MANAGEMENT ADVISORY AGREEMENT

 

This MANAGEMENT ADVISORY AGREEMENT (the "Agreement") is made and entered into
and effective as of March 15, 2006, between Chartwell International, Inc., a
Nevada corporation (the "Company") and Orchestra Finance LLP, a company
organized under the laws of the United Kingdom (together with its successors and
assigns, "Orchestra"). Orchestra Finance LLP, for purposes of U.S. law, is a
foreign entity domiciled outside the United States of America, does not conduct
any securities business in the U.S., and is not licensed as a broker-dealer in
the U.S. However, Orchestra Finance LLP is authorized and regulated by the
Financial Services Authority in the United Kingdom to carry on such activities
as arranging deals in investments, advising on investments, and dealing in
investments as principal or agent.

 

1. Retention. The Company hereby acknowledges that it has retained Orchestra,
and Orchestra acknowledges that Orchestra will provide management and financial
advisory services to the Company as requested by the Board of Directors of the
Company during the term of this Agreement, including but not limited to the
following: provision of Chairman of the Board of Directors of the Company or a
Director, recruitment of operating executives, additional board members,
management of the general affairs of the Company as requested by the Board of
Directors from time to time, and advice on proposed acquisition targets and/or
strategies.

 

2. Term. The term of this Agreement shall continue until the earlier to occur of
(i) the second anniversary of the date hereof, or (ii) the date on which
Orchestra and its affiliates, members or successors cease to own beneficially,
directly or indirectly, at least five percent (5%) of the voting power of the
securities of the Company or its successors.

 

3. Compensation.

 

(a) As compensation for Orchestra's services under this Agreement, the Company
shall be obligated to pay to Orchestra an annual fee (the "Management Advisory
Fee") of $120,000 (the "Base Fee") (subject to adjustment pursuant to paragraph
(c) below) and prorated on a daily basis for any partial calendar year during
the term of this Agreement. The Management Advisory Fee shall be payable in
equal quarterly installments on each January 1, April 1, July 1, and October 1
during the term of this Agreement (each a "Payment Date"), beginning with the
first Payment Date following the date hereof. All payments shall be made by wire
transfer of immediately available funds to such account as Orchestra may
designate from time to time in writing.

 

(b) In addition to the Base Fee, as compensation for Orchestra's services as
management advisor to the Company with respect to any future proposals, if any,
for a tender offer, acquisition, sale, merger, exchange offer, recapitalization,
restructuring or any debt or equity financing directly or indirectly involving
the Company or any of its subsidiaries, on the one hand, and any other person or
entity, on the other hand, or on specific projects as the Company may designate
for additional fees from time-to-time (each such transaction, an "Add-on
Transaction"), the Company shall be obligated to pay to

 

 

--------------------------------------------------------------------------------

 

Orchestra, at the closing of each such Add-on Transaction, a cash and equity fee
in the amount representing a percentage of the Transaction Value of each such
Add-on Transaction (which percentage shall be agreed by Orchestra and the
Company prior to the closing of each such Add-on Transaction). As used herein,
the term "Transaction Value" means the total value of the Add-on Transaction,
including without limitation, the aggregate amount of the funds required to
complete the Add-on Transaction (excluding any fees payable pursuant to this
Section 3(b)), including the amount of any indebtedness, preferred stock or
similar items assumed (or remaining outstanding).

The Company shall only be obligated to pay an Add-on Transaction Fee to
Orchestra upon consummation of an Add-on Transaction, whereby the Company shall
have no obligation to enter into any Transaction.

 

(c) Any or all of the fees provided for in this Section 3 may be waived in full
or in part by Orchestra in its sole and absolute discretion in the best interest
of the Company from time to time.

 

4. Reimbursement of Expenses. In addition to the compensation to be paid
pursuant to Section 3 hereof, the Company agrees to pay or reimburse Orchestra
for all "Reimbursable Expenses", which shall consist of all reasonable
disbursement and out-of-pocket expenses (including without limitation, costs of
travel, postage, deliveries and communications and fees and expenses of counsel,
accountants and consultants incurred by Orchestra or its affiliates for the
account of the Company or in connection with the performance by Orchestra of the
services contemplated by Section 1 hereof. Promptly (but not more than 10 days)
after request by or notice from Orchestra, the Company shall pay Orchestra, by
wire transfer of immediately available funds to an account designated by
Orchestra, the Reimbursable Expenses for which Orchestra has provided the
Company invoices or reasonably detailed descriptions. All past due payments in
respect of the Reimbursable Expenses shall bear interest at the lesser of the
highest rate of interest which may be charged under applicable law or the Prime
Rate plus 2% from the date which is 10 days following the request or notice from
Orchestra in respect of such Reimbursable Expenses to and including the date on
which such Reimbursable Expenses plus accrued interest thereon, are fully paid
to Orchestra.

 

5. Indemnification. The Company shall indemnify and hold harmless each of
Orchestra, its affiliates and partners, and the respective directors, officers,
controlling persons (within the meaning of Section 15 of the Securities Act of
1933 or Section 20(a) of the Securities Exchange Act of 1934), if any, agents
and employees of each of Orchestra, its affiliates and partners (Orchestra, its
affiliates and shareholders, and such other specified persons being collectively
referred to as "Indemnified Persons", and individually as an "Indemnified
Person") from and against any and all claims, liabilities, losses, damages and
expenses incurred by any Indemnified Person (including those arising out of an
Indemnified Person's negligence and fees and disbursements of the respective
Indemnified Person's counsel) which (A) are related to or arise out of (i)
actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by the Company or (ii) actions taken or
omitted to be taken by an Indemnified Person with the Company's consent or in
conformity with the Company's instructions or

 

2

 

--------------------------------------------------------------------------------

 

the Company's actions or omissions or (B) are otherwise related to or arise out
of Orchestra's engagement, and will reimburse each Indemnified Person for all
costs and expenses, including fees and disbursements of any Indemnified Person's
counsel, as they are incurred, in connection with investigating, preparing for,
defending, or appealing any action, formal or informal claim, investigation,
inquiry, or other proceeding, whether or not in connection with pending or
threatened litigation, caused by or arising out of or in connection with
Orchestra's acting pursuant to the engagement, whether or not any Indemnified
Person is named as a party thereto and whether or not any liability results
therefrom. The Company will not, however, be responsible for any claims,
liabilities, losses, damages, or expenses pursuant to clause (B) of the
preceding sentence that have resulted primarily from Orchestra's gross
negligence or willful misconduct. The Company also agrees that neither Orchestra
nor any other Indemnified Person shall have any liability to the Company for or
in connection with such engagement except for any such liability for claims,
liabilities, losses, damages, or expenses incurred by the Company that have
resulted primarily from Orchestra's gross negligence or willful misconduct. The
Company further agrees that it will not, without the prior written consent of
Orchestra, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit, or proceeding in respect of which
indemnifications may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action, suit, or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of Orchestra and each other Indemnified Person hereunder from all liability
arising out of such claim, action, suit or proceeding. THE COMPANY HEREBY
ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY CLAIMS,
LIABILITIES, LOSSES, DAMAGES, OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED
TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT, OR CONCURRENT
ORDINARY NEGLIGENCE OF ORCHESTRA OR ANY OTHER INDEMNIFIED PERSON.

 

The foregoing right to indemnity shall be in addition to any rights that
Orchestra or any other Indemnified Person may have at common law or otherwise
and shall remain in full force and effect following the completion or any
termination of the engagement. The Company hereby consents to personal
jurisdiction and to service and venue in any court in which any claim, which is
subject to this agreement, is brought against Orchestra or any other Indemnified
Person.

 

It is understood that, in connection with Orchestra's engagement, Orchestra may
also be engaged to act for the Company in one or more additional capacities, and
that the terms of this engagement or any such additional engagement(s) may be
embodied in one or more separate written agreements. This indemnification shall
apply to the engagement specified in the first paragraph hereof as well as to
any such additional engagement(s) (whether written or oral) and any modification
of said engagement or such additional engagement(s) and shall remain in full
force and effect following the completion or termination of said engagement or
such additional engagements.

 

 

3

 

--------------------------------------------------------------------------------

 

 

6. Confidential Information. In connection with the performance of the services
hereunder, Orchestra agrees not to divulge any confidential information, secret
processes, or trade secrets disclosed by the Company to it solely in its
capacity as a financial advisor, unless the Company consents to the divulging
thereof or such information, secret processes, or trade secrets are publicly
available or otherwise available to Orchestra without restriction or breach of
any confidentiality agreement or unless required by any governmental authority
or in response to any valid legal process.

 

7. Governing Law. This Agreement shall be construed, interpreted, and enforced
in accordance with the laws of the State of Nevada, excluding any choice-of-law
provisions thereof.

 

8. Assignment. This Agreement and all provisions contained herein shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned (other than with
respect to the rights and obligations of Orchestra, which may be assigned to any
one or more of its partners or affiliates) by any of the parties without the
prior written consent of the other party. From the date of this Agreement until
further notice provide by Orchestra, Imre Eszenyi, Managing Partner is the
primary representative and contact person.

 

9. Representations and Covenants by Orchestra Finance LLP. Orchestra Finance
L.L.P. is duly organized, validly existing and in good standing under the laws
of the United Kingdom. The Advisor has all requisite capacity and authority to
execute this Letter Agreement and to discharge its duties hereunder and has
taken all necessary action to authorize such execution, delivery and
performance, and obligations under this Letter Agreement, and upon execution,
constitutes enforceable obligations against it.

 

10. Independent Obligations. Nothing in this Agreement shall be deemed to
constitute the parties hereto partners, joint-venturers, employer-employee or
principal-agent.

 

11. Notices. Any notice or communication required to be given by either party
hereunder shall be in writing and shall be hand delivered or sent by certified
or registered mail, return receipt requested, to the party receiving such
communication at the address specified below or such other address as the
relevant party may specify to the other party in the future:

 

If to Advisor:

If to Chartwell:

 

Orchestra Finance L.L.P.

Bullivant|Houser|Bailey Pc

 

No. 7 Inverness Gardens

1331 Garden Highway, Suite 300

London W8 4RN, U.K.

Sacramento, CA 95833

 

 

Attention: David Adams

 

 

12. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the

 

4

 

--------------------------------------------------------------------------------

 

same instrument, and the signature of any party to any counterpart shall be
deemed a signature to, and may be appended to, any other counterpart.

 

13. Other Understandings. All discussions, understandings, and agreements
theretofore made between any of the parties hereto with respect to the subject
matter hereof are merged in this Agreement, which alone fully and completely
expresses the agreement of the parties hereto. All calculations of the
Management Advisory Fee and Reimbursable Expenses shall be made by Orchestra in
good faith and, in the absence of manifest error, shall be final and conclusive.
The Company expressly acknowledges that Orchestra has been retained solely as an
advisor to the Company, and not as an advisor to or agent of any other person,
and that the Company's engagement of Orchestra is not intended to confer any
rights upon any person not a party hereto, including shareholders, employees or
creditors of the Company, as against Orchestra, Orchestra's affiliates or
partners or any of their respective directors, officers, agents and employees.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.

 

Chartwell International, Inc.

Orchestra Finance LLP.

 

 

 

By: _______________________

By: _______________________

Name:

Name: Imre Eszenyi

 

Title:

Title:

Managing Partner

 

 

 

 

5