do hereby agree as follows:
1. Zanker, concurrently with the effective date of the registration
statement relating to the shares of common stock issuable upon the exercise of
the Warrants, waives all rights to cash compensation under the Consulting
Agreement in exchange for the exercise of the Warrants into 300,000 shares of
the Company's common stock and hereby exercises the Warrants.
2. The Company hereby accepts Zanker's waiver of $190,000 of cash
compensation due under the Consulting Agreement as the full exercise price of
the Warrants.
3. Zanker hereby agrees to indemnify and hold the Company harmless for
any and all liability arising from or related to a judgment in an action
entitled Chemical Bank v. Xxxxxxx Xxxxxx (93-117205, Supreme Court New York) and
agrees to place 75,000 shares in escrow with Xxxxxx & Xxxxxxxxx LLP with
instructions to sell such shares to provide a fund to pay such liabilities,
whether on behalf of Zanker or if the Company is called upon to pay such
liabilities. Upon satisfaction of the liabilities the remaining portion of the
fund, if any, will be paid to Zanker.
4. Except as set forth above, Zanker shall continue to perform services
under the Consulting Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
THE GREAT AMERICAN BACKRUB STORE, INC.
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx, President
