SERVICES AGREEMENT
EXHIBIT 10.14
THIS SERVICES AGREEMENT (this “Agreement”) dated
as of September 14, 2016 (the “Effective Date”), is
entered into between VISUALANT, INC., (hereinafter the
“Company”) a Nevada corporation, with a place of
business at 000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 and, Redwood Investment
Group, LLC (“hereinafter “REDWOOD”) a California
Corporation, with a place of business at 0000 Xxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx, 00000. The Company and REDWOOD are sometimes
referred to collectively herein as the “Parties”, and
each individually as a “Party”.
In
consideration of the promises and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby agree as
follows:
1.
Engagement for
Services. Company
hereby engages REDWOOD to be a provider of those services described
on Exhibit “A” (the “Services”), attached
hereto and incorporated herein by reference, during and throughout
the Term. The Services may be amended and revised at any time only
by mutual written consent of the Parties. The engagement of REDWOOD
hereunder is “non-exclusive” and the Company may hire
any other person or entity to perform the same or similar
Services.
2.
Term and
Termination.
2.1 Term.
The Services shall commence as of and on the 14th day of September 2016 (the
“Start
Date”) and will terminate twelve (12) months
thereafter, unless terminated earlier (“Termination
Date”) as set forth below (the “Initial
Term”).
2.2 Renewal
Term. This Agreement
shall automatically renew for an additional twelve (12) months (the
“Renewal
Term”) unless either Party provides written notice to
the other at least sixty (60) days prior to the end of the Initial
Term of its decision to not renew. The “Term” hereunder shall
refer to the Initial Term and the Renewal Term, if
any.
2.3 Early Termination
by Company For
Cause. Company may
terminate this Agreement upon a material breach of this Agreement
by REDWOOD and said breach is not cured by REDWOOD within thirty
(30) days after receipt of written notice from Company detailing
the nature of the material breach.
2.4 Early Termination by Company without
Cause. Company may
terminate this Agreement, without cause, upon thirty (30) days
written notice of the Termination Date, after completing 120 days,
from the Company to Redwood. Redwood will immediately cease
performing Services. Notwithstanding anything to the contrary, the
Company will pay Redwood all compensation due to the Termination
Date but not less than all compensation that would be due through
and including January 14, 2016 pursuant to Section 3 (a) hereof and
shall reimburse Redwood for all reasonable expenses incurred by
Redwood in connection with the Services hereunder pursuant to
Section 3(b). All such fees and reimbursements due to Redwood shall
be paid to Redwood on or before the Termination Date.
2.5 Early Termination by Redwood For
Cause. REDWOOD may
terminate this Agreement immediately for a material breach by
Company if Company’s material breach of any provision of this
Agreement is not cured within thirty (30) days after the date of
REDWOOD’s written notice of breach.
2.6 Early Termination by Redwood without
Cause. Redwood may terminate this
Agreement, without cause, upon thirty (30) days written notice of
the Termination Date, after completing 120 days, from Redwood to
the Company. Redwood will immediately cease performing Services.
Notwithstanding anything to the contrary, the Company will pay
Redwood all compensation due to the Termination Date but not less
than all compensation that would be due through and including
October 15, 2016 pursuant to Section 3 (a) hereof and shall
reimburse Redwood for all reasonable expenses incurred by Redwood
in connection with the Services hereunder pursuant to Section 3(b).
All such fees and reimbursements due to Redwood shall be paid to
Redwood on or before the Termination Date.
1
2.7 Survival of Certain
Provisions. Sections 3, 7, 8,
9, and 11, inclusive, shall remain operative and in full force and
effect regardless of the expiration or termination of this
Agreement.
3. Compensation.
In payment for Services rendered and to be rendered hereunder,
Company agrees to compensate REDWOOD as follows:
(a) Beginning
September14th 2016 and on the 14th of each successive
month during the Term, the Company shall pay Redwood a
nonrefundable engagement fee (“Engagement Fee”) Twelve
Thousand Dollars ($12,000), which amount will increase to Fifteen
Thousand Dollars ($15,000) after the Company has raised $1.5
million of equity capital.
Company
shall grant REDWOOD or its designee(s) shares (the
“SHARES”) of the Company’s restricted common
stock, which SHARES shall be non-forfeitable and earned in full and
is subject to the provisions of Sections 2.3, 2.4, 2.5 and 2.6, and
issued under and pursuant to the terms of Regulation D under the
Securities Act of 1933 (the “Securities Act”), fully
vesting, fully earned and issued as follows; 100,000 shares upon
execution of this Agreement,50,000 shares on January 14th , 2017, and 150,000
shares on June 12th, 2017. The issuance
of the SHARES will have received approval from the Company’s
Board of Directors.
●
The SHARES granted
under this Agreement shall be registered in the name of REDWOOD or
its designee(s), as defined in the Letter of Instructions supplied
by REDWOOD at the time of issuance and shall be made part of this
Agreement.
●
Immediately upon
the start of a Renewal Term under Section 2.2, above, the monthly
Engagement Fee shall continue at fifteen Thousand Dollars
($15,000.00), assuming the $1.5 million of capital referenced above
has been raised. Company shall grant REDWOOD SHARES of the
Company’s restricted common stock, which SHARES shall be
non-forfeitable and earned in full by REDWOOD, up to Termination
Date and is subject to the provisions of Sections 2.3, 2.4, 2.5 and
2.6, and issued under and pursuant to the terms of Regulation D
under the Securities Act of 1933 (the “Securities Act”), fully
vesting, fully earned and issued as follows; 100,000 SHARES upon
Renewal of this Agreement, 100,000 SHARES on January 14th, 2018,
and 100,000 SHARES on June 14th , 2018. The
issuance of the SHARES has received approval from the
Company’s Board of Directors.
(b) In addition to all
other fees paid hereunder, Company shall also pay to, or on behalf
of, REDWOOD, promptly as billed, all reasonable fees, disbursements
and out-of-pocket expenses incurred by REDWOOD in connection the
Services, including, without limitation, the fees and disbursements
of REDWOOD’s counsel, travel and lodging expenses, messenger
and duplicating services, and other customary
expenditures.
(c)
The SHARES may not be sold or transferred unless (i) such
SHARES are sold pursuant to an
effective registration statement under the Act or (ii) the COMPANY
or its Transfer Agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to
the effect that the SHARES to
be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such SHARES are sold or transferred pursuant to
Rule 144 under the Act (or a successor rule) (“Rule
144”) Subject to the removal provisions set forth below,
until such time as the SHARES
issuable to REDWOOD have been registered under the Act or otherwise
may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be
immediately sold, each certificate for SHARES issuable under this Agreement that
have not been so included in an effective registration statement or
that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as
appropriate:
2
●
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 133, AS AMENDED (THE
“ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED HYPOTHECATED OR
OTHERWISE DISPOSED EXCEPT (I) UPON EFFECTIVE REGISTRATION OF THE
SECURITIES UNDER THE ACT AND OTHER APPLICALE SECURITIES LAWS
COVERING SUCH SECURITIES OR (II) UPON ACCEPTANCE BY THE COMPANY OF
AN OPINION OF COUNSEL IN SUCH FORM AND BY SUCH COUNSEL, OR OTHER
DOCUMENTATION, AS IS SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
●
The legend set
forth above shall be removed and the Company shall issue to REDWOOD
a new certificate therefore free of any transfer legend if (i) the
Company or its transfer agent shall have received an opinion of
counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public
sale or transfer of such SHARES may be made without registration
under the Act, which opinion shall be accepted by the Company so
that the sale or transfer is effected may be sold pursuant to Rule
144 without any restriction.
(d) All cash fees
payable to REDWOOD pursuant to this Section 3 shall be payable via
wire transfer to an account designated by REDWOOD.
(e) If at any time or
from time-to-time Company shall determine to register any of its
equity securities, either for its own account or for the account of
a security holder or holders, other than (i) a registration
relating solely to employee benefit plans; or, (ii) a registration
relating solely to a Rule 145 transaction, Company will promptly
give REDWOOD written notice thereof, and, include in such
registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, that
number of shares of common stock issued to REDWOOD under this
Agreement.
4. Independent
Contractor Relationship. REDWOOD’s relationship with
Company is that of an independent contractor, and nothing in this
Agreement is intended to, or shall be construed to, create a
partnership, agency, joint venture, employment, or similar
relationship. REDWOOD will not be entitled to any of the benefits
that Company may make available to its employees, including, but
not limited to, group health or life insurance, profit-sharing or
retirement benefits. REDWOOD is not authorized to make any
representation, contract, or commitment on behalf of Company unless
specifically requested or authorized in writing to do so by a
Company manager. REDWOOD is solely responsible for, and will file,
on a timely basis, all tax returns and payments required to be
filed with, or made to, any federal, state, or local tax authority
with respect to the performance of services and receipt of fees
under this Agreement. REDWOOD is solely responsible for, and must
maintain adequate records of, expenses incurred in the course of
performing services under this Agreement. No part of
REDWOOD’s compensation will be subject to withholding by
Company for the payment of any social security, federal, state or
any other employee payroll taxes.
5.
Information.
In connection with the Services, Company will furnish REDWOOD and
its designated agents with all materials and information regarding
the business and financial condition of Company and any company
identified as a potential acquisition target which Company believes
are relevant to the Services or which REDWOOD requests (all such
information is collectively referred to herein as the
“Information”). Company
recognizes and confirms that REDWOOD: (a) will use and rely solely
on the Information and on information available from generally
recognized public sources in performing the Services without having
independently verified the same; (b) is authorized, as
Company’s exclusive provider of the Services, to transmit to
any prospective participant in a proposed transaction envisioned
under the Services (a “Transaction”) copy or copies of
the Information and all other legal documentation necessary or
advisable in connection with the Services or a Transaction; and,
(c) does not assume responsibility for the accuracy or completeness
of the Information.
3
6. Accuracy of the
Information. Company
agrees that the Information will not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. Company shall advise REDWOOD
promptly of the occurrence of any event or any other change prior
to the closing of a Transaction which could reasonably be expected
to result in the Information containing any untrue statement of a
material fact or omitting to state any material fact necessary to
make the statements contained therein, in light of the
circumstances under which they were made, not
misleading.
7. Confidentiality.
7.5 Nondisclosure and
Nonuse Obligations.
Except as otherwise permitted in this Agreement, REDWOOD shall not
use, disseminate, or in any way disclose the Confidential
Information (as defined below). REDWOOD may use the Confidential
Information solely to perform the Services. REDWOOD shall treat all
Confidential Information with the same degree of care as REDWOOD
accords to REDWOOD’s own confidential information, but in no
case shall REDWOOD use less than reasonable care. REDWOOD shall
disclose Confidential Information only to those persons who have a
need to know such Confidential Information. REDWOOD certifies that
each such recipient will have agreed to be bound by terms and
conditions at least as protective as those terms and conditions
applicable to REDWOOD under this Agreement. REDWOOD shall
immediately give notice to Company of any unauthorized use or
disclosure of the Confidential Information. REDWOOD shall
reasonably assist Company in remedying any such unauthorized use or
disclosure of the Confidential Information. For purposes of this
Agreement “Confidential Information”
means (a) any technical and non- technical information related to
Company’s business and current, future, and proposed products
and services of Company, and Company’s information concerning
research, development, design details and specifications, financial
information, procurement requirements, engineering and
manufacturing information, customer lists, business forecasts,
sales information, and marketing plans; and, (b) any information
that may be made known to REDWOOD and that Company has received
from others that Company is obligated to treat as confidential or
proprietary.
7.6
Exclusions from
Nondisclosure and Nonuse Obligations. REDWOOD’s obligations under
Section 7.1 shall not apply to any Confidential Information that
REDWOOD can demonstrate (a) was in the public domain at or
subsequent to the time such Confidential Information was
communicated to REDWOOD by Company through no fault of REDWOOD; (b)
was rightfully in REDWOOD’s possession free of any obligation
of confidence at or subsequent to the time such Confidential
Information was communicated to REDWOOD by Company; or (c) was
developed by employees or agents of REDWOOD independently of and
without reference to any Confidential Information communicated to
REDWOOD by Company. A disclosure of any Confidential Information by
REDWOOD (i) in response to a valid order by a court or other
governmental body; or, (ii) as otherwise required by law shall not
be considered to be a breach of this Agreement or a waiver of
confidentiality for other purposes; provided, however, that REDWOOD
shall provide prompt prior written notice thereof to Company to
enable Company to seek a protective order or otherwise prevent such
disclosure.
7.7 Ownership and
Return of Confidential Information and Company
Property. All
Confidential Information and any materials (including, without
limitation, documents, drawings, papers, diskettes, tapes, models,
apparatus, sketches, designs and lists) furnished to REDWOOD by
Company, whether delivered to REDWOOD by Company or made by REDWOOD
in the performance of services under this Agreement and whether or
not they contain or disclose Confidential Information
(collectively, the “Company Property”), are
the sole and exclusive property of Company or Company’s
suppliers or customers. Within ten (10) business days after any
request by Company, REDWOOD shall destroy or deliver to Company, at
Company’s option, (a) all Company Property; and, (b) all
materials in REDWOOD’s possession or control that contain or
disclose any Confidential Information. REDWOOD will provide Company
a written certification of REDWOOD’s compliance with
REDWOOD’s obligations under this Section 7.3.
8. Non-Circumvention.
At no time shall Company directly or indirectly call on, engage,
contract with, bargain with, agree to agree, solicit, or attempt to
do any of the foregoing, in any manner, for any reason, any
person
or their respective principals introduced to Company by REDWOOD.
Specifically, Company shall not, under any circumstance, without
the prior, express written agreement of REDWOOD, directly or
indirectly circumvent, bypass, or otherwise deny, limit, evade,
equivocate, or reduce the interest, profit, share, or participation
of REDWOOD in any proposed transaction related to the
Services.
4
9. Indemnity;
Limitation of Liability. Since REDWOOD will be acting on behalf
of Company as set forth in this Agreement, and as an integral part
of the consideration of the Services to be rendered hereunder,
Company shall indemnify REDWOOD and its shareholder, directors,
officers, attorneys, employees, and authorized agents
(collectively, the “Indemnified Persons”) in
accordance with Exhibit “B”, attached hereto and
incorporated herein by reference. Company shall not and shall cause
its affiliates and their respective directors, officers, managers,
members, employees, shareholders and agents not to, initiate any
action or proceeding against REDWOOD or any other Indemnified
Person in connection with this Agreement or the Services unless
such action or proceeding is based solely upon the gross negligence
or willful misconduct of REDWOOD or any such Indemnified Person.
REDWOOD and the Indemnified Persons shall not be deemed agents or
fiduciaries of Company or its stockholders, and will not have the
authority to legally bind Company. REDWOOD will not make an
appraisal or valuation of any assets or liabilities of Company in
connection with the Services hereunder.
10. Representations of
Company. Company
hereby represents and warrants as follows: (i) it has all requisite
power and authority to enter into this Agreement; (ii) this
Agreement has been duly and validly authorized by all necessary
action on the part of Company; and, (iii) this Agreement has been
duly executed and delivered by Company and constitutes a legal,
valid, and binding agreement, enforceable in accordance with its
terms.
11. General
Provisions.
11.5 Press
Announcements. At any
time after the consummation or other public announcement of any
transaction resulting from the Services, REDWOOD may place an
announcement in such newspapers, publications, and on its website
and marketing materials as it may choose, stating that REDWOOD has
acted as set forth herein in connection with the transaction, and
may use, from time-to-time, Company’s name and logo and a
brief description of the transaction in publications and/or
marketing materials prepared and/or distributed by
REDWOOD.
11.6 Executed
Counterparts. This
Agreement may be executed in any number of counterparts, all of
which when taken together shall be considered one and the same
agreement, it being understood that all Parties need not sign the
same counterpart. In the event that any signature is delivered by
Fax or by E-Mail, such signature shall create a valid and binding
obligation of that Party (or on whose behalf such signature is
executed) with the same force and effect as an original thereof.
Any photographic, photocopy, or similar reproduction copy of this
Agreement, with all signatures reproduced on one or more sets of
signature pages, shall be considered for all purposes as if it were
an executed counterpart of this Agreement.
11.7 Successors and
Assigns. Except as
expressly provided in this Agreement, each and all of the
covenants, terms, provisions, conditions, and agreements herein
contained shall be binding upon and shall inure to the benefit of
the successors and assigns of the Parties hereto.
11.8
Governing
Law. This Agreement
shall be governed by the laws of the State of California, without
giving effect to any choice or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other
than California. If any court action is necessary to enforce the
terms and conditions of this Agreement, the Parties hereby agree
that the Superior Court of California, County of Orange, shall be
the sole jurisdiction and venue for the bringing of such
action.
11.9
Enforcement.
The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
Accordingly, it is agreed that the Parties shall be entitled to
seek an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of
this Agreement, this being in addition to any other remedy to which
they are entitled at law or in equity. The remedies of the Parties
under this Agreement are cumulative and shall not exclude any other
remedies to which any person may be lawfully entitled.
5
11.10 Recovery of Fees by
Prevailing Party. In
the event of any legal action (including arbitration) to enforce or
interpret the provisions of this Agreement, the non-prevailing
Party shall pay the reasonable attorneys’ fees and other
costs and expenses including expert witness fees of the prevailing
Party in such amount as the court shall determine. In addition,
such non-prevailing Party shall pay reasonable attorneys’
fees incurred by the prevailing Party in enforcing, or on appeal
from, a judgment in favor of the prevailing Party. The preceding
sentence is intended by the Parties to be severable from the other
provisions of this Agreement and to survive and not be merged into
such judgment.
11.11
Entire
Agreement. This
Agreement, and all references, documents, or instruments referred
to herein, contains the entire agreement and understanding of the
Parties in respect to the subject matter contained herein. The
Parties have expressly not relied upon any promises,
representations, warranties, agreements, covenants, or
undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes (i)
any and
all prior written or oral agreements, understandings, and
negotiations between the Parties with respect to the subject matter
contained herein; and, (ii) any course of performance and/or usage
of the trade inconsistent with any of the terms
hereof.
11.12
Severability.
Each and every provision of this Agreement is severable and
independent of any other term or provision of this Agreement. If
any term or provision hereof is held void or invalid for any reason
by a court of competent jurisdiction, such invalidity shall not
affect the remainder of this Agreement.
11.13
Amendment.
This Agreement may be amended or modified only by a writing signed
by all Parties.
11.14 Notices.
11.14.1 Method
and Delivery. All notices, requests and demands
hereunder shall be in writing and delivered by hand, by Electronic
Transmission, by mail, by telegram, or by recognized commercial
over-night delivery service (such as Federal Express, UPS, or DHL),
and shall be deemed given (a) if by hand delivery, upon such
delivery; (b) if by Electronic Transmission, upon telephone
confirmation of receipt of same; (c) if by mail, forty-eight (48)
hours after deposit in the United States mail, first class,
registered or certified mail, postage prepaid; (d) if by telegram,
upon telephone confirmation of receipt of same; or, (e) if by
recognized commercial over-night delivery service, upon such
delivery.
11.14.2 Consent to Electronic
Transmissions. Each Party hereby expressly consents
to the use of Electronic Transmissions for communications and
notices under this Agreement. For purposes of this Agreement,
“Electronic
Transmissions” means a communication (i) delivered by
facsimile telecommunication or electronic mail when directed to the
facsimile number or electronic mail address, respectively, for that
recipient on record with the sending Party; and, (ii) that creates
a record that is capable of retention, retrieval, and review, and
that may thereafter be rendered into clearly legible tangible
form.
11.14.3 Address Changes. Any Party may
alter the Fax number, E-Mail address, physical address, or postage
address to which communications or copies are to be sent by giving
notice of such change of address to the other Parties in accordance
with the provisions of this Section 11.10.
11.15
Disputes.
The Parties agree to cooperate and meet in order to resolve any
disputes or controversies arising under this Agreement. Should they
be unable to do so, then either may elect arbitration under the
rules of the American Arbitration Association, and both Parties are
obligated to proceed thereunder. Arbitration shall proceed in
Orange County, and the Parties agree to be bound by the
arbitrator’s award, which may be filed in the Superior Court
of California, County of Orange. The Parties consent to the
jurisdiction of California Courts for enforcement of this
determination by arbitration. The prevailing Party shall be
entitled to reimbursement for his attorney’s fees and all
costs associated with arbitration. In any arbitration proceeding
conducted pursuant to the provisions of this Section, both Parties
shall have the right to conduct discovery, to call witnesses and to
cross- examine the opposing Party’s witnesses, either through
legal counsel, expert witnesses or both, and the provisions of the
California Code of Civil Procedure (Right to Discovery; Procedure
and Enforcement) are hereby incorporated into this Agreement by
this reference and made a part hereof. EACH PARTY HEREBY WAIVES
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTER CLAIM BROUGHT BY
ANY OF THEMAGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION
HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN.
6
11.16
Provision Not
Construed Against Party Drafting Agreement. This Agreement is the result of
negotiations by and between the Parties, and each Party has had the
opportunity to be represented by independent legal counsel of its
choice. This Agreement is the product of the work and efforts of
all Parties, and shall be deemed to have been drafted by all
Parties. In the event of a dispute, no Party hereto shall be
entitled to claim that any provision should be construed against
any other Party by reason of the fact that it was drafted by one
particular Party.
11.17
Best
Efforts. The Parties
shall use and exercise their best efforts, taking all reasonable,
ordinary and necessary measures to ensure an orderly and smooth
relationship under this Agreement, and further agree to work
together and negotiate in good faith to resolve any differences or
problems which may arise in the future.
12. Execution.
IN WITNESS WHEREOF, this SERVICES AGREEMENT has been duly
executed by the Parties in Orange County, California, and shall be
effective as of and on the Effective Date. Each of the undersigned
Parties hereby represents and warrants that it (i) has the
requisite power and authority to enter into and carry out the terms
and conditions of this Agreement, as well as all transactions
contemplated hereunder; and, (ii) it is duly
authorized and empowered to execute and deliver this
Agreement.
|
COMPANY:
|
REDWOOD:
|
|
|
|
|
VISUALANT, INC.
|
REDWOOD INVESTMENT GROUP, LLC
|
|
a Nevada Corporation
|
a California Corporation
|
|
|
|
|
|
|
|
BY: /s/ Xxx Xxxxxxxx
|
BY: /s/ Xxxxxx Xxxxxxxxx
|
|
|
|
|
NAME: Xxx Xxxxxxxx
|
NAME: Xxxxxx Xxxxxxxxx
|
|
|
|
|
TITLE: CEO
|
TITLE: CEO
|
|
|
|
|
DATED: September 15, 2016
|
DATED: September 15, 2016
|
7
EXHIBIT
“A”
SERVICES
REDWOOD
shall serve as the non exclusive advisor to Company with regard to
corporate finance and capital raising activities, merger and
acquisition transactions, and other related endeavors. The Services
shall include, though not be limited to, the
following:
Advisor
to Company in connection with a potential purchase of any other
company or assets through any structure or form of transaction
including, but not limited to, a direct or indirect acquisition,
purchase of assets, merger, consolidation, restructuring, transfer
of securities or any similar or related transaction.
Advisor
to Company in connection with the provision of any financing
transaction. Advisor to Company in connection with Company’s
management and positioning. In connection with the Services,
provide from time-to-time and as appropriate:
●
One-on-Ones
with key banking and/or investment fund contacts
●
Consult
and advise on reverse split shares
●
Deal
and non-deal roadshows
●
Advise
on Financing, PO-Invoice and corporate financing
●
Market
recommendations and clean up
●
New
Shareholder introductions
●
Corporate
Governance
●
Management
and BOD recommendations
●
Key
business introductions.
●
Identification
of potential investors for any offering of securities
●
Media
Coverage
●
Analyst
Coverage
●
Up
listing assistance to either NASDAQ or NYSE.
●
Assist
in investor and public awareness
●
Consulting
with Company’s management regarding structuring of capital
formation programs
●
Review
and advise on corporate capitalization table and company
focus
A-1
EXHIBIT
“B”
INDEMNIFICATION
Unless
otherwise noted, all capitalized terms used herein shall have the
same meanings as set forth in the Agreement. In furtherance of
Section 9 of the Agreement, the Parties hereby agree as
follows:
As part
of the consideration for REDWOOD to furnish the Services Company
agrees to indemnify and hold harmless REDWOOD and the Indemnified
Persons to the fullest extent from and against all claims,
liabilities, losses, damages and expenses (or actions in respect
thereof), as incurred, related to or arising out of or in
connection with (i) actions taken or omitted to be taken by
Company, its affiliates, employees or agents; (ii) actions taken or
omitted to be taken by any Indemnified Person (including acts or
omissions constituting ordinary negligence) pursuant to the terms
of, or in connection with the Services or any Indemnified
Person’s role in connection therewith, provided, however,
that Company shall not be responsible for any losses, claims,
damages, liabilities or expenses of any Indemnified Person to the
extent, and only to the extent, that it is finally judicially
determined that they are due solely to such Indemnified
Person’s gross negligence or willful misconduct; and/or,
(iii) any untrue statement or alleged untrue statement of a
material fact contained in any of the Information, or arising out
of or based upon any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
Company
shall not settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in which any
Indemnified Person is or could be a party and as to which
indemnification or contribution could have been sought by such
Indemnified Person hereunder (whether or not such Indemnified
Person is a party thereto), unless such Indemnified Person has
given its prior written consent or the settlement, compromise,
consent or termination includes an express unconditional release of
such Indemnified Person, satisfactory in form and substance to such
Indemnified Person, from all losses, claims, damages or liabilities
arising out of such action, claim, suit or proceeding.
If for
any reason (other than the gross negligence or willful misconduct
of an Indemnified Person as provided above) the foregoing indemnity
is unavailable to an Indemnified Person or insufficient to hold an
Indemnified Person harmless, then Company, to the fullest extent
permitted by law, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such claims, liabilities,
losses, damages or expenses in such proportion as is appropriate to
reflect the relative benefits received by Company on the one hand
and by REDWOOD on the other, from the proposed transaction under
the Agreement or, if allocation on that basis is not permitted
under applicable law, in such proportion as is appropriate to
reflect not only the relative benefits received by Company on the
one hand and REDWOOD on the other, but also the relative fault of
Company and REDWOOD, as well as any relevant equitable
considerations. Notwithstanding the provisions hereof, the
aggregate contribution of all Indemnified Persons to all claims,
liabilities, losses, damages, and expenses shall not exceed the
amount of fees actually received by REDWOOD pursuant to the
Agreement. It is hereby further agreed that the relative benefits
to the Company on the one hand and REDWOOD on the other with
respect to any proposed transaction contemplated by the Agreement
shall be deemed to be in the same proportion as (i) the total value
paid or contemplated to be paid or received or contemplated to be
received by Company or the Company’s shareholders, as the
case may be, in the transaction or transactions that are within the
scope of the Agreement, whether or not any such transaction is
consummated, bears to (ii) the fees actually paid to REDWOOD with
respect to such transaction. The relative fault of Company on the
one hand and REDWOOD on the other with respect to the transaction
shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by Company or by REDWOOD and the
Parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission.
No
Indemnified Person shall have any liability to Company or any
officer, director, employee or affiliate thereof in connection with
the Services except for any liability for claims, liabilities,
losses, or damages finally judicially determined to have resulted
solely as a result of such Indemnified Person’s gross
negligence or willful misconduct. In no event shall any Indemnified
Person be responsible for any special, indirect, punitive, or
consequential damages. In addition, Company agrees to reimburse the
Indemnified Persons for all expenses (including, without
limitation, fees and expenses of counsel) as they are incurred in
connection with investigating, preparing,
defending or settling any action or claim for which indemnification
or contribution may be sought by the Indemnified Person, whether or
not in connection with litigation in which any Indemnified Person
is a named party.
B-1
The
indemnity, contribution, and expense reimbursement obligations set
forth herein (i) shall be in addition to any liability Company may
have to any Indemnified Person at common law or otherwise; (ii)
shall survive the expiration of the Term; (iii) shall apply to any
modification of REDWOOD’s engagement and shall remain in full
force and effect following the completion or termination of the
Agreement; (iv) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of REDWOOD or
any other Indemnified Person; and, (v) shall be binding on any
successor or assign of Company and successors or assigns to
Company’s business and assets.
B-2
