Exhibit 10.13
CONFIDENTIAL
February 7, 2005
Dear Xx. Xxx:
The purpose of this letter is to describe the terms upon which Xxxxxxx
Xxxxxxx and Partners (CEandP) has agreed to introduce Millenium Holding Group,
Inc. and its affiliates (the "Company") to certain potential investors (each, a
"Referral"). CEandP and the Company shall maintain a list of Referrals (Exhibit
A), which shall be mutually approved by CEandP and the Company and updated from
time to time. Accepted referrals will be evidenced by the initial of an officer
of the Company next to each submission. The purpose of the introduction is to
permit the Company to consider a possible financial transaction ("Financing")
with the Referral.
This agreement confirms that the Company and their respective
representatives, members, agents, associates, employees, consultants, companies,
subsidiaries, businesses and/or entities (collectively, "Representatives"),
hereby agree that they will not directly or indirectly circumvent payment of any
fees, or attempt circumvention or otherwise engage in any transaction with any
Referral introduced by CEandP without the payment of the fees set forth in this
agreement. This agreement confirms our understanding that the Company shall be
responsible for the payment of fees to CEandP in the event the Company receives
funding, through the direct or indirect efforts of CEandP within two years after
the date hereof (the "Effective Date"), from a Referral or affiliate of Referral
or party introduced to the Company formally by Referral.
If, within the two year period commencing on the Effective Date, the
Referral, affiliate, subsidiary, division, or business unit of Referral or party
introduced to the Company formally by Referral singly or with others, provides
Financing to the Company or otherwise makes an investment in the Company whereby
the Company receives funds from Referral (other than an open market purchase of
publicly traded Company Securities), CEandP will be paid at the time of the
closing of such transaction:
1. Upon execution of this Agreement, MNHG shall issue to Xxxxx Xxxxxxx
25,000 shares of MNHG (restricted shares) common stock, $.05 par value
per share (the "MNHG Common Stock"). The Shares to be issued shall be
subject to the restrictions pursuant to Rule 144 of the Securities Act
of 1933 and will have "piggy back" rights of registration.
2. A cash referral fee equal to three percent (3%) of the Financing gross
proceeds advanced to the Company shall be paid to CEandP;
3. Immediately upon closing of the Financing to the Company, three
percent (3%) of the gross proceeds disbursed ("Tranche") shall be paid
to CEandP; consequently, the Company shall pay CEandP three percent
(3%) of all follow-on cash disbursements related to the Financing,
immediately upon the Company's realization of each additional Tranche;
and
4. All expenses associated with this transaction are included in the 3.0%
Referral Fee.
The Referrals introduced to the Company will be listed on an Addendum A (as
attached), which will be updated as additional Referrals are introduced to the
Company. The Company and CEandP must mutually agree upon all parties listed on
Addendum A. Such consideration paid in cash shall be paid directly to CEandP
immediately following the closing.
The Company further agrees that if at any time within two years from the
Effective Date, the Company enters into or consummates additional follow-on
funding, any merger or other business combination, or any private acquisition or
private sale of 25% or more of the stock or assets of such selling entity (each
a "Sale Transaction") with an identified CEandP Referral or affiliate of
Referral or party introduced to the Company formally by Referral, the Company
will pay to CEandP a fee equal to two percent (2%) of the "total consideration"
paid to or received by the Company and its shareholders from Referral, whichever
is larger, in such Sale Transaction, such fee to be paid at the closing of the
transaction to which it relates in the same manner, kind and proportion as the
consideration paid in such transaction. For purposes hereof, "total
consideration" shall include, but not be limited to, cash, the face or fair
market value of any debt or equity securities issued, any long term debt assumed
or paid off, and any severance, non-compete or other payments in excess of
standard amounts.
The Company understands that CEandP is providing services as a finder and
is not providing investment banking advisory or financing services. CEandP
disclaims any responsibility for accurately describing or recommending any
transaction that the Company may engage in. CEandP's obligation with respect to
any transaction is solely as described herein and the Company agrees that it
shall not make any representation that CEandP endorses or sponsors the Company
or its securities, has performed any due diligence with respect to the Company
or has participated in any way in pricing securities or structuring any
transaction. The Company agrees that no reference to CEandP will be made in any
press release or advertisement of any transaction with the Referral without the
express approval, in writing, of such release or advertisement by Xx. Xxxxx X.
Xxxxxxx or Xxxxxxx Xxxxxxx except as may be required by law or regulatory
authority or whose consent cannot be unreasonably withheld.
The Company further agrees to indemnify CEandP from any liability, claim,
damage, expense (including reasonable legal fees) arising from or related to (i)
any transaction, whether or not consummated, with the Referral or (ii) any
breach of the representations in the immediately preceding paragraph, in this
connection, the Company agrees to pay such liabilities, claims, damages or
expenses as incurred. Indemnification shall remain operative and in full force
and effect and survive the termination of the engagement.
This Agreement shall be construed according to the laws of the State of
Nevada and subject to the jurisdiction of the courts of said state, without
application of the principles of conflicts of laws. If any litigation,
arbitration, or other dispute resolution arising out of or relating to this
Agreement, the prevailing party shall be reimbursed by the other party (as
determined by a court of competent jurisdiction) for reasonable attorneys' fees
and/or arbitration costs.
This agreement shall become effective with the execution hereof, and shall
expire in a period of two years unless renewed in writing by both parties,
notwithstanding the protective provisions regarding Referrals described above
which would survive this agreement.
This Agreement may be executed in any number of counterparts each of which
shall be enforceable against the parties executing such counterparts, and all of
which together shall constitute a single document. Except as otherwise stated
herein, in lieu of the original documents, a facsimile transmission or copy of
the original documents shall be as effective and enforceable as the original.
The Company hereby represents, warrants and covenants as follows:
(i) The Company has the full right, power and authority to enter into this
Agreement and to perform all of its obligations hereunder, (ii) this
Agreement has been duly authorized and executed by and constitutes a valid
and binding agreement of the Company enforceable in accordance with its
terms, (iii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not conflict with
or result in a breach of (A) The Company's certificate of incorporation or
by-laws, or (B) any agreement to which the Company is a party or by which
any of its property or assets is bound.
If the foregoing is consistent with our understanding, please sign the
enclosed copy of this letter in the space indicated below and return it to the
undersigned.
Very truly yours,
By: ____________________________
Xxxxx X. Xxxxxxx, President/CEO
Xxxxxxx Xxxxxxx and Partners
Accepted and agreed this 7th day of February 2005:
Millenium Holding Group, Inc.
By: _____________________________________
Xxxxxxx X. Xxx, President
Appendix A (to be filled in upon signing)
1. Contact Fund 000-000-0000
2. Contact Fund 000-000-0000
