July 23, 2008 Theater Xtreme Entertainment Group, Inc. Newark, DE 19702 Dear Mr. Oberosler:
Exhibit 10.1
July 23,
2008
000
Xxxxxxxxx Xxxxxxxxx, Xxxxxx X xxx X
Xxxxxx,
XX 00000
Dear Xx.
Xxxxxxxxx:
Theater
Extreme Entertainment Group, Inc., a Florida corporation (hereinafter referred
to as the “Client”) has agreed to engage Xxxxx, Goddard, McGowan, Pak &
Partners, LLC (“Xxxxx Partners”) on a non-exclusive basis to perform
services related to financial consulting and public relations matters
(“Services”) pursuant to the terms and conditions of this Consulting Agreement
(“Agreement”) as set forth herein.
1.
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Services. Xxxxx
Partners shall act as advisor to the Client and perform such Services as
requested by the Client, which Services may include, but will
not necessarily be limited to:
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a.
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advice
regarding obtaining financing, including introducing the Company to
accredited investors, which may be corporations, partnerships, mutual
funds, hedge
funds, investment partnerships, securities firms, lending and other
institutions and entities, as well as select high net worth individuals
for the purposes of providing financing in the form of equity or
equity-linked securities of the Company or a combination of the foregoing
(a “Corporate Financing
Transaction”);
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b.
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advice
regarding the financial structure of the Company or its divisions or any
programs and projects undertaken by any of the
foregoing;
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c.
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counsel
Client regarding its overall strategy and related activities within the
financial community;
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d.
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assist
Client with the preparation and revision of presentation materials for
meetings with the investment community;
and
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e.
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Such
other duties as Client may reasonably request of Xxxxx Partners from time
to time.
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In
addition, from time to time, subject to scheduling availability, Xxxxx Partners
shall:
i.
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meet
with the financial community on behalf of
Client;
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ii.
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survey
key analysts, brokers and institutional investors
nationwide;
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iii.
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maintain
ongoing personal contact programs and establish a schedule of activities;
and
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iv.
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arrange
meetings between Client’s senior management and members of the financial
community, including individual meetings, informal group meetings and
formal presentations.
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2.
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Performance of
Services. Xxxxx Partners shall be obligated to provide the Services
as and when requested by Client but shall not be obligated to expend any
specific amount of time in so doing and shall not be authorized or
obligated to perform any Services on Xxxxx Partners’ own initiative. The
Services shall be performed reasonably promptly after Client’s request,
consistent with Xxxxx Partners’ availability and good faith. The Company
acknowledges that the Services to be provided hereunder are not exclusive
to the Client and Xxxxx Partners has other business obligations, including
providing investment banking, financial advisory and consultant services
to others, and the Company agrees that the provision of such services
shall not constitute a breach hereof of any duty owed to the Company by
virtue of this Agreement. Nothing contained herein, other than
Xxxxx Partners’
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July 23,
2008
Page 2
obligations
relating to the Company’s Confidential Material as provided in Section 9 hereof,
shall be construed to limit or restrict Xxxxx Partners or its affiliates in
conducting such businesses with respect to others or in rendering such services
to others
3.
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Relationship of the
Parties. Xxxxx Partners shall be, and at all times during the Term
of the Agreement shall remain, an independent contractor. As such, Xxxxx
Partners shall determine the means and methods of performing the Services
hereunder and shall render the Services at such places it determines. The
Client shall pay all reasonable costs and expenses incurred by Xxxxx
Partners in the performance of its duties hereunder, including but not
limited to reasonable and documented travel, legal fees and other
expenses. Xxxxx Partners shall provide notice to the Company at
such time, if any, the foregoing expenses exceed $1,500 in the
aggregate. Xxxxx Partners will not bear any of the Company’s
legal, accounting, printing or other expenses in connection with any
transaction considered or consummated hereby. It also is
understood that neither Xxxxx Partners, nor any of its officers,
directors, employees or agents, will be responsible for any fees or
commissions payable to any finder or to any other financial or other
advisor utilized or retained by the
Company.
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4.
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Assurances.
Client acknowledges that all opinions and advices (written or oral) given
by Xxxxx Partners to the Client in connection with this Agreement are
intended solely for the benefit and use of Client, and Client agrees that
no person or entity other than Client shall be entitled to make use of or
rely upon the advice of Xxxxx Partners to be given
hereunder. Furthermore, no such opinion or advice given by
Xxxxx Partners shall by used at any time, in any manner or for any
purpose, and shall not be reproduced, disseminated, quoted or referred to
at any time, in any manner or for any purpose, except as may be
contemplated herein. Client shall not make any public references to Xxxxx
Partners without Xxxxx Partners’ prior written consent or as required by
applicable law.
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5.
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Compensation.
In consideration of such Services, the Company agrees to pay Xxxxx
Partners during the Term a non-accountable and non-refundable monthly
retainer of Five Thousand ($5,000) Dollars, with the first payment due
upon the execution and delivery of this Agreement and subsequent payments
due on the last day of each month thereafter while this Agreement is in
effect. In addition, upon execution of this Agreement, the
Company will issue to Xxxxx Partners warrants to purchase an aggregate of
4,500,000 shares of the Company’s common stock at an exercise price of
$0.10 per share.
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6.
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Additional
Services. Should Client desire Xxxxx Partners to perform additional
services not outlined herein, Client may make such request to Xxxxx
Partners in writing. Xxxxx Partners may agree to perform those services at
its sole discretion and may enter into additional definitive agreements
with the Company which shall set forth Xxxxx Partners’ obligations in
connection with such transactions, as well as the compensation to be paid
Xxxxx Partners with respect to its additional services. The
monthly retainer shall not be credited to any additional compensation to
be paid for such additional
services.
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7.
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Approval of Client
Information. Client will be required to approve all stockholder
communications, press release and other materials prepared and
disseminated on its behalf by Xxxxx
Partners.
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8.
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Term. This
Agreement shall remain in effect until July 31,
2010.
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9.
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Due
Diligence/Disclosure
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a.
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Client
recognizes and confirms that, in advising Client and in fulfilling its
retention hereunder, Xxxxx Partners will use and rely upon data, material
and other information furnished to it by Client. Client acknowledges and
agrees that in performing its Services under this Agreement, Xxxxx
Partners may rely upon the data, material and other information supplied
by Client without independently verifying the accuracy, completeness or
veracity of same. Such information shall be deemed
“Confidential Material”.
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July 23,
2008
Page 3
b.
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Except
as contemplated by the terms hereof or as required by applicable law,
Xxxxx Partners shall keep confidential, indefinitely, all Confidential
Material provided to it by Client, and shall not disclose such information
to any third party without Client’s prior written consent, other than such
of its employees and advisors as Xxxxx Partners reasonably determines to
have a need to know. In the event Xxxxx Partners is required by
applicable law or legal process to disclose any of the Confidential
Material, Xxxxx Partners will deliver to the Company prompt notice of such
requirement (by fax or overnight courier promptly following Xxxxx
Partners’ knowledge or determination of such requirement) prior to such
disclosure so the Company may seek an appropriate protective order and/or
waive compliance of this provision. If, in the absence of a
protective order (because the Company elected to not seek such an order or
it was denied by a court of competent jurisdiction) or receipt of written
waiver, Xxxxx Partners is nonetheless, in the written opinion of its
counsel, compelled to disclose any Confidential Material, Xxxxx Partners
may do so without liability
hereunder.
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10. Indemnification. The Company
agrees to indemnify Xxxxx Partners in accordance with the provisions of Annex A
hereto, which is incorporated by reference and made a part
hereof.
11. Limitation Upon the Use of
Advice and Services
(a)
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No
person or entity, other than the Company (including its directors,
officers and employees), shall be entitled to make use of, or rely upon
any advice of Xxxxx Partners 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 written consent of
Xxxxx Partners.
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(b)
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Use
of Xxxxx Partners’ name in annual reports or any other report of the
Company or releases by the Company requires the prior written approval of
Xxxxx Partners unless the Company is required by law to include Xxxxx
Partners’ name in such annual reports, other report or release of the
Company, in which event the Company shall furnish to Xxxxx Partners copies
of such annual reports or other reports or releases using Xxxxx Partners’
name in advance of publication by the
Company.
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12.
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Cooperation. The Company
will cooperate with and will xxxxxxx Xxxxx Partners or entities introduced
by Xxxxx Partners with all reasonable information and data concerning the
Company which Xxxxx Partners appropriate and will provide Xxxxx Partners
with reasonable access to the Company’s officers, directors, employees,
independent accountants and legal counsel. The Company
represents that all information made available to Xxxxx Partners for
distribution to investors will be complete and correct in all material
respects. Notwithstanding anything set forth above to the
contrary, Xxxxx Partners shall not be responsible for any due diligence
investigation of the Company on behalf of any other party in connection
with its services hereunder or in connection with any Corporate Finance
Transaction.
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13.
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Right of First
Refusal. The Company will xxxxx Xxxxx Partners a thirty-six (36)
month right of first refusal to with respect to the Company’s next two
financings to act either as lead placement agent on any future private
placement of the Company’s securities or as lead managing underwriter on
any public offering of the Company’s securities. It is
understood that if a third party broker-dealer provides the Company with
written terms with respect to a future securities offering (“Written
Offering Terms”), the Company shall promptly present same to Xxxxx
Partners. Xxxxx Partners shall have ten (10) business days from
its receipt of the Written Offering Terms in which to determine whether or
not to accept such offer and, if Xxxxx Partners refuses, and provided that
such financing is consummated (a) with another placement agent or
underwriter upon substantially the same terms
and
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July 23,
2008
Page 4
conditions
as the Written Offering Terms and (b) within three months after the end of the
aforesaid ten (10) business day period, this right of first refusal shall
thereafter be forfeited and terminated; provided, however, if the
financing is not consummated under the conditions of clauses (a) and (b) above,
then the right of first refusal shall once again be reinstated under the same
terms and conditions set forth in this paragraph.
14.
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Termination. This
Agreement may be terminated at any time prior to the expiration of the
Term by Xxxxx Partners upon five (5) days prior written notice to the
Company. In the event of any such
termination, this engagement letter
shall terminate and shall be of no further force and effect except for (i)
continuing indemnity obligations hereunder, and (ii) Xxxxx
Partners shall be entitled to retain compensation for services it has
rendered, and receive reimbursement for expenses it has incurred up to the
date of such termination in accordance with Section
3.
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This
Agreement may be terminated at any time prior to the expiration of the Term by
the Company upon five (5) days prior written notice to Xxxxx
Partners. In the event of such termination, this engagement letter
shall terminate and shall be of no further force and effect except for (i) continuing indemnity obligations hereunder, (ii) Xxxxx Partners
shall be entitled to retain compensation for services it has rendered, and
receive reimbursement for expenses it has incurred up to the date of such
termination in accordance with Section 3, and (iii) in the event that within eighteen months
following such termination, the Company consummates a Corporate Finance
Transaction in which a third party placement agent or underwriter is engaged (or
the Company enters into any agreement (including, without limitation, a letter
of intent) with respect to a financing transaction within such eighteen month
period which is consummated at any time thereafter), Xxxxx Partners shall be
entitled to a cash fee equal to 2% of the gross proceeds raised in such
transaction to be paid promptly upon closing of such
transaction.
In the
event this Agreement shall be terminated in accordance with the provisions of
this Section 14 or upon expiration of this Agreement, the sections headed “Due
Diligence/Disclosure,” “Indemnification,” “Non-Contravention,” “Miscellaneous,”
“Relationship of the Parties,” “Limitation of Liability” will
survive.
15.
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General
Provisions.
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a.
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Entire
Agreement. This Agreement between Client and Xxxxx Partners
constitutes the entire agreement between and understandings of the parties
hereto, and supersedes any and all previous agreements and understandings,
whether oral or written, between the parties with respect to the matters
set forth herein.
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b.
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Notice. Any
notice or communication permitted or required hereunder shall be in
writing and deemed sufficiently given if hand-delivered (i) five (5)
calendar days after being sent postage prepaid by registered mail, return
receipt requested; or (ii) one (1) business day after being sent via
facsimile with confirmatory notice by U.S. mail, to the respective parties
as set forth above, or to such other address as either party may notify
the other in writing.
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c.
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Binding Nature.
This Agreement shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors, legal representatives
and assigns. All materials generated pursuant to Section 1 or otherwise
produced by Xxxxx Partners for and on behalf of Client during the Term of
this Agreement shall be the sole and exclusive property of
Client.
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d.
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Counterparts.
This Agreement may be executed in one or more counterparts, all of which
when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party
and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of
a “.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original
thereof.
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July 23,
2008
Page 5
e.
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Amendments. No
provisions of the Agreement may be amended, modified or waived, except in
writing signed by all parties
hereto.
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f.
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Assignment.
This Agreement cannot be assigned or delegated, by either party, without
the prior written consent of the party to be charged with such assignment
or delegation, and any unauthorized assignments shall be null and void
without effect and shall immediately terminate the
Agreement.
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g.
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Applicable
Law. This Agreement shall be deemed to have been made
and delivered in New York City and shall be governed as to validity,
interpretation, construction, affect and in all other respects by the
internal laws of the State of New York. The parties agree that any
dispute, claim or controversy directly or indirectly relating to or
arising out of this Agreement, the termination or validity hereof, any
alleged breach of this Agreement or the engagement contemplated hereby
(any of the foregoing, a “Claim”) shall be submitted to the Judicial Arbitration and Mediation Services,
Inc (JAMS), or its successor, in New York, for final and binding
arbitration in front of a panel of three arbitrators with JAMS in New
York, New York under the JAMS Comprehensive Arbitration Rules and
Procedures (with each of Xxxxx Partners and the Company choosing one
arbitrator, and the chosen arbitrators choosing the third
arbitrator). The arbitrators shall, in their award, allocate
all of the costs of the arbitration, including the fees of the arbitrators
and the reasonable attorneys’ fees of the prevailing party, against the
party who did not prevail. The award in the arbitration shall
be final and binding. The arbitration shall be governed by the
Federal Arbitration Act, 9 U.S.C. Sec.1-16, and the judgment upon the
award rendered by the arbitrators may be entered by any court having
jurisdiction thereof. The Company and Xxxxx Partners agree and
consent to personal jurisdiction, service of process and venue in any
federal or state court within the State and County of New York in
connection with any action brought to enforce an award in
arbitration.
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h.
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There
is no relationship of partnership, agency, employment, franchise or joint
venture between the parties. No party has the authority to bind
the other or incur any obligation on the other’s
behalf.
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i.
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The
Company hereby acknowledges that Xxxxx Partners is not a fiduciary of the
Company. The execution of this Agreement does not constitute a
commitment by Xxxxx Partners or the Company to consummate any transaction
contemplated hereunder and does not ensure the successful placement or
underwriting of securities of the Company or the success of Xxxxx Partners
with respect to securing any financing or acquisition targets on behalf of
the Company.
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j.
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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 as broad as is
enforceable.
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July 23,
2008
Page 6
16.
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Limitation of
Liability. The Company agrees that Xxxxx Partners will
not be liable to the Company for any claims, losses, damages, liabilities,
costs or expenses related to the engagement hereunder, except to the
extent finally judicially determined to have resulted solely from the
gross negligence or willful misconduct of Xxxxx Partners, and then only to
the extent of any compensation paid to Xxxxx Partners by the Company
hereunder. In no event xxxx Xxxxx Partners be liable for
consequential, special, indirect, incidental, punitive or exemplary
losses, damages or expenses.
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17.
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Non
Contravention. During the
Engagement Period, the Company shall not negotiate, enter into or attempt
to negotiate or enter into any agreement, covenant or understanding,
written or oral, with any other person or entity, directly or indirectly,
that could in any manner be construed to be inconsistent with this
Agreement or could undermine any of the rights or interests of Xxxxx
Partners, in, under or in respect of this Agreement and agrees not to
interfere with, circumvent, frustrate or otherwise impede in any manner
the realization by Xxxxx Partners of any of the objectives it seeks or
benefits derived, or to be derived, from any of the
foregoing.
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blank)
July 23,
2008
Page 7
If you
are in agreement with the foregoing, please execute two copies of this Agreement
in the space provided below and return them to the undersigned along with a
check written to our order in the amount of $5,000.
Very
truly yours,
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Xxxxx
Xxxxxxx XxXxxxx Pak & Partners, LLC
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By:
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___________________________________
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Xxxx
X. Xxxxxxx,
Chairman
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ACCEPTED
AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN
Theater
Xtreme Entertainment Group,
Inc.
By:
________________________________
Xxxxxx X. Xxxxxxxxx, CEO
ANNEX A
INDEMNIFICATION
The
Company agrees to indemnify and hold harmless Xxxxx Partners and its affiliates
and their respective officers, directors, employees, agents (including selected
dealers) and controlling persons (Xxxxx Partners and each such person being an
“Indemnified Party”), from and against any losses, claims, damages and
liabilities, joint or several, to which such Indemnified Party may become
subject under any applicable law, or otherwise, which relate to or arise in any
manner out of any transaction, financing, or any other matter (collectively, the
"Matters") contemplated by the engagement letter of which this Annex A forms a
part and the performance by Xxxxx Partners of the services
contemplated thereby, and will promptly reimburse each Indemnified Party for all
reasonable expenses (including reasonable fees and expenses of legal counsel) as
incurred in connection with the investigation of, preparation for or defense of
any pending or threatened claim or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party and whether or not such claim,
action or proceeding is initiated or brought by or on behalf of the
Company. Notwithstanding the foregoing, the Company shall not
be liable under the foregoing to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from Xxxxx Partners’ bad faith or gross
negligence.
The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company or its
security holders or creditors related to, arising out of, or in connection with,
any Matters, the engagement of Xxxxx Partners pursuant to, or the performance by
Xxxxx Partners of the services contemplated by, the engagement letter, except to
the extent any loss, claim, damage, liability if found in a final judgment by a
court of competent jurisdiction to have resulted from Xxxxx Partners’ bad faith
or gross negligence.
If the
indemnification of an Indemnified Party provided for this letter agreement is
for any reason held unenforceable, although otherwise applicable in accordance
with its terms, the Company agrees to contribute to the losses, claims, damages
and liabilities for which such indemnification is held unenforceable (i) in such
proportion as is appropriate to reflect the relative benefits to the Company, on
the one hand, and Xxxxx Partners, on the other hand, of any Matter (whether or
not the Matter is consummated) or (ii) if (but only if) the allocation provided
for in clause (i) is for any reason held unenforceable, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company, on the one hand, and Xxxxx Partners,
on the other hand, as well as any other relevant equitable considerations. The
Company agrees that for the purposes of this paragraph the relative benefits to
the Company and Xxxxx Partners of any contemplated Matter (whether or not such
Matter is consummated) shall be deemed to be in the same proportion that the
total value paid or received or to be paid or received by the Company as a
result of or in connection with any Matter, bears to the fees paid or to be paid
to Xxxxx Partners under the engagement letter; provided, however, that, to the
extent permitted by applicable law, in no event shall the Indemnified Parties be
required to contribute an aggregate amount in excess of the aggregate fees
actually paid to Xxxxx Partners under the engagement letter of which this Annex
A is a part.
The
Company agrees that it will not, without the prior written consent of Xxxxx
Partners, settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding in respect of which
indemnification may be sought hereunder (whether
or not Xxxxx Partners or any other Indemnified Party is an actual or potential
party to such claim, action or proceeding), unless such settlement, compromise
or consent includes an unconditional release of Xxxxx Partners and each other
Indemnified Party hereunder from all liability arising out of such claim, action
or proceeding.
If Xxxxx
Partners or any other Indemnified Party is requested or required to appear as a
witness in any action brought by or on behalf of or against the Company in which
such party is not named as a defendant, the Company will reimburse Xxxxx
Partners for all reasonable expenses incurred in connection with such party’s
appearing and preparing to appear as such a witness, including, without
limitation, the fees and disbursements of its legal counsel.
The
provisions of this Annex A shall continue to apply and shall remain in full
force and effect regardless of any modification or termination of the engagement
or engagement letter of which this Annex A is a part or the completion of Xxxxx
Partners’ services thereunder.