Exhibit 10.16

 

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January 11, 2016

 

Mr. Scott L. Mathis

Chief Executive Officer

Algodon Wines & Luxury Development Group, Inc. 135

Fifth Avenue, 10th Floor

New York, NY 10010

 

Dear Mr. Mathis:

 

We are pleased that Algodon Wines & Luxury Development Group, Inc. (“Algodon” or
the “Company”) has decided to retain Maxim Group LLC (“Maxim”) to provide
general financial advisory and investment banking services to the Company as set
forth herein. This letter agreement (“Agreement”) will confirm Maxim’s
acceptance of such retention and set forth the terms of our engagement.

 

1. Retention. The Company hereby retains Maxim as its exclusive financial
advisor and investment banker to provide general financial advisory and
investment banking services, and Maxim accepts such retention on the terms and
conditions set forth in this Agreement. In connection with this Agreement, Maxim
may provide certain or all of the following services (collectively referred to
as the “Advisory Services”):

 

(a)provide a valuation analysis of the Company including:

I. Comparable company analysis;

II. Precedent transaction analysis;

III. Asset valuation using standard asset appraisal methodologies;

 

(b)assist management of the Company and advise the Company with respect to its
strategic planning process and business plans including an analysis of markets,
positioning, financial models, organizational structure, potential strategic
alliances and capital requirements;

 

(c)advise the Company on matters relating to its capitalization including a
potential public up listing;

 

(d)assist management of the Company with the preparation of the Company’s
marketing materials and investor presentations;

 

(e)assist the Company with strategic introductions;

 

(f)work closely with the Company’s management team to develop a set of long and
short-term goals with special focus on enhancing corporate and shareholder
value. This will include assisting the Company in determining key business
actions, including assistance with strategic partnership discussions and review
of financing requirements, intended to help enhance shareholder value and
exposure to the investment community;

 

(g)advise the Company on potential financing alternatives and merger and
acquisition criteria and activity, including facilitation and negotiation of any
financial or structural aspects of such alternatives; and

 

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

(h)provide such other financial advisory and investment banking services upon
which the parties may mutually agree.

 

It is expressly understood and agreed that Maxim shall be required to perform
only such tasks as may be necessary or desirable in connection with the
rendering of its services hereunder and therefore may not perform all of the
tasks enumerated above during the term of this Agreement. Moreover, it is
further understood that Maxim need not perform each of the above-referenced
tasks in order to receive the fees described in Section 3. It is further
understood that Maxim’s tasks may not be limited to those enumerated in this
paragraph.

 

2. Information. In connection with Maxim’s activities hereunder, the Company
will cooperate with Maxim and furnish Maxim upon request with all information
regarding the business, operations, properties, financial condition, management
and prospects of the Company (all such information so furnished being the
“Information”) which Maxim deems appropriate and will provide Maxim with access
to the Company’s officers, directors, employees, independent accountants and
legal counsel. The Company represents and warrants to Maxim that all Information
made available to Maxim hereunder will be complete and correct in all material
respects and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which such statements are or will
be made. The Company further represents and warrants that any projections and
other forward-looking information provided by it to Maxim will have been
prepared in good faith and will be based upon assumptions which, in light of the
circumstances under which they are made, are reasonable. The Company recognizes
and confirms that Maxim: (i) will use and rely primarily on the Information and
on information available from generally recognized public sources in performing
the services contemplated by this Agreement without having independently
verified the same; (ii) does not assume responsibility for the accuracy or
completeness of the Information and such other information; and (iii) will not
make an appraisal of any assets of the Company. Any advice rendered by Maxim
pursuant to this Agreement may not be disclosed publicly without Maxim’s prior
written consent. Maxim hereby acknowledges that certain of the Information
received by Maxim may be confidential and/or proprietary, including Information
with respect to the Company’s technologies, products, business plans, marketing,
and other Information which must be maintained by Maxim as confidential. Maxim
agrees that it will not disclose such confidential and/or proprietary
Information to any other companies in the industry in which the Company is
involved, or use such Information for any purpose unrelated to the services to
be provided pursuant to this Agreement. In addition, Maxim represents that it
has written procedures regarding information barriers and restricting the
dissemination of material non-public information.

 

3. Compensation. As consideration for Maxim’s services pursuant to this
Agreement, Maxim shall be entitled to receive, and the Company agrees to pay
Maxim, the following compensation:

 

(a)The Company shall pay to Maxim a non-refundable monthly fee of $7,500 (USD)
for the term of this Agreement; however in no event shall the Company pay fewer
than six (6) monthly fee payments to Maxim. The monthly fee payments are payable
at the beginning of each month upon execution of this Agreement until the
termination of the Agreement (subject to the minimum six month time period
detailed in the preceding sentence). The monthly fee payments shall be payable
by wire or other immediately available funds. The fees appearing in Exhibit B
(hereto, the “Fee Schedule”) shall be earned by and paid to Maxim by the Company
in connection with any Financings or Transactions (as such terms are defined
hereafter) undertaken by the Company, the terms of which will be will be
mutually agreed upon under separate advisory, placement agency and/or
underwriting agreements. The fees enumerated in Exhibit B are separate and apart
from the monthly fee payments enumerated earlier in this paragraph.

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

 

(b)In addition to the monthly fee, the Company will also issue to Maxim or its
designees 450,000 shares of the Company’s Common Stock (“Common Stock”). The
Common Stock shall be issued and shall vest based on the following schedule:

 

a.350,000 restricted shares of Common Stock will be issued to Maxim upon
execution of this Agreement. 1/9 or 11.1% of those shares shall vest upon the
execution of the Agreement, with an additional 1/9 or 11.1% to vest on each
successive month thereafter until either this Agreement is terminated or 350,000
shares have vested. In the event this Agreement is terminated before all 350,000
shares have vested, all unvested shares shall be promptly returned to the
Company along with any requested documentation (such as a signed stock power)
needed to effect a transfer of ownership of such shares back to the Company;

b.100,000 restricted shares of Common Stock upon an uplisting of the Company’s
Common Stock to a national exchange (NASDAQ or NYSE MKT).

 

The restricted shares of Common Stock will have unlimited piggyback registration
rights and the same rights afforded other holders of the Company’s Common Stock.

 

(c)The Company and Maxim acknowledge and agree that, in the course of performing
services hereunder, Maxim may communicate with (as the Company’s advisor) or
introduce the Company to third parties who may be interested in providing
financing to the Company (a “Financing”) or in entering into a transaction with
the Company, including, without limitation, a merger, acquisition or sale of
stock or assets (in which the Company may be the acquiring or the acquired
entity), joint venture, strategic alliance or other similar transaction (any
such transaction, a “Transaction”). The Company agrees that if during the term
of this Agreement or within twelve (12) months from the effective date of the
termination of this Agreement either the Company or any party to whom the
Company was introduced by Maxim or who was contacted by Maxim on behalf of the
Company in connection with its services for the Company hereunder proposes a
Financing or any Transaction involving the Company, then, if any such Financing
or Transaction is consummated, the Company shall pay to Maxim fees in accordance
with the Fee Schedule; provided, however, that if Maxim’s services are limited
to making an introduction to another investment bank or intermediary (“Party”)
that executes a Financing or a Transaction with the Company and Maxim does not
render any services in connection with a Transaction other than an introduction,
the fee hereunder shall be reduced to 1/3 or 33.3% of the applicable fee set
forth in the Fee Schedule. Alternatively, Maxim can enter into a fee sharing
agreement with the Party based the applicable fee set forth in the Fee Schedule.
Such fees shall be payable to Maxim in cash at the closing or closings of the
Financing or Transaction to which it relates. Should Maxim’s fee hereunder be
limited to the fee for making an introduction, it can earn an additional fee for
services provided as a sales agent in a Financing.

 

4. Expenses. In addition to payment to Maxim of the compensation set forth in
Section 3 hereof, the Company shall promptly upon request from time to time
reimburse Maxim for all reasonable expenses (including, without limitation, fees
and disbursements of counsel (capped at $5,000) and all travel and other
out-of-pocket expenses) incurred by Maxim in connection with its engagement
hereunder. Maxim will provide the Company an invoice and copies of receipts
pursuant to its expenses and such expenses (excepting legal fees) shall not
exceed $2,500 without prior authorization of the Company.

 

5. Indemnification. The Company agrees to indemnify Maxim in accordance with the
indemnification and other provisions attached to this Agreement as Exhibit A
(the “Indemnification Provisions”), which provisions are incorporated herein by
reference and shall survive the termination or expiration of this Agreement.

 

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

 

6. Future Rights. As additional consideration for its services hereunder and as
an inducement to cause Maxim to enter into this Agreement, if at any time during
the term of this Agreement or within twelve (12) months from the effective date
of the termination of this Agreement, the Company proposes to effect a public
offering of its securities on a US exchange, private placement of securities or
other Financing, the Company shall offer to retain Maxim as lead book running
manager of such offering, or as its exclusive agent in connection with such
Financing or other matter, upon such terms as the parties may mutually agree,
such terms to be set forth in a separate engagement letter or other agreement
between the parties. Such offer shall be made in writing in order to be
effective. The Company shall not offer to retain any other investment banking
firm in connection with any such offering or financing, on terms more favorable
than those discussed with Maxim without offering to retain Maxim on such more
favorable terms. Maxim shall notify the Company within ten (10) days of its
receipt of the written offer contemplated above as to whether or not it agrees
to accept such retention. If Maxim should decline such retention, the Company
shall have no further obligations to Maxim, except as specifically provided for
herein. For avoidance of confusion, the provisions of this paragraph shall not
apply to the private placement offering being conducted by the Company as of the
commencement of this Agreement. Furthermore, and notwithstanding the foregoing,
the Company’s subsidiary, OPEC Capital, Inc., is understood to have a prior
right to conduct or manage any offering contemplated in this paragraph during
such time that it is legally authorized to do so.

 

 

 

7. Other Activities. The Company acknowledges that Maxim has been, and may in
the future be, engaged to provide services as an underwriter, placement agent,
finder, advisor and investment banker to other companies in the industry in
which the Company is involved. Subject to the confidentiality provisions of
Maxim contained in Section 2 hereof, the Company acknowledges and agrees that
nothing contained in this Agreement shall limit or restrict the right of Maxim
or of any member, manager, officer, employee, agent or representative of Maxim,
to be a member, manager, partner, officer, director, employee, agent or
representative of, investor in, or to engage in, any other business, whether or
not of a similar nature to the Company’s business, nor to limit or restrict the
right of Maxim to render services of any kind to any other corporation, firm,
individual or association. Maxim may, but shall not be required to, present
opportunities to the Company.

 

8. Term and Termination; Survival of Provisions. Either Maxim or the Company may
terminate this Agreement at any time upon thirty (30) days’ prior written notice
to the other party after the six (6) month anniversary of this Agreement. In the
event of such termination, the Company shall pay and deliver to Maxim: (i) all
compensation earned through the date of such termination (“Termination Date”)
pursuant to any provision of Section 3 hereof; (ii) all compensation which may
be earned by Maxim after the Termination Date pursuant to Section 3 hereof; and
(iii) and shall reimburse Maxim for all expenses incurred by Maxim in connection
with its services hereunder pursuant to Section 4 hereof. All such fees and
reimbursements due to Maxim pursuant to the immediately preceding sentence shall
be paid to Maxim on or before the Termination Date (in the event such fees and
reimbursements are earned or owed as of the Termination Date) or upon the
closing of a Financing or Transaction or any applicable portion thereof (in the
event such fees are due pursuant to the terms of Section 3 hereof).
Notwithstanding anything expressed or implied herein to the contrary: (i) any
other agreement entered into between Maxim and the Company may only be
terminated in accordance with the terms thereof, notwithstanding an actual or
purported termination of this Agreement, and (ii) the terms and provisions of
Sections 3, 4, 5 (including, but not limited to, the Indemnification Provisions
attached to this Agreement and incorporated herein by reference), 6, 8, 9, 10,
11, 15 and 17 shall survive the termination of this Agreement.

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

9. Notices. All notices will be in writing and will be effective when delivered
in person or sent via facsimile and confirmed by letter, to the party to whom it
is addressed at the following addresses or such other address as such party may
advise the other in writing:

 

 

To the Company: Mr. Scott L. Mathis Chief Executive Officer   Algodon Wines &
Luxury Development Group, Inc.   135 Fifth Avenue, 10th Floor   New York, NY
10010   Telephone: (212) 739-7677     With a copy to: Eric S. Hutner, Esq.  
Hutner Klarish LLP   1359 Broadway, Suite 2001   New York, NY 10018   Telephone:
(212) 391-9235   Facsimile: (212) 981-9122         To Maxim: James Siegel, Esq.
  Maxim Group LLC   405 Lexington Avenue   New York, NY10174   Telephone: (212)
895-3508   Facsimile: (212) 895-3860       Mr. Clifford Teller Maxim Group LLC  
405 Lexington Avenue   New York, NY 10174

 

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

 

10. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be
enforced, governed by and construed in accordance with the laws of New York
without regard to principles of conflict of laws. Any controversy between the
parties to this Agreement, or out of shall be resolved by arbitration before the
Financial Industry Regulatory Authority (“FINRA”) in New York City. The
following arbitration agreement should be read in conjunction with these
disclosures:

 

(a)ARBITRATION IS FINAL AND BINDING ON THE PARTIES;

(b)THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE
RIGHT TO JURY TRIAL;

(c)PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM
COURT PROCEEDING;

(d)THE ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDING OR LEGAL
REASONING AND ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY
THE ARBITRATORS IS STRICTLY LIMITED; AND

 

ARBITRATION AGREEMENT ANY AND ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN THE
UNDERSIGNED AND YOU OR YOUR AGENTS, REPRESENTATIVES, EMPLOYEES, DIRECTORS,
OFFICERS OR CONTROL PERSONS, ARISING OUT OF, IN CONNECTION WITH, FROM OR WITH
RESPECT TO (a) ANY PROVISIONS OF OR THE VALIDITY OF THIS AGREEMENT OR ANY
RELATED AGREEMENTS, (b) THE RELATIONSHIP OF THE PARTIES HERETO, OR (c) ANY
CONTROVERSY ARISING OUT OF YOUR BUSINESS

January 11, 2016

 

SHALL BE CONDUCTED PURSUANT TO THE CODE OF ARBITRATION PROCEDURE OF FINRA.
ARBITRATION MUST BE COMMENCED BY SERVICE OF A WRITTEN DEMAND FOR ARBITRATION OR
A WRITTEN NOTICE OF INTENTION TO ARBITRATE. IF YOU ARE A PARTY TO SUCH
ARBITRATION, TO THE EXTENT PERMITTED BY THE RULES OF THE APPLICABLE ARBITRATION
TRIBUNAL, THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK, NEW YORK. THE DECISION
AND AWARD OF THE ARBITRATORS(S) SHALL BE CONCLUSIVE AND BINDING UPON ALL
PARTIES, AND ANY JUDGMENT UPON ANY AWARD RENDERED MAY BE ENTERED IN A COURT
HAYING JURISDICTION THEREOF, AND NEITHER PARTY SHALL OPPOSE SUCH ENTRY.

 

11. Amendments. This Agreement may not be modified or amended except in a
writing duly executed by the parties hereto.

 

12. Headings. The section headings in this Agreement have been inserted as a
matter of reference and are not part of this Agreement.

 

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

 

13. Successors and Assigns. The benefits of this Agreement shall inure to the
parties hereto, their respective successors and assigns and to the indemnified
parties hereunder and their respective successors and assigns, and the
obligations and liabilities assumed in this Agreement shall be binding upon the
parties hereto and their respective successors and assigns. Notwithstanding
anything contained herein to the contrary, neither Maxim nor the Company shall
assign any of its obligations hereunder without the prior written consent of the
other party.

 

14. No Third Party Beneficiaries. This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person or entity not a
party hereto, except those entitled to the benefits of the Indemnification
Provisions. Without limiting the foregoing, the Company acknowledges and agrees
that Maxim is not being engaged as, and shall not be deemed to be, an agent or
fiduciary of the Company’s stockholders or creditors or any other person by
virtue of this Agreement or the retention of Maxim hereunder, all of which are
hereby expressly waived.

 

15. Waiver. Any waiver or any breach of any of the terms or conditions of this
Agreement shall not operate as a waiver of any other breach of such terms or
conditions or of any other term or condition, nor shall any failure to insist
upon strict performance or to enforce any provision hereof on any one occasion
operate as a waiver of such provision or of any other provision hereof or a
waiver of the right to insist upon strict performance or to enforce such
provision or any other provision on any subsequent occasion. Any waiver must be
in writing.

 

16. Counterparts. This Agreement may be executed in any number of counterparts
and by facsimile transmission, each of which shall be deemed to be an original
instrument, but all of which taken together shall constitute one and the same
agreement. Facsimile and electronic signatures shall be deemed to be original
signatures for all purposes.

 

17. Disclaimers. Maxim and the Company further agree that neither Maxim nor any
of its affiliates or any of its/their respective officers, directors,
controlling persons (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act of 1934), employees or agents shall have any liability to
the Company, its security holders or creditors, or any person asserting claims
on behalf of or in the right of the Company (whether direct or indirect, in
contract, tort, for an act of negligence or otherwise) for any losses, fees,
damages, liabilities, costs, expenses or equitable relief arising out of or
relating to this Agreement or the Advisory Services rendered herein, except for
losses, fees, damages, liabilities, costs or expenses that arise out of or are
based on any action of or failure to act by Maxim and that are finally and fully
judicially determined (or determined by a properly constituted arbitration
panel) to have resulted solely from the gross negligence or willful misconduct
of Maxim.

 

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

January 11, 2016 Algodon Wines & Luxury Development

 

 

If the terms of our engagement as set forth in this letter are satisfactory to
you, please confirm by signing and returning one copy of this letter, together
with a check or wire for $7,500 representing the initial monthly payment in
connection with the Agreement.

 

  Very truly yours, MAXIM GROUP LLC   By: /s/Karl Brenza                      
Karl Brenza   Senior Managing Director       By: /s/Clifford
Teller                    Clifford Teller   Executive Managing Director, & Head
of
Investment Banking

 

 

 

Agreed to and accepted this 11th day of January, 2016

 

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC.

 

 

 

/s/Scott L. Mathis                                 

Name: Scott L. Mathis

Title: Chief Executive Officer

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

Algodon Wines & Luxury Development Group, Inc.

December 2015

 

Exhibit A

INDEMNIFICATION PROVISIONS

Capitalized terms used in this Exhibit shall have the meanings ascribed to such
terms in the Agreement to which this Exhibit is attached.

 

The Company agrees to indemnify and hold harmless Maxim and each of the other
Indemnified Parties (as hereinafter defined) from and against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements, and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise (including, without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing,
pursing or defending any such action, suit, proceeding or investigation (whether
or not in connection with litigation in which any Indemnified Party is a party))
(collectively, “Losses”), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with, Maxim’s acting for the Company,
including, without limitation, any act or omission by Maxim in connection with
its acceptance of or the performance or non-performance of its obligations under
the Agreement between the Company and Maxim to which these indemnification
provisions are attached and form a part (the “Agreement”), any breach by the
Company of any representation, warranty, covenant or agreement contained in the
Agreement (or in any instrument, document or agreement relating thereto,
including any Agency Agreement), or the enforcement by Maxim of its rights under
the Agreement or these indemnification provisions, except to the extent that any
such Losses are found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from the
gross negligence or willful misconduct of the Indemnified Party seeking
indemnification hereunder. The Company also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with the engagement of Maxim by
the Company or for any other reason, except to the extent that any such
liability is found in a final judgment by a court of competent jurisdiction (not
subject to further appeal) to have resulted primarily and directly from such
Indemnified Party’s gross negligence or willful misconduct.

 

These Indemnification Provisions shall extend to the following persons
(collectively, the “Indemnified Parties”) Maxim, its present and former
affiliated entities, managers, members, officers, employees, legal counsel,
agents and controlling persons (within the meaning of the federal securities
laws), and the officers, directors, partners, stockholders, members, managers,
employees, legal counsel, agents and controlling persons of any of them. These
indemnification provisions shall be in addition to any liability which the
Company may otherwise have to any Indemnified Party.

 

If any action, suit, proceeding or investigation is commenced, as to which an
Indemnified Party proposes to demand indemnification, it shall notify the
Company with reasonable promptness; provided, however, that any failure by an
Indemnified Party to notify the Company shall not relieve the Company from its
obligations hereunder. An Indemnified Party shall have the right to retain
counsel of its own choice to represent it, and the fees, expenses and
disbursements of such counsel shall be borne by the Company. Any such counsel
shall, to the extent consistent with its professional responsibilities,
cooperate with the Company and any counsel designated by the Company. The
Company shall be liable for any settlement of any claim against any Indemnified
Party made with the Company’s written consent. The Company shall not, without
the prior written consent of Maxim, settle or compromise any claim, or permit a
default or consent to the entry of any judgment in respect thereof, unless such
settlement, compromise or consent (i) includes, as an unconditional term
thereof, the giving by the claimant to all of the Indemnified Parties of an
unconditional release from all liability in respect of such claim, and (ii) does
not contain any factual or legal admission by or with respect to an Indemnified
Party or an adverse statement with respect to the character, professionalism,
expertise or reputation of any Indemnified Party or any action or inaction of
any Indemnified Party.

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

Algodon Wines & Luxury Development Group, Inc.

December 2015

 

 

In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company shall contribute to the Losses to which any Indemnified Party
may be subject (i) in accordance with the relative benefits received by the
Company and its stockholders, subsidiaries and affiliates, on the one hand, and
the Indemnified Party, on the other hand, and (ii) if (and only it) the
allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as to reflect not only the relative benefits,
but also the relative fault of the Company, on the one hand, and the Indemnified
Party, on the other hand, in connection with the statements, acts or omissions
which resulted in such Losses as well as any relevant equitable considerations.
No person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be
received) by the Company and its stockholders, subsidiaries and affiliates shall
be deemed to be equal to the aggregate consideration payable or receivable by
such parties in connection with the transaction or transactions to which the
Agreement relates relative to the amount of fees actually received by Maxim in
connection with such transaction or transactions. Notwithstanding the foregoing,
in no event shall the amount contributed by all Indemnified Parties exceed the
amount of fees and value of other consideration previously received by Maxim
pursuant to the Agreement.

 

Neither termination nor completion of the Agreement shall affect these
Indemnification Provisions which shall remain operative and in full force and
effect. The Indemnification Provisions shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of the Indemnified Parties
and their respective successors, assigns, heirs and personal representatives.

 

 

 

 

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ

 

 

 

Algodon Wines & Luxury Development Group, Inc.

December 2015

 

Exhibit B

FEE SCHEDULE

 

Capitalized terms used in this Exhibit shall have the meanings ascribed to such
terms in the Agreement to which this Exhibit is attached.

 

1.For any Financing, the Company shall:

 

(i)pay Maxim a cash fee of eight percent (8.0%) of the amount of capital raised,
invested or committed; and

(ii)pay Maxim a cash fee for unallocated expenses of one percent(l.0%) of the
amount of capital raised, invested or committed; and

(iii)deliver a warrant to Maxim (the “Agent Warrant”) to purchase shares of the
Company’s common stock (the “Common Stock”) equal to nine percent (9.0%) of the
number of shares of Common Stock underlying the securities issued in the
Financing. Such Agent Warrant will be issued at each Closing and shall provide,
among other things, that the Agent Warrant shall (i) be exercisable at an
exercise price of 110% to the price of the securities (or the exercise price of
the securities) issued to the investors in the Financing, (ii) expire five (5)
years from the date of issuance, (iii) contain any anti-dilution protection
provided to the investors in the Financing, if any, (iv) include customary
registration rights, including the registration rights provided to the
investors, (v) contain provisions for cashless exercise and (vi) include such
other terms as are normal and customary for warrants of this type.

 

2.Transaction Fees:

The Transaction Fees shall be payable to Maxim in cash at the closing or
closings of the Transaction to which it relates and shall be equal to three
percent (3%) of Transaction consideration as defined below. The amount of
consideration paid in a Transaction shall include, for purposes of calculating
such fee, all forms of consideration paid or received, directly or indirectly,
by the Company and/or its stockholders in such Transaction, including, without
limitation, cash, securities, notes or other evidences of indebtedness,
assumption of liabilities (whether by operation of law or otherwise), or any
combination thereof. If all or portion of the consideration paid in the
Transaction is other than cash or securities, then the value of such noncash
consideration shall be the fair market value thereof on the date the Transaction
is consummated as mutually agreed upon in good faith by the Company and Maxim.
If such noncash consideration consists of common stock, options, warrants or
rights for which a public trading market existed prior to the consummation for
the Transaction, then the value of such securities shall be determined based
upon the closing or last sales price thereof on the date of the consummation of
the Transaction. If such non-cash consideration consists of newly-issued,
publicly-traded common stock, options, warrants or rights for which no public
trading market existed prior to the consummation of the Transaction, then the
value thereof shall be the average of the closing prices for the twenty (20)
trading days subsequent to the fifth trading day after the consummation of the
Transaction. In such event, the fee payable to Maxim pursuant to this Section 3
shall be paid on the thirtieth (30th) trading day subsequent to consummation of
the Transaction. If no public market exists for the common stock, options,
warrants or other rights issued in the Transaction, then the value thereof shall
be as mutually agreed upon in good faith by the Company and Maxim. If the
non-cash consideration paid in the Transaction consists of preferred stock or
debt securities (regardless of whether a public trading market existed for such
preferred stock or debt securities prior to consummation of the Transaction or
exists thereafter), the value thereof shall be the maximum liquidation value
(without regard to accrued dividends) of the preferred stock or the principal
amount of the debt securities, as the case may be. If all or a portion of the
consideration payable in connection with the Transaction includes contingent
future payments, then the Company shall pay to Maxim an additional cash fee,
determined in accordance with this Section 3, as, when and if such contingency
payments are received. However, in the event of an installment purchase at a
fixed price and fixed time schedule, the Company agrees to pay Maxim the
percentage fee to which it is entitled promptly upon receipt by the Company or
the entity the Company has acquired. If with respect to any non-cash
consideration the Company and Maxim are unable to agree on the fair market value
thereof, then such value shall be determined by submission of the question to a
reputable appraisal firm with experience valuing property of the nature of the
subject consideration acceptable to the Company and Maxim (the fees and expenses
of whom shall be borne equally by the Company and Maxim).

 

Members FINRA & SIPC

405 Lexington Ave. • New York, NY IOI74

tel (212) 895-3500 • (800) 724-0761 • fax (212) 895-3783 • www.maximgrp.com New
York, NY • Long Island, NY • Redbank, NJ