FINANCIAL ADVISORY AND CONSULTING AGREEMENT
This
Consulting Agreement (“Agreement”) is made and entered into this 16th day of
March between 247 MGI Corp. (the “Company”), and Xxxxxx Xxxxx Securities, Inc.,
a Florida Corporation (the “Consultant”).
In
consideration of and for the mutual promises and covenants contained herein,
and
for other good and valuable consideration (the receipt of which is hereby
acknowledged) the parties hereto mutually agree and intend to be legally bound
to the terms of this Agreement as follows:
1. Purpose.
The
Company hereby retains the Consultant during the term specified to render
consulting advice to the Company relating to financial advisory services as
set
forth in Section 3 below, investment banking and merger/acquisition matters,
upon the terms and conditions as set forth herein.
2. Terms
and Consideration.
(a)
The
term of this Agreement shall be for a period of Twelve (12) months commencing
from the Effective Date of this Agreement (the “Engagement Period”), unless
extended by mutual written agreement of the Company and the Consultant.
The Company shall pay Consultant equity in the form of Two Million (2,000,000)
shares of restricted common stock and One Million (1 million) five year term
common stock purchase warrants exercisable at twenty-five cents (.25) with
piggy-back registration rights. In the event the common shares underlying the
warrants are not registered, then the warrants will have a cashless exercise
feature. Cash compensation shall be $5,000 per month payable upon execution
of
this agreement.
(b)
Should the Company do any acquisition, merger, joint venture, or sale of
substantially all of its assets (the “Transaction”) which is sourced through the
Consultant, then Company shall execute with the Consultant an engagement letter
related to any such Transaction, which shall include a 6% cash commission to
Consultant and 6% common stock as is standard for the Consultant, in addition
to
any other fees as may be set forth herein..
3. Financial
Advisory Services of Consultant.
Consultant,
based on its review of the Company to date, believes that it may assist the
Company by performing the financial advisory services related to a merger or
sales of the company. The Company hereby acknowledges that Consultant will
be
using and relying on said information without independent verification and
that
Consultant assumes no responsibility for the accuracy and completeness of any
information provided to it by the Company. In performance of these duties,
the Consultant shall provide the Company with the benefits of its best judgment
and efforts. It is understood and acknowledged by the parties that the
value of the Consultant’s advice is not measurable in any quantitative manner,
and that the Consultant shall not be obligated to spend any specific amount
of
time performing its duties hereunder.
4. Covenants
of the Company.
(a)
The
Company agrees that for a period of twelve months from the date hereof, it
shall
use the investment banking services of Consultant. Should the Consultant perform
any services related to raising equity capital or debt on behalf of the Company,
the Company will execute with the Consultant a Selling Agreement related to
any
such offering, which shall include a commission to Consultant and warrant
coverage as is standard for the Consultant, in addition to any other fees as
may
be set forth herein.
(b)
If
(but without any obligation to do so) at any time during the two (2) year period
commencing on the issue date of securities to the Consultant as compensation,
the Company, merged Company, or any equity based business combination proposes
to register any of its common stock ("Registrable Securities") in connection
with the public offering of such securities the Company shall, each such time,
promptly give the Consultant written notice of such registration. Upon the
written request of the Consultant given within twenty (20) days after receipt
of
such written notice from the Company, the Company shall cause to be registered
all of the Registrable Securities that the Consultant has requested to be
registered; and provided further, however, that the Registrable Securities
shall
be subject to restrictions on transfer for forty-five (45) days after the
effective date of the subject registration statement.
5. Consultant’s
Relationship with Others
The
Company acknowledges that the Consultant or its affiliates is in the business
of
providing financial, investment banking and merger/acquisition services and
consulting advice (of all types contemplated by this Agreement) to others.
6. Confidential
Information
In
connection with the rendering of services hereunder, Consultant has been or
will
be furnished with confidential information concerning the Company including,
but
not limited to, financial statements and information, cost and expense data,
production data, trade secrets, marketing and customer data, and such other
information not generally obtained from public or published information or
trade
sources. Such information shall be deemed “Confidential Material” and,
except as specifically provided herein, shall not be disclosed by Consultant
without prior written consent of the Company. In the event Consultant is
required by applicable law or legal process to disclose any of the Confidential
Material, it is agreed that Consultant will deliver to the Company prompt notice
of such requirement prior to disclosure of same to permit the Company to seek
an
appropriate protective order and/or waive compliance of this provision.
If, in the absence of a protective order or receipt of written waiver,
Consultant is nonetheless, in the written opinion of counsel, compelled to
disclose any Confidential Material, Consultant may do so without liability
hereunder provided that notice of such prospective disclosure is delivered
to
the Company prior to actual disclosure. Following the termination of this
Agreement and a written request by the Company, Consultant shall deliver to
the
Company all Confidential Material. This provision shall survive the termination
of this Agreement for any reason.
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7.
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Consultant’s
Liability & Indemnification of Consultant by
Company.
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In
the absence of gross negligence or willful misconduct on the part
of
Consultant or Consultant’s material breach of this Agreement, Consultant
shall not be liable to the Company or to any officer, director, employee,
agent, representative, stockholder or creditor of the Company for
any
action or omission of Consultant or any of its officers, directors,
employees, agents, representatives or stockholders in the course
of, or in
connection with, rendering or performing any services
hereunder.
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8. Termination.
This
Agreement may be terminated at any time during the Engagement Period by
Consultant upon five (5) days prior written notice to the Company, in the event
that Consultant becomes aware of (i) any change in the business or operations
of
the Company which Consultant reasonably believes may adversely affect
Consultant’s ability to render the services contemplated hereunder, (ii) any
material misrepresentation by the Company with respect to the business
operations, assets, condition (financial or otherwise), results of operations
or
prospects of the Company, or (iii) any breach by the Company of its obligations
under this Agreement, which remain uncured for a period of fifteen days after
written notice of the breach is provided to the Company.
This
Agreement may be terminated by the Company at any time during the Engagement
Period upon five (5) days prior written notice to the Consultant only in the
event of a material breach by Consultant of its obligations hereunder, which
breach remains uncured for a period of fifteen days after written notice of
the
breach is provided to Consultant.
In
the
event of termination (i) this Agreement shall become void, without liability
on
the part of either party or their affiliates, directors, officers or
stockholders except as set forth in Section 7(a) above, and (ii) Consultant
shall be entitled to reasonable expenses it has incurred pursuant to this
Agreement up to the date of such termination that have yet to be reimbursed;
and
(iii) all provisions contained in section 6 above survive the
termination.
9. Expenses.
The
Company, subject to prior written approval by the Company for any amount in
excess of $500, and upon receipt of appropriate supporting documentation, shall
reimburse the Consultant and/or any other party retained by the Consultant,
for
any and all reasonable out-of-pocket expenses incurred in connection with
services provided to
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the
Company including but not limited to legal, travel, lodging and meals,
entertainment, postage, photocopying and long distance telephone expenses;
provided, however, that the aggregate of such expenses shall not exceed $30,000
without the Company's prior written consent. The Company shall reimburse the
Consultant within 45 days of receipt of supporting documentation. The Company
hereby acknowledges that unless otherwise specifically stated herein, that
neither Consultant, nor its directors, employees or agents is responsible for
any fees or commissions payable now or in the future to any finder or to any
other financial or other advisor utilized or retained by the Company. The
Consultant acknowledges that as of the date of this Agreement, the Consultant
is
not due any funds from the Company.
10. Sales
or Distributions of Securities
If
the
Consultant assists the Company in the sale or distribution of securities, the
Consultant shall receive fees and other forms of compensation as agreed to
by
the Company and the Consultant. Such public offering or private placement,
undertaken by the Consultant on behalf of the Company, shall be subject to
an
additional agreement to be executed by the parties hereto at such time as is
appropriate.
11. Limitation
Upon the Use of Advice and Services.
(a)
No
person
or entity, other than the Company or any of its subsidiaries or directors or
officers of each of the foregoing, shall be entitled to make use of or rely
upon
the advice of the Consultant to be given hereunder, and the Company shall not
transmit such advice to, or encourage or facilitate the use or reliance upon
such advice by others without the prior consent of the Consultant.
(b) Company
hereby acknowledges that Consultant, for services rendered under this Agreement,
makes no commitment whatsoever to recommend or advise its clients to purchase
the securities of the Company. Research reports that may be prepared by
Consultant will, when and if prepared, be based solely on the merits, and
independent judgment of analysts of the Consultant.
(c) Company
hereby acknowledges that Consultant, for services rendered under this Agreement,
makes no commitment whatsoever to make a market in any of the Company’s
securities on any stock exchange or in any electronic marketplace. Any
decision by Consultant to make a market in any of the Company’s securities shall
be based solely on the independent judgment of Consultant’s traders and related
supervisory personnel.
(d) Use
of
the Consultant’s name in annual reports or any other report of the Company or
releases by the Company require the prior approval of the Consultant unless
the
Company is required by law to include Consultant’s name in such annual reports,
other report or release of the Company, in which event the Company shall furnish
to Consultant copies of such annual reports or other reports or releases using
Consultant’s name in advance of publication by the Company, its affiliates or
assigns.
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12. Discretion.
Nothing
contained herein shall require the Company to enter into any transaction
presented to it by Consultant, which decision shall be at the Company’s sole
discretion.
13. Severability.
Any
term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable, the provision shall be interpreted to be only so broad as
is
enforceable.
14. Miscellaneous
(a) Any
notice or other communication between parties hereto shall be sufficiently
given
if sent by certified or registered mail, postage prepaid, or faxed and confirmed
if to the Company, addressed to the Company at the address listed in the
Preamble or if to the Consultant, addressed to Xxxxxxx Xxxxxxxx, Xxxxxx Xxxxx
Securities, 000 Xxxxx Xxxxxxx Xxxxxxx, 0xx
Xxxxx,
Xxxx Xxxxx, XX 00000. Such notice or other communication shall be deemed
to be given on the date of receipt.
(b) If
the
Consultant shall cease to do business, the provisions hereof relating to duties
of the Consultant and compensation by the Company as it applies to the
Consultant shall thereupon cease to be in effect.
(c) This
Agreement embodies the entire agreement and understanding between the Company
and the Consultant and supersedes any and all negotiations, prior discussions
and preliminary and prior agreements and understandings related to the central
subject matter hereof.
(d) This
agreement has been duly authorized, executed and delivered by and on behalf
of
the Company and the Consultant.
(e) There
is
no relationship of partnership, agency, employment, franchise or joint venture
between the parties. Neither party has the authority to bind the other or
incur any obligation on its behalf.
(f)
The
Company hereby acknowledges that Consultant is not a fiduciary of the Company
and that Consultant makes no representations or warranties regarding Company’s
ability to secure financing, whether now or in the future.
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(g) This
Agreement and the rights hereunder may not be assigned by Company without the
prior written consent of Consultant. This Agreement may not be assigned by
Consultant, in whole of in part, without prior consent of Company.
This Agreement shall be binding upon and inure to the benefit of the parties
and
their respective successors, assigns and legal representatives.
15. Governing
Law.
This
Letter of Intent shall be construed under the laws of the State of Florida
, and
shall inure to the benefit of, and be binding upon, the respective successors
and assigns of the parties to this Letter of Intent. The parties agree that
any
action brought by any party against another party in connection with any rights
or obligations arising out of this Letter of Intent shall be instituted properly
in a federal or state court of competent jurisdiction with venue in the
appropriate state court in and for Palm Beach County, Florida, or the United
States District Court for the Southern District of Florida. A party to this
Letter of Intent named in any action brought in connection with this Letter
of
Intent in any court outside of the above named designated county or district
shall have the right to have the venue of said action changed to the above
designated county or district or, if necessary, have the case dismissed,
requiring the other party to refile such action in an appropriate court in
the
above designated county or federal district
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
hereof.
247
MGI
Inc.
/s/:Xxxxxxx
X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
President
Xxxxxx
Xxxxx Securities
/s/:Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Title:
Managing Partner
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