**Exhibit 10.66**

 

 

***Private and Confidential***

 

November 17,2004

 

Mr. IrwinGruverman

Chairman &CEO

MFICCorporation

30Ossipee Rd., P.O. Box 9101

Newton,MA 02464

 

DearMr. Gruverman:

 

We are pleasedthat MFIC Corporation, a Delaware****corporation(“**MFIC**” or the “**Company**”) has decided to retain Maxim GroupLLC (“**Maxim**”) to provide general financialadvisory and investment banking services to the Company as set forthherein.  This letter agreement (“**Agreement**”) will confirm Maxim’s acceptance of suchretention and set forth the terms of our engagement.

 

1.             Retention.  The Companyhereby retains Maxim for a period of twelve (12) months from the executionhereof and the payment of an Initial Advisory Fee (as more particularlydescribed hereinafter) as its exclusive financial advisor and investment bankerto provide general financial advisory and investment banking services, andMaxim accepts such retention on the terms and conditions set forth in thisAgreement.  In such capacity, Maximshall: (i) familiarize itself, to the extent appropriate and feasible,with the business, operations, properties, financial condition, management andprospects of the Company; (ii) advise the Company on matters relating toits capitalization; (iii) evaluate alternative financing structures andarrangements; and (iv) provide such other financial advisory andinvestment banking services upon which the parties may mutually agree.

 

2.             Information. In connection with Maxim’s activities hereunder, the Company willcooperate with Maxim and furnish Maxim upon request with all informationregarding the business, operations, properties, financial condition, managementand prospects of the Company (all such information so furnished being the “**Information**”) which Maxim deems appropriate and will provideMaxim with reasonable access to the Company’s officers, directors, employees,independent accountants and legal counsel. The Company represents and warrants to Maxim that all Information madeavailable to Maxim hereunder will be complete and correct in all materialrespects and will not contain any untrue statement of a material fact or omitto state a material fact necessary in order to make the statements therein notmisleading in light of the circumstances under which such statements are or willbe made.  The Company further representsand warrants that any projections and other forward-looking informationprovided by it to Maxim will have been prepared in good faith and will be basedupon assumptions which, in light of the circumstances under which they aremade, are reasonable.  The Companyrecognizes and confirms that Maxim: (i) will use and rely primarily on theInformation and on information available from generally recognized publicsources in performing the services contemplated by this Agreement withouthaving independently verified the same; (ii) does not assumeresponsibility for the accuracy or completeness of the Information and suchother information; and (iii) will not make an appraisal of any assets ofthe Company.  Any advice rendered byMaxim pursuant to this Agreement may not be attributed publicly to Maximwithout Maxim’s prior written consent. Maxim hereby acknowledges that certain of the Information received byMaxim may be confidential and/or proprietary, including Information withrespect to the Company’s technologies, products, business plans, marketing,customers, suppliers, vendors and other Information (the “ConfidentialInformation”) which must be maintained by Maxim as absolutely confidential. Forpurposes of this Agreement, it is specifically agreed that the term

 

Members NASD & SIPC

405 Lexington Ave. * New York, NY 10174 * tel (212) 895-3500 * (800) 724-0761* fax (212) 895-3783 * www.maximgrp.com

New York, NY * Long Island, NY * Chicago, IL

 

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Confidential Information shall mean any and all information disclosedto Maxim that is not included in the Company’s public filings.  The term “Confidential Information” does notinclude information which (i) was or becomes generally available to thepublic other than as a result of a disclosure by Maxim or its representativesin violation of this Agreement, (ii) was or becomes available to Maxim ona non-confidential basis from a source other than the Company or itsRepresentatives provided that such source is not known to Maxim to be bound bya confidentiality agreement with the Company, or otherwise prohibited fromtransmitting the information to Maxim by a contractual, legal or fiduciaryobligation or (iii) was within Maxim’s possession prior to its beingfurnished to Maxim by or on behalf of the Company, provided that the source ofsuch information was not bound by a confidentiality agreement with the Companyor otherwise prohibited from transmitting the information to you by acontractual, legal or fiduciary obligation. Maxim agreesthat it will not without the Company’s prior approval disclose any suchConfidential Information to any third party without the Company’s prior writtenapproval specifying the type, types or items of Confidential Information thatmay be disclosed and identifying such third party recipient(s) by name..

 

3.             Compensation.  As consideration for Maxim’s servicespursuant to this Agreement, Maxim shall be entitled to receive, and the Companyagrees to pay Maxim, the following compensation:

 

(a)                      The Company shall pay to Maxim (i) anon-refundable cash fee of $25,000 payable upon execution of this Agreement **(“Initial Advisory Fee”)**, and (ii) awarrant (“**Warrant**”) to purchase100,000 shares of the Company’s common stock. The Warrant shall be exercisableat any time during the three-year period commencing on the date hereof at anexercise price of $3.20 per share. The Warrant shall contain provisions,including, without limitation, those pertaining to cashless exercise,anti-dilution protection and piggyback registration rights, contained in theWarrants issued to the Company’s investors in a Regulation D private placementoffering earlier this year.  The fees(except for the Initial Advisory Fee) appearing in Exhibit B(hereto, the “**Fee Schedule**”) shallbe earned by and paid to Maxim by the Company in connection with financings ortransactions undertaken by the Company, the terms of which will be will bemutually agreed upon under separate advisory, placement agency and/orunderwriting agreements.

 

(b)                     The Company and Maxim acknowledge and agreethat, in the course of performing services hereunder, Maxim may introduce theCompany to third parties who may be interested in providing financing to theCompany (a “**Financing**”) or in entering into atransaction with the Company, including, without limitation, a merger,acquisition or sale of stock or assets (in which the Company may be theacquiring or the acquired entity), joint venture, strategic alliance or othersimilar transaction (any such transaction, a “**Transaction**”).When, as, and if Maxim intends to make such an introduction it will promptlyprovide written notice to the Company of the identity of such party(s) who maybe interested in entering into a Transaction, whereupon the Company shall five (5) daysto disapprove of such introduction. The foregoing acknowledgement and agreementshall not, however, be construed to permit Maxim to disclose ConfidentialInformation to any such third party without complying with the obligationsprescribed above.

 

The Company agrees that if within eighteen (18)months from the date of the notice required in the preceding paragraph theCompany and any party to whom the Company was introduced by Maxim hereunderproposes a Financing or any Transaction involving the Company and Maxim is notengaged as the Company’s exclusive financial advisor, agent and/or investmentbanker in connection with

 

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such Financing or Transaction pursuant to Section 6hereof, then, if any such Financing or Transaction is consummated, the Companyshall pay to Maxim fees in accordance with the Fee Schedule.

 

Such fees shall be payable to Maxim as set forth in Exhibit B.

 

The amount of consideration paid in a Transactionshall include, for purposes of calculating such fee, all forms of considerationpaid or received, directly or indirectly, by the Company and/or itsstockholders 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 a portion of the consideration paidin the Transaction is other than cash or securities, then the value of suchnon-cash consideration shall be the fair market value thereof on the date theTransaction is consummated as mutually agreed upon in good faith by the Companyand Maxim.  If such non-cashconsideration consists of common stock, options, warrants or rights for which apublic trading market existed prior to the consummation for the Transaction,then the value of such securities shall be determined based upon the closing orlast sales price thereof on the date of the consummation of theTransaction.  If such non-cash considerationconsists of newly-issued, publicly-traded common stock, options, warrants orrights for which no public trading market existed prior to the consummation ofthe Transaction, then the value thereof shall be the average of the closingprices for the 20 trading days subsequent to the fifth trading day after theconsummation of the Transaction.  In suchevent, the fee payable to Maxim pursuant to this Section 3 shall be paidon the 30th trading day subsequent to consummation of theTransaction.  If no public market existsfor the common stock, options, warrants or other rights issued in theTransaction, then the value thereof shall be as mutually agreed upon in goodfaith by the Company and Maxim.  If thenon-cash consideration paid in the Transaction consists of preferred stock ordebt securities (regardless of whether a public trading market existed for suchpreferred stock or debt securities prior to consummation of the Transaction orexists thereafter), the value thereof shall be the maximum liquidation value(without regard to accrued dividends) of the preferred stock or the principalamount of the debt securities, as the case may be.

 

Any amounts payable by a purchaser to the Company,any stockholder of the Company or an affiliate of either the Company or anystockholder of the Company in connection with a non-competition, employment,consulting, licensing, supply or other agreement (or payable by the Company ifthe Company is the acquiring entity) shall be deemed to be part of theconsideration paid in the Transaction. If all or a portion of the consideration payable in connection with theTransaction includes contingent future payments, then the Company shall pay toMaxim 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 installmentpurchase at a fixed price and fixed time schedule, the Company agrees to payMaxim, upon consummation of such Transaction, an additional cash fee,determined in accordance with this Section 3 based upon the present valueof such installment payments using a discount rate of 10%.  If with respect to any non-cash considerationthe 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 areputable appraisal firm with experience valuing property of the nature of the

 

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subject consideration acceptable to the Company andMaxim (the fees and expenses of whom shall be borne equally by the Company andMaxim).

 

4.             Expenses.  In additionto payment to Maxim of the compensation set forth in Section 3 hereof, theCompany shall promptly upon request from time to time reimburse Maxim for allreasonable expenses (including, without limitation, travel and otherout-of-pocket expenses but excluding any counsel fees and expenses) incurred byMaxim in connection with its engagement hereunder. Maxim will provide theCompany an invoice and copies of receipts pursuant to its expenses and suchexpenses shall not exceed $5,000****withoutprior authorization of the Company.

 

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

 

6.             Future Rights. As additional consideration for its services hereunder and as aninducement to cause Maxim to enter into this Agreement, if at any time duringthe term of this Agreement or within twelve (12) months from the effective dateof the termination of this Agreement, the Company proposes to effect a publicoffering of its securities or a Financing or Transaction or to engage aninvestment banking firm to provide any other services to the Company (otherthan during the term of this Agreement the services to be provided by Maximhereunder), the Company shall notify Maxim in writing of its intent toundertake such transaction and the proposed terms thereof and provide Maximwith a first opportunity to accept such engagement as MFIC’s exclusive advisor,agent and/or investment banker in connection therewith. Such opportunity toaccept or reject an engagement to effect a transaction on MFIC’s behalf willexpire ten (10) business days from the date on which Maxim is firstinformed thereof. Maxim must inform MFIC in writing of its decision as towhether it will undertake such transaction on MFIC’s behalf. If Maxim either: (i) rejectsMFIC’s proposed terms, or (ii) fails to respond within the allotted timethen MFIC shall have no further obligation to offer such transaction to Maxim.

 

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, advisorand investment banker to other companies in the industry in which the Companyis involved.  Subject to theconfidentiality provisions of Maxim contained in Section 2 hereof, the Companyacknowledges and agrees that nothing contained in this Agreement shall limit orrestrict the right of Maxim or of any member, manager, officer, employee, agentor 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’sbusiness, nor to limit or restrict the right of Maxim to render services of anykind to any other corporation, firm, individual or association.  Maxim may, but shall not be required to,present opportunities to the Company.

 

8.             Termination; Survival of Provisions. Either Maxim or MFIC may terminate this Agreement at any time upon 30days’ prior written notice to the other party. In the event of such termination, the Company shall pay and deliver toMaxim: (i) all compensation earned through the date of such termination (“**Termination Date**”) pursuant to any provision of Section 3hereof, and (ii) all compensation which may be earned by Maxim after theTermination Date pursuant to Section 3 hereof, and shall reimburse Maximfor all expenses incurred by Maxim in connection with its services hereunderpursuant to Section 4 hereof.  Allsuch fees and reimbursements due to Maxim pursuant to the immediately precedingsentence shall be paid to Maxim within thirty (30) days of the Termination Date(in the event such fees and reimbursements are earned or owed as of theTermination Date) or upon the closing of a Financing or Transaction or anyapplicable portion thereof (in the event such fees are due

 

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pursuant to the terms of Section 3 hereof).  Notwithstanding anything expressed or impliedherein to the contrary: (i) any Agency Agreement entered into betweenMaxim and the Company may only be terminated in accordance with the termsthereof, notwithstanding an actual or purported termination of this Agreement,and (ii) the terms and provisions of Sections 3, 4, 5 (including, but notlimited to, the Indemnification Provisions attached to this Agreement andincorporated herein by reference), 6, 7, 8, 9, 10, 15, and 16 shall survive thetermination of this Agreement.

 

9.             Notices.  All noticesprovided hereunder shall be given in writing and either delivered personally orby overnight courier service or sent by certified mail, return receiptrequested, or by facsimile transmission, if to Maxim, to Maxim Group LLC, 99Sunnyside Boulevard Extension, Woodbury, New York 11797, Attention: Edward L.Rose, Esq., General Counsel, Fax No. (516) 364-2518, and if to theCompany, to the address, set forth on the first page of this Agreement,Attention: Irwin Gruverman, Fax No.: (617) 965-1213.  Any notice delivered personally or by faxshall be deemed given upon receipt (with confirmation of receipt required inthe case of fax transmissions); any notice given by overnight courier shall bedeemed given on the next business day after delivery to the overnight courier;and any notice given by certified mail shall be deemed given upon the secondbusiness day after certification thereof.

 

10.           Arbitration. In the event of any dispute, controversy or claim arising out of orrelating to this Agreement, or concerning the respective rights or obligationsof the parties, the parties agree submit the matter to arbitration administeredby the American Arbitration Association in accordance with its then existingCommercial Arbitration Rules.  The arbitration shall take place before asingle arbitrator and shall be governed by the laws of the State of NewYork.  The decision of the arbitrator in the matter shall be final andbinding upon the parties and judgment on the award rendered by the arbitratormay be entered in any court having jurisdiction thereof.  The partiesagree that the arbitrator shall award (i) compensatory damages andreasonable attorneys’ fees and expenses to the prevailing party in sucharbitration, but shall have no authority to award punitive, consequential,indirect, incidental or special damages absent a finding of willful or recklessconduct, and (ii) any equitable remedy including specific performance orinjunctive relief that the arbitrator deems appropriate.  Except asrequired by law, the parties and an arbitrator shall keep the content andresults of any arbitration hereunder strictly confidential and shall notdisclose such content or results without the prior written consent of allparties involved.  The arbitration provision contained in this Section doesnot prevent any party from seeking injunctive relief from a court in order topreserve the status quo, prevent or stop any breach of the confidentialityprovisions or to enforce any arbitration award.

 

11.           Amendments.  ThisAgreement may not be modified or amended except in a writing duly executed bythe parties hereto.

 

12.           Headings.  The section headingsin this Agreement have been inserted as a matter of reference and are not partof this Agreement.

 

13.           Successors and Assigns. The benefits of this Agreement shall inure to the parties hereto, theirrespective successors and assigns and to the indemnified parties hereunder andtheir respective successors and assigns, and the obligations and liabilitiesassumed in this Agreement shall be binding upon the parties hereto and theirrespective successors and assigns. Notwithstanding anything contained herein to the contrary, neither Maximnor the Company shall assign any of its obligations hereunder without the priorwritten 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 thoseentitled to the benefits of the Indemnification Provisions.  Without limiting the foregoing, the Companyacknowledges

 

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and agrees that Maxim is not being engaged as, and shall not be deemedto be, an agent or fiduciary of the Company’s stockholders or creditors or anyother person by virtue of this Agreement or the retention of Maxim hereunder,all of which are hereby expressly waived.

 

15.           Waiver.  Any waiver orany breach of any of the terms or conditions of this Agreement shall notoperate as a waiver of any other breach of such terms or conditions or of anyother term or condition, nor shall any failure to insist upon strictperformance or to enforce any provision hereof on any one occasion operate as awaiver of such provision or of any other provision hereof or a waiver of theright to insist upon strict performance or to enforce such provision or anyother provision on any subsequent occasion. Any waiver must be in writing.

 

16.           Remedies.  Maxim agreesand acknowledges that any violation or threatened violation of theconfidentiality provisions of this Agreement will cause irreparable injury tothe Company and that, in addition to any other remedies that may be available,in law, in equity or otherwise, the Company shall be entitled to obtaininjunctive relief against any reasonably perceived threat of breach of this Agreementor the continuation of any breach by Maxim, without the necessity of provingactual damages.  If the Company bringsany action against Maxim for such a breach, or any other breach of thisAgreement, the unsuccessful party shall pay all of its and the other party’scosts and expenses.

 

17.           Counterparts. This Agreement may be executed in any number of counterparts and byfacsimile transmission, each of which shall be deemed to be an originalinstrument, but all of which taken together shall constitute one and the sameagreement.  Facsimile signatures shall bedeemed to be original signatures for all purposes.

 

If the foregoing correctly sets forth our agreement, please sign theenclosed copy of this Agreement in the space provided below and return it tous.

 
|                                                                                        | Very truly yours,       |
|---------------------------------------------------------------------------------------------|-------------------------|
|                                                                                        |                    |
|                                                                                        | MAXIM GROUP LLC         |
|                                                                                        |                    |
|                                                                                        | By:                     |   |   |
|                                                                                        |                    | Andrew Scott |
|                                                                                        |                    | Managing Director |
|                                                                                        |                    |
|                                                                                        | By:                     |   |   |
|                                                                                        |                    | Clifford A. Teller |
|                                                                                        |                    | Managing Director |
|                                                                                        |                    |
| **Agreed to and accepted this         day of November, 2004** |
|                                                                                        |                    |
| MFIC CORPORATION                                                                            |                    |
|                                                                                        |                    |
| By:                                                                                         |                    |   |   |
|                                                                                        | Irwin Gruverman         |   |
|                                                                                        | Chairman & CEO |   |
|                                                                                             |                         |  |  |  |  |

 

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**Exhibit A**

 

**INDEMNIFICATIONPROVISIONS**

 

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

 

MFIC Corporationagrees to indemnify and hold harmless Maxim and each of the other IndemnifiedParties (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 andinvestigations in respect thereof and any and all legal and other costs,expenses and disbursements in giving testimony or furnishing documents inresponse 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 isa party)) (collectively, “**Losses**”),directly or indirectly, caused by, relating to, based upon, arising out of, orin connection with, Maxim’s acting for the Company, including, withoutlimitation, any act or omission by Maxim in connection with its acceptance ofor the performance or non-performance of its obligations under the Agreementbetween the Company and Maxim to which these indemnification provisions areattached and form a part (the “**Agreement**”),any breach by the Company of any representation, warranty, covenant oragreement contained in the Agreement (or in any instrument, document oragreement relating thereto, including any Agency Agreement), or the enforcementby 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 acourt of competent jurisdiction (not subject to further appeal) to haveresulted primarily and directly from the gross negligence or willful misconductof the Indemnified Party seeking indemnification hereunder.  The Company also agrees that no IndemnifiedParty shall have any liability (whether direct or indirect, in contract or tortor otherwise) to the Company for or in connection with the engagement of Maximby the Company or for any other reason, except to the extent that any suchliability is found in a final judgment by a court of competent jurisdiction(not subject to further appeal) to have resulted primarily and directly fromsuch Indemnified Party’s gross negligence or willful misconduct.

 

TheseIndemnification Provisions shall extend to the following persons (collectively,the “**Indemnified Parties**”):  Maxim, its present and former affiliatedentities, managers, members, officers, employees, legal counsel, agents andcontrolling persons (within the meaning of the federal securities laws), andthe officers, directors, partners, stockholders, members, managers, employees,legal counsel, agents and controlling persons of any of them.  These indemnification provisions shall be inaddition to any liability which the Company may otherwise have to anyIndemnified Party.

 

If any action,suit, proceeding or investigation is commenced, as to which an IndemnifiedParty proposes to demand indemnification, it shall notify the Company withreasonable promptness; provided, however, that any failure by anIndemnified Party to notify the Company shall not relieve the Company from itsobligations hereunder.  An IndemnifiedParty 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 theCompany.  Any such counsel shall, to theextent consistent with its professional responsibilities, cooperate with theCompany and any counsel designated by the Company.  The Company shall be liable for anysettlement of any claim against any Indemnified Party made with the Company’swritten consent.  The Company shall not,without the prior written consent of Maxim, settle or compromise any claim, orpermit a default or consent to the entry of any judgment in respect thereof,unless such settlement, compromise or consent (i) includes, as anunconditional term thereof, the giving by the claimant to all of theIndemnified Parties of an unconditional release from all liability in respectof such claim, and (ii) does not contain any factual or legal admission byor with respect to an Indemnified Party or an adverse

 

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statement with respect to the character, professionalism, expertise orreputation of any Indemnified Party or any action or inaction of anyIndemnified Party.

 

In order toprovide for just and equitable contribution, if a claim for indemnificationpursuant to these indemnification provisions is made but it is found in a finaljudgment by a court of competent jurisdiction (not subject to further appeal)that such indemnification may not be enforced in such case, even though theexpress provisions hereof provide for indemnification in such case, then theCompany shall contribute to the Losses to which any Indemnified Party may besubject (i) in accordance with the relative benefits received by theCompany and its stockholders, subsidiaries and affiliates, on the one hand, andthe Indemnified Party, on the other hand, and (ii) if (and only if) theallocation provided in clause (i) of this sentence is not permitted byapplicable law, in such proportion as to reflect not only the relativebenefits, but also the relative fault of the Company, on the one hand, and theIndemnified Party, on the other hand, in connection with the statements, actsor omissions which resulted in such Losses as well as any relevant equitableconsiderations.  No person found liablefor a fraudulent misrepresentation shall be entitled to contribution from anyperson who is not also found liable for fraudulent misrepresentation.  The relative benefits received (oranticipated to be received) by the Company and it stockholders, subsidiariesand affiliates shall be deemed to be equal to the aggregate considerationpayable or receivable by such parties in connection with the transaction ortransactions to which the Agreement relates relative to the amount of feesactually received by Maxim in connection with such transaction ortransactions.  Notwithstanding theforegoing, in no event shall the amount contributed by all Indemnified Partiesexceed the amount of fees previously received by Maxim pursuant to theAgreement.

 

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

 

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**Exhibit B**

 

**FEE SCHEDULE**

 

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

 
| **Financing Fees:**   |   | 1. For any Financing, the  Company shall:                                                                                                                                                                                                                                                                                                                                               |
|-----------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   | (i)            pay  Maxim a cash fee of 7% of the amount of capital raised, invested or  committed; and                                                                                                                                                                                                                          |
|                  |   | (ii)           pay  Maxim a cash fee for unallocated expenses of 1% of the amount of capital  raised, invested or committed.                                                                                                                                                                                                          |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                    |
| **Transaction Fees:** |   | The Transaction Fees shall be payable to Maxim in  cash at the closing or closings of the Transaction to which it relates.                                                                                                                                                                                                                                                              |
| ** **            |   | An amount equal to the greater of:                                                                                                                                                                                                                                                                                                                                                      |
| ** **            |   |                                                                                                                                                                                                                                                                                                                                                                                    |
| ** **            |   | (i)            $350,000,  or                                                                                                                                                                                                                                                                                                     |
|                  |   | (ii)           4% of  the aggregate consideration paid or received by the Company and/or its  stockholders in such Transaction, as the case may be.                                                                                                                                                                                   |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                    |
| **Attorney Fees:**    |   | The Company will pay up to $35,000 in legal fees  related to the Financing or the Transaction to Maxim’s counsel at the  Closing.                                                                                                                                                                                                                                                  |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                    |
| **Agent  Warrants:**  |   | The  Company shall grant to Maxim Agent Warrants in the form of, at Maxim’s  option, (a) Securities issued pursuant to a Financing or (b) Common  Stock of the Company, as follows:                                                                                                                                                                                      |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                    |
|                  |   | (i)            For  any Financing or Transaction, warrants to purchase 7% of the amount of  capital raised, invested or committed                                                                                                                                                                                                |
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                    |
|                  |   | The Agent Warrants shall  have: (a) an exercise price equal to 150% of the 30-day VWAP of  Common Stock preceding the closing of the Financing or Transaction, (b) a  3-year term, (c) cashless exercise provisions, (d) standard  anti-dilution protections, and (e) one demand registration right and  unlimited “piggy-back” registration rights. |

 

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