Exhibit 10.34
MANCHESTER COMPANIES, INC.
ENGAGEMENT LETTER
THIS AGREEMENT (the "Agreement" dated as of May 7, 2004 between Redline
Performance Products, Inc., located at 0000 Xxxxxxx Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, XX 00000 (the "Company" or "Redline") and Manchester Companies, Inc.
("MCI") appoints MCI as an operational and financial advisor ("Advisor") to
Redline. MCI acknowledges that Redline is a development stage company engaged in
the design, manufacture, and marketing of snowmobiles under the Redline brand
name. MCI understands that the Company is in need of operational and financial
advisory services. In connection with the foregoing, the Company and MCI agree
that:
1. SCOPE. The scope of MCI's services ("Services") will be to:
- Provide operational and financial review and assessment of the
issues currently facing the Company
- MCI will present its findings to the Board of Directors of
Redline, including a remediation plan to address the current
issues facing the Company
- Assist the Company as it implements the remediation plan
- Assist the Company's financial advisors as needed relating to
additional potential financing
- Coordinate and provide direction to the professional team
assisting the Company. The professional team may include, but
is not limited to, management of Redline, MCI employees, legal
counsel, and public relations professionals
2. RETENTION/TERMINATION. MCI will act as the Company's Advisor from
the date of this Agreement and for a period of thirty (30) days
thereafter, during which time neither party may terminate this
Agreement except for the failure by MCI to provide, using reasonable
business practices, the Services described herein. After the initial
thirty day period, this Agreement will continue on a month-to-month
basis at a fee to be mutually determined by the parties until either
party, upon at least fifteen (15) days prior written notice to the
other, terminates this Agreement.
3. SERVICES. Applying reasonable business efforts, MCI will provide
Redline with the Services outlined herein. MCI is not authorized to
make any agreements or commitments for the Company without its
written consent.
4. ADDITIONAL TERMS OF RETENTION. Notwithstanding any other provision
of this Agreement, MCI is solely an independent contractor of and a
consultant to Redline.
Furthermore, MCI does not provide legal advice and Company agrees to
rely upon advice from its own legal counsel as to all legal matters.
Redline acknowledges it is entering into
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this Engagement Agreement without any promises or representations by
MCI or any third party as to actual results that will be achieved by
MCI.
5. FEES; EXPENSES.
a. For providing the professional services described herein, MCI
shall be paid professional fees of fifty thousand dollars
($50,000) as follows:
- Thirty thousand dollars ($30,000), payable in cash, upon
execution of this Agreement, and
- Twenty thousand dollars ($20,000) payable in cash twenty
(20) days following execution of this Agreement;
- Fees for subsequent thirty (30) day periods will be
mutually determined by MCI and the Company and billed
monthly and due upon receipt.
b. Expenses - Redline agrees to, on an as-incurred basis, as
documented by MCI, to reimburse MCI for all reasonable
out-of-pocket expenses incurred in connection with the
rendering of the Services described herein. MCI will submit
expense reimbursement bills on a monthly basis and Redline
agrees that they will be paid within 10.
c. Expenses not included - MCI's fees do not include any fees
which may be charged by other related or non-related entities
involved in pursuit of the execution of the Services outlined
herein. Such other fees may include, but are not limited to,
those charged by Bankers, legal counsel, auditors and tax
advisors, appraisal companies, environmental testing concerns,
lenders, industry consultants and other consultants or
professionals as may be mutually determined to be necessary.
6. COOPERATION. Redline will cooperate with MCI and provide, where
possible, financial and other information reasonably requested by
MCI on a timely basis and make available its management and advisors
for the purpose of rendering its services pursuant to this
Agreement.
7. CONFIDENTIALITY.
a. Any information received by the parties and clearly identified
as confidential, will be treated by Redline and MCI as
confidential except as required by law. MCI will also treat as
confidential the contemplated plans and strategies of Redline.
Neither Redline nor MCI will, unless required by a statute,
rule, regulation, agency or court, make any public or private
statements about Redline's contemplated plans and strategies,
without the prior written consent of the other parties to this
Agreement.
b. Without limiting the generality of Section 7, any advice
rendered by MCI pursuant to this Agreement may not, unless
required by statute, rule, regulation, agency or court, be
disclosed publicly or privately in any matter without MCI's
prior written approval and will be treated as confidential.
c. With respect to information about the business provided by
Redline and clearly identified as or communicated under
circumstances so as to be reasonably understood to be
confidential, MCI agrees that, for a period of three (3) years
from the date of this Agreement, such information will be kept
confidential by it and that access to such information will be
limited to those persons who have a need to know the
information. MCI further agrees that such information shall be
deemed to be the property of
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Redline and, when in tangible form, shall be returned to
Redline upon request. Redline information shall be used only
for purposes expressed herein and may be used for other
purposes only with the prior written approval of Redline. MCI
also agrees to keep confidential in accordance herewith any
analysis, compilation, study, or other documents prepared by
MCI for use in connection with the above-mentioned Services.
Notwithstanding any other provision of this Agreement, MCI's
use and disclosure of Redline's confidential information
related to its intellectual property may be further restricted
to the extent of, and MCI agrees to become bound by, any more
restrictive terms of any Agreement with any third party(ies)
regarding Redline's sale or licensing of such intellectual
property.
d. For the purpose of this section, the phrase "confidential
information" does not include information which (i) is or
becomes available to the public other than as a result of a
disclosure in violation of the terms hereof; (ii) was in the
possession of a respective party on a non-confidential basis
prior to its disclosure under this Agreement; or (iii) becomes
available on a non-confidential basis from a source other than
a party hereto or its respective representative.
8. INDEMNIFICATION. If, in connection with any Services or matters that
are the subject of this Agreement, MCI or any of its directors,
officers, employees or agents becomes involved in any capacity in
any action or legal proceeding, pending or threatened, Redline
agrees (i) to reimburse MCI or any of its directors, officers,
employees or agents for the reasonable legal fees, disbursements of
counsel and other expenses including the cost of investigation and
preparation incurred by MCI or any of its directors, officers,
employees or agents as such fees, disbursements and other expenses
are incurred; and (ii) to indemnify, defend, and hold MCI or any of
its directors, officers, employees or agents harmless against any
losses, claims, damages, or liabilities, joint or several, to which
MDI or any of its directors, officers, employees or agents may
become subject arising out of any such action or legal proceeding.
Notwithstanding the foregoing, Redline shall not be required to
indemnify, defend or hold MCI or any of its directors, officers,
employees or agents harmless against any losses, claims, damages, or
liabilities to the extent such action or legal proceedings is a
result of the gross negligence, willful misconduct, bad faith or
self-dealing of MCI or any of its directors, officers, employees or
agents as determined by a judicial proceeding.
9. SURVIVAL. The provisions of this Agreement shall, where applicable,
survive the expiration of the period of this Agreement, including
any extensions thereof. Without limiting the foregoing, Sections 5,
8 and 10 shall survive the termination of this Agreement.
10. ADVERTISING. The Company authorizes MCI to utilize its name, logo,
and a description of services provided by the Company for MCI
promotional purposes in a "tombstone" or other promotional material,
including, but not limited to, materials included in brochures,
advertisements, MCI website(s), and collateral materials for use in
MCI's sales and marketing activities. MCI agrees not to disclose the
proceeds received from the Company in such advertisements.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
among the parties hereto with respect to the subject matter hereof
and supersedes and cancels as of the date hereof all prior
understandings, written or oral, with respect to the subject matter
hereof.
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12. GOVERNING LAW. This Agreement and the agreements contained herein
shall be governed by, and construed in accordance with, the laws of
the State of Minnesota, without giving effect to the principles of
conflicts of law thereof.
13. MISCELLANEOUS. Facsimile copies of this Agreement, signed in
counterpart, shall be considered for all purposes, including
delivery, as originals.
14. ENGAGEMENT DATE. MCI is prepared to begin the proposed engagement
immediately, pending the execution of this Engagement Agreement and
upon receipt of the first payment of $30,000.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MANCHESTER COMPANIES, INC. REDLINE PERFORMANCE PRODUCTS, INC.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx Xxxxx
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By: Xxxxx X. Xxxxxxx By: Xxxx Xxxxx
Its: Business Manager Its: President and CFO
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