September 27, 2004
PERSONAL AND CONFIDENTIAL
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Xxxx Xxxxx Corp.
000 Xxxxxx Xxxxxx, XX
Xxxxxxxxxxx, X.X. 00000
Attn: Xxxx Xxxxx, President & CEO
Dear Xx. Xxxxx:
This letter agreement ("Agreement") confirms the terms and conditions of the
engagement of Greentree Financial Group, Inc. ("Greentree") by Xxxx Xxxxx Corp.
(the "Company") to render certain professional services to the Company in
connection with the Company's proposed registration statements.
1. Services. Greentree agrees to perform the following services:
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(a) Assist with the preparation of Form S-8 and related compensatory plan
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for officers, directors, employees and consultants;
(b) Assist with the preparation of Form SB-2 to help achieve your objective
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of a $5,000,000 capital raise, including drafting of the registration statement
and amendments required in connection with comments from the Securities and
Exchange Commission, reviewing of the Company's corporate documents in
preparation for filing the registration statement and answering comments from
the Securities and Exchange Commission;
(c) Assist with EDGARizing the aforementioned document as required by
the Securities and Exchange Commission, including any applicable amendments;
(d) Assist with amendment of articles of incorporation from 50 million to
200 million common shares and creation of a new preferred class of shares which
are convertible into common. Also, we will make introductions to investor
relations firms.
(e) Perform such other services as the Company and Greentree shall mutually
agree to in writing.
2. Fees. The Company agrees to pay Greentree for its services with a
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financial advisory fee ("Advisory Fee") of $29,500 payable as follows: $7,500
currently payable in S-8 stock (no cash necessary) valued at the current bid
price of the Company's stock and $22,000 payable in two weeks from today's date
with common stock (no cash necessary) valued at the current bid price of the
Company's stock. These shares will be registered in the Form SB-2 registration
statement. The Company agrees to compensate Greentree with additional cash or
shares if the quoted market value drops below an aggregate value of $29,500 at
the time the SB-2 goes effective. All shares issued to Greentree for its Service
Fee shall be included in the Company's registration statement on Form SB-2.
3. Term. The term of this Agreement shall commence on September 3, 2004.
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Greentree also agrees to assist in answering any SEC comments remaining in
connection with the registration statements. This agreement may be terminated by
the Company with 30 days prior written notice to Greentree. If the Company
terminates this Agreement prior to the expiration of the Term, the Company shall
pay to Greentree all reasonable expenses incurred, in accordance with Paragraph
5 hereof. Any obligation pursuant to this Paragraph 3, and pursuant to
Paragraphs 2, 4, 5, 6 and 8 hereof, shall survive the termination or expiration
of this Agreement.
4. Expenses. The Company agrees to reimburse Greentree for all of its
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reasonable out-of-pocket fees, expenses and costs (including, but not limited
to, legal, accounting, travel, accommodations, telephone, translation, computer,
courier and supplies) in connection with the performance of its services under
this Agreement, upon prior written approval. All such fees, expenses and costs
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will be billed at any time by Greentree and are payable by the Company when
invoiced. Upon expiration of the Agreement any unreimbursed fees and expenses
will be immediately due and payable.
5. Indemnification. In addition to the payment of fees and reimbursement of
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fees and expenses provided for above, the Company agrees to indemnify Greentree
and its affiliates with regard to the matters contemplated herein, as set forth
in Exhibit A, attached hereto, which is incorporated by reference as if fully
set forth herein.
6. Matters Relating to Engagement. The Company acknowledges that Greentree
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has been retained solely to provide the services set forth in this Agreement.
In rendering such services, Greentree shall act as an independent contractor,
and any duties of Greentree arising out of its engagement hereunder shall be
owed solely to the Company. The Company further acknowledges that Greentree may
perform certain of the services described herein through one or more of its
affiliates.
The Company acknowledges that Greentree is a consulting firm that is
engaged in providing financial advisory services. The Company acknowledges and
agrees that in connection with the performance of Greentree's services hereunder
(or any other services) that neither Greentree nor any of its employees will be
providing the Company with legal, tax or accounting advice or guidance (and no
advice or guidance provided by Greentree or its employees to the Company should
be construed as such) and that neither Greentree nor its employees hold itself
or themselves out to be advisors as to legal, tax, accounting or regulatory
matters in any jurisdiction. The attorneys and accountants that work for
Greentree are exclusively for Greentree's benefit. The Company shall consult
with its own legal, tax, accounting and other advisors concerning all matters
and advice rendered by Greentree to the Company and the Company shall be
responsible for making its own independent investigation and appraisal of the
risks, benefits and suitability of the advice and guidance given by Greentree to
the Company and the transactions contemplated by this Agreement. Neither
Greentree nor its employees shall have any responsibility or liability
whatsoever to the Company or its affiliates with respect thereto.
The Company recognizes and confirms that in performing its duties pursuant
to this Agreement, Greentree will be using and relying on data, material, and
other information (the "Information") furnished by the Company or their
respective employees and representatives. The Company will cooperate with
Greentree and will furnish Greentree with all Information concerning the Company
and any Transaction, Alternate Transaction or Financing which Greentree deems
appropriate and will provide Greentree with access to the Company's officers,
directors, employees, independent accountants and legal counsel for the purpose
of performing Greentree's obligations pursuant to this Agreement. The Company
hereby agrees and represents that all Information furnished to Greentree
pursuant to this Agreement shall be accurate and complete in all material
respects at the time provided, and that, if the Information becomes materially
inaccurate, incomplete or misleading during the term of Greentree's engagement
hereunder, the Company shall promptly advise Greentree in writing. Accordingly,
Greentree assumes no responsibility for the accuracy and completeness of the
Information. In rendering its services, Greentree will be using and relying
upon the Information without independent verification evaluation thereof.
7. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Florida without regard to the conflict
of laws provisions thereof.
8. No Brokers. The Company represents and warrants to Greentree that there
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are no brokers, representatives or other persons which have an interest in
compensation due to Greentree from any services contemplated herein.
9. Authorization. The Company and Greentree represent and warrant that each
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has all requisite power and authority, and all necessary authorizations, to
enter into and carry out the terms and provisions of this Agreement and the
execution, delivery and performance of this Agreement does not breach or
conflict with any agreement, document or instrument to which it is a party or
bound.
10. Miscellaneous. This Agreement constitutes the entire understanding and
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agreement between the Company and Greentree with respect to the subject matter
hereof and supersedes all prior understanding or agreements between the parties
with respect thereto, whether oral or written, express or implied. Any
amendments or modifications must be executed in writing by both parties. This
Agreement and all rights, liabilities and obligations hereunder shall be binding
upon and insure to the benefit of each party's successors but may not be
assigned without the prior written approval of the other party. If any
provision of this Agreement shall be held or made invalid by a statute, rule,
regulation, decision of a tribunal or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable. This Agreement may be executed in
any number of counterparts, each of which, shall be deemed to be an original,
but such counterparts shall, together, constitute only one instrument. The
descriptive headings of the Paragraphs of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not
affect in anyway the meaning or interpretation of this Agreement.
Please confirm that the foregoing correctly sets forth our agreement by
signing below in the space provided and returning this Agreement to Greentree
for execution, which shall constitute a binding agreement as of the date first
above written.
Thank you. We look forward to a mutually rewarding relationship.
GREENTREE FINANCIAL GROUP, INC.
By:______________________________
Name: Xxxxxxx X. Xxxxxxxxxxx, CPA
Title: President
AGREED TO AND ACCEPTED
AS OF SEPTEMBER 27, 2004:
XXXX XXXXX CORP.
By:______________________________
Name: Xxxx Xxxxx
Title: President & CEO
EXHIBIT A: INDEMNIFICATION
The Company agrees to indemnify Greentree, 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 Greentree
is referred to as "Indemnified Party") from and against any losses, claims,
damages and liabilities, joint or several (including all legal or 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 providing 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 or loss (i) caused by or
arising out of an untrue statement or an alleged untrue statement of a material
fact or omission or alleged omission to state a material fact necessary in order
to make a statement not misleading in light of the circumstances under which it
was made, (ii) caused by or arising out of any act or failure to act, or (iii)
arising out of Greentree's engagement or the rendering by any Indemnified Party
of its services under this Agreement; provided, however, that the 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 or willful misconduct of
the Indemnified Party seeking indemnification hereunder.
These indemnification provisions shall be in addition to any liability
which the Company may otherwise have to any Indemnified Party.
If for any reason, other than a final non-appealable judgment finding an
Indemnified Party liable for Damages for its gross negligence or willful
misconduct the foregoing indemnity is unavailable to an Indemnified Party or
insufficient to hold an Indemnified Party harmless, then the 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 the Company and its shareholders on the one hand
and the Indemnified Party on the other, but also the relative fault of the
Company and the Indemnified Party as well as any relevant equitable
considerations.
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 notify the Company in writing of the receipt or
commencement thereof and the Company shall have the right to assume the defense
of such claim or action (including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of fees and expenses of
such counsel), provided that the Indemnified Party shall have the right to
control its defense if, in the opinion of its counsel, the Indemnified Party's
defense is unique or separate to it as the case may be, as opposed to a defense
pertaining to the Company. In any event, the Indemnified Party shall have the
right to retain counsel reasonably satisfactory to the Company, at the Company's
sole expense, to represent it in any claim or action in respect of which
indemnity may be sought and agrees to cooperate with the Company and the
Company's counsel in the defense of such claim or action. In the event that the
Company does not promptly assume the defense of a claim or action, the
Indemnified Party shall have the right to employ counsel to defend such claim or
action. Any obligation pursuant to this Annex shall survive the termination or
expiration of the Agreement.
