[Signature Page Follows]

 

5. Information Provided to Enclave.  The Company will furnish to Enclave, on a timely basis, all relevant information in its possession reasonably required by Enclave to perform its services under the terms of this Agreement, including information with respect to the Company’s future prospects and financial projections and the assumptions used in the development of such projections of the Company. The Company will permit Enclave to interview the management of, the auditors for, and the consultants and advisors to, the Company as Enclave may determine to be necessary or appropriate under the circumstances.  We agree that all ma terial non-public information obtained by us in connection with our engagement will be held by us in strict confidence and will be used by us solely for the purpose of providing services relating to our engagement; provided that we will share such information with our legal, accounting and other advisors to the extent necessary to assist us in assessing such information and will be responsible for any disclosure of any such information made by any such advisors. If any time during the course of our engagement the Company becomes aware of any material change in any of the information previously furnished to us, or that such information is untrue, incorrect or incomplete in any material respect or omits to state any material facts, it will promptly advise us of such change or circumstance.

 

6. Indemnity and Contribution.  The parties agree to the terms of Enclave’s indemnification agreement, which is attached hereto as Appendix A and incorporated herein by reference.

 

7. Successors and Assigns.  This Agreement and all obligations and benefits to the parties hereto shall bind and shall inure to their benefit and that of their respective successors and assigns.  The indemnity and contribution provisions incorporated into this Agreement are for the express benefit of the officers, directors, employees, consultants, agents and controlling persons of Enclave and their respective successors and assigns.

 

8. Notices. Any notice, request, demand or other communication required or permitted hereunder shall be in writing and shall be deemed to have been given if delivered by hand, upon receipt, if sent by registered or certified mail or by private overnight courier or delivery in person, upon the date on which receipt is acknowledged, or if sent by verifiable facsimile transmission, upon verification of transmission thereof,  (a) if to the Company, at the address set forth above, and (b) if to Enclave, at 708 Third Avenue, 19th Floor, New York, NY 10017, or to such other address as either party shall have specified to the other party in writing; provided, however, that if any such delivery is made after 5 p.m., New York time, on a business day, or on a day that is not a business day, such notice shall be deemed delivered on the next succeeding business day.

 

9. Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed and performed entirely within such State.

 

10. Arbitration. The Company and Enclave agree and consent to the exclusive jurisdiction of any federal or state court within the State and County of New York for the adjudication of any dispute hereunder, and that the prevailing party shall be entitled to reimbursement of legal fees and expenses.

 

11. General Provisions.  No purported waiver, amendment or modification of any of the terms of this Agreement will be valid unless made in writing and executed by both parties hereto.  Section headings used in this Agreement are for convenience only, are not a part of this Agreement and will not be used in construing any of the terms hereof.  This Agreement constitutes and embodies the entire understanding and agreement of the parties hereto relating to the subject matter hereof, and there are no other agreements or understandings, written or oral,  in effect between the parties relating to the subject matter her eof.  No representation, promise, inducement or statement of intention has been made by either of the parties hereto which is to be embodied in this Agreement, and none of the parties hereto shall be bound by or liable for any alleged representation, promise, inducement or statement of intention, not so set forth herein.  No provision of this Agreement shall be construed in favor of or against either of the parties hereto by reason of the extent to which either of the parties or its counsel participated in the drafting hereof.  If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the remaining provisions hereof shall in no way be affected and shall remain in full force and effect.  The laws of the State of New York relating to contracts made in, and to be performed entirely in, such state shall govern the validity and the interpretation of this Agreement.  This Agreement may be executed in an y number of counterparts and be delivered by verifiable facsimile or electronic delivery of a PDF file.

 

12. Patriot Act.  Enclave hereby notifies the Company that, pursuant to the requirements of the USA PATRIOT Act (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Company in a manner that satisfies the requirements of the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act.

 

 

 

 

 

 

 

 

 

Please sign below and return to Enclave to indicate your acceptance of the terms set forth herein, whereupon this Agreement shall constitute a binding agreement between the Company and Enclave as of the date first written above.

 

 

 

 

The Company agrees to indemnify and hold harmless Enclave and its officers, directors, employees, consultants, attorneys, agents, affiliates and controlling persons (within the meaning of Section 20 of the Securities Exchange Act of 1934, as amended) (Enclave and each such other person are collectively and individually referred to below as an “Indemnified Party”) from and against any and all loss, claim, damage, liability and expense whatsoever, as incurred, including, without limitation, reasonable costs of any investigation, legal and other fees and expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted, to which the Indemnified Party may become subject un der any applicable federal or state law (whether in tort, contract or on any other basis) or otherwise, (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any written or oral communication provided by or on behalf of the Company to any actual or prospective purchaser of the securities or arising out of or based upon the omission of alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) related to the performance by the Indemnified Party of the services contemplated by this Agreement (including, without limitation, the offer and sale of the securities) and will reimburse the Indemnified Party for all expenses (including reasonable legal fees and expenses) incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceedi ng arising therefrom, whether or not the Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by the Company.  The Company will not be liable under clause (ii) of the foregoing indemnification provision to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court or arbitrator, not subject to appeal or further appeal, to have resulted directly from Enclave’s or the Indemnified Party’s willful misconduct or gross negligence. The Company also agrees that the Indemnified Party shall have no liability (whether direct or indirect, or in contract, tort or otherwise) to the Company related to, or arising out of, the engagement of the Indemnified Party pursuant to, or the performance by the Indemnified Party of the services contemplated by, this Agreement except to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court or arbitrator, not subject to appea l or further appeal, to have resulted directly from the Indemnified Party’s willful misconduct or gross negligence.

If the indemnity provided above shall be unenforceable or unavailable for any reason whatsoever, the Company, its successors and assigns, and the Indemnified Party shall contribute all such losses, claims, damages, liabilities and expenses (including, without limitation, all costs of any investigation, legal or other fees and expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted) (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Enclave under the terms of this Agreement or (ii) if the allocation provided for by clause (i) of this sentence is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i), but also the r elative fault of the Company and Enclave in connection to the matter(s) as to which contribution is to be made. The relative benefits received by the Company and Enclave shall be deemed to be in the same proportion as the fee paid to Enclave bears to the total value of the consideration paid or to be paid to the Company and/or its affiliates in the Debt Financing.  The relative fault of the Company and Enclave shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by Enclave and the Company’s and Enclave’s relative intent, knowledge, access to information and opportunity to correct such statement or omission.  The Company and Enclave agree that it would not be just or equitable if contribution pursuant to this paragraph were determined by a pro rata allocation or by any other method of allocation which does not take into account these equitable considerations.  Notwithstanding the foregoing, to the extent permitted by law, in no event shall the Indemnified Party’s

share of such losses, claims, damages, liabilities or expenses exceed, in aggregate, the fee actually paid to the Enclave by the Company. The Company further agrees that, without Enclave’s prior written consent, which consent will not be unreasonably withheld, it will not enter into any settlement of a lawsuit, claim or other proceeding arising out of the transactions contemplated by this Agreement unless such settlement includes an explicit and unconditional release of the Indemnified Party or Parties from the party bringing such lawsuit, claim or other proceeding.

The Indemnified Party will give prompt written notice to the Company of any claim for which it seeks indemnification hereunder, but the omission so to notify the Company will not relieve the Company from (i) any liability which it may have under this Appendix B except to the extent that the Company is materially damaged or prejudiced by such omission or (ii) any liability it may have other than under this Appendix B.  The Company shall have the right to assume the defense of any claim, lawsuit or action (collectively an “action”) for which the Indemnified Party seeks indemnification hereunder, subject to the provisions stated herein with counsel reasonably satisfactory to the Indemnified Party. After notice from the Compa ny to the Indemnified Party of its election so to assume the defense thereof, and so long as the Company performs its obligations pursuant to such election, the Company will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation.  The Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof at its own expense; provided, however, that the reasonable fees and expenses of such counsel shall be at the expense of the Company if (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) the Indemnified Party shall have rea sonably concluded, based on advice of counsel, that there may be legal defenses which may be available to the Company, in which event the Company shall not have the right to assume the defense of such action on behalf of the Indemnified Party, it being understood, however, that the Company shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all Indemnified Parties in each jurisdiction in which counsel is needed.  Despite the foregoing, the Indemnified Party shall not settle any claim without the prior written approval of the Company, which approval shall not be unreasonably withheld, so long as the Company is not in material breach of this Appendix B.  In addition to the Company’s other obligations hereunder and without limitation, the Company agrees to pay monthly, upon receipt of itemized statements therefore, all reasonable fees and expenses of counsel incurred by an Indemnified Party in defending any claim of the type set fort h in the preceding paragraphs or in producing documents, assisting in answering any interrogatories, giving and deposition testimony or otherwise becoming involved in any action or response to any claim relating to the engagement referred to herein, or any of the matters enumerated in the preceding paragraphs, whether or not any claim is made against an Indemnified Party or an  Indemnified Party is named as a party to such action.

 

 

 

Potential Investors Agreed to in Advance by Enclave and the Company

1.	Cranshire Capital – Keith Goodman, Portfolio Manager

2.	Seaside 88, L.P.