[Diversified Corporate Consulting Group, LLC Letterhead]
May 30, 1996
Mr. James R. Shaw
PRESIDENT
CLASSIC RESTAURANTS, INC.
3091 Governors Lake Drive, Building 100, Suite 500
Norcross, Georgia 30071
By Facsimile Transmission to 1-770-729-8330
Re: PROFESSIONAL ENGAGEMENT
Dear Mr. Shaw:
This letter confirms the terms pursuant to which we have been engaged
by Classic Restaurants, Inc., a Florida corporation (the "Company"), to provide
the following services:
DIVERSIFIED CORPORATE CONSULTING GROUP, LLC'S RESPONSIBILITIES
1. Recruit and retain at least five market makers for the Company's common
stock.
2. Recruit and supervise a financial public relations firm acceptable to
the Company's
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[Services offered by Diversified Corporate Consulting Group, LLC]
Mr. James R. Shaw
May 30, 1996
Page 2
Board of Directors, to assist the Company to disseminate information
required in order to permit its securities to realize their proper
trading value.
3. Use our best efforts to introduce the Company to at least two
journalistic publications in multiple media, and to encourage such
publications to feature the Company's progress in communications to
subscribers.
4. (a) Assist the Company to raise required debt or equity capital
through introductions to investment banking firms and
individual investors, when and if necessary; and
(b) Assist the Company to list its securities, if eligible, for
trading on either one or more national securities exchanges or
on the NASDAQ inter dealer quotation system.
5. Use best efforts to induce retail securities brokerage firms to
consider the Company's securities as appropriate investments for their
retail clients.
6. Assist the Company to effect corporate restructuring designed to
maximize its operational efficiency, initiate an acquisitions program,
and develop programs to assure compliance with applicable securities
laws, with initial legal services to be provided through your legal
counsel.
7. If required, train Company personnel and consultants in proper
procedures for regulatory compliance and to effect its various
strategic and tactical plans.
8. Assist the Company to locate and implement computer programs designed
to perform a major portion of the preparation of periodic reports and
proxy materials required by the Securities Exchange Act of 1934, as
amended.
9. Develop programs to assist the Company to comply with the electronic
filing requirements of Securities and Exchange Commission Regulation
ST.
TERMS OF ENGAGEMENT
1. Except as described below with reference to the services described
above (which are to be completed within 6 months after the date of this
engagement letter), we will bill at our standard hourly rates for all
work as to which a prior written arrangement with different terms has
not been entered into. Any documents prepared by us on existing
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Diversified Corporate Consulting Group, LLC
Mr. James R. Shaw
May 30, 1996
Page 3
forms will be subject to a $50 per page initial licensing fee augmented
by the time spent in personalizing the subject form.
2. NOTWITHSTANDING THE FOREGOING, during the initial 185 days of our
representation, we will accept and you will pay to us:
(a) A non-accountable, non-refundable engagement fee of $10,000;
(b) 100,000 shares of the Company's common stock to be registered
on Securities and Exchange Commission Form S-8, and issued to
Diversified Corporate Consulting Group, LLC, on or before June
28, 1996; and
(c) Options to purchase 300,000 shares of the Company's common
stock, both options and the underlying common stock to be
registered on Securities and Exchange Commission Form S-8 on
or before June 28, 1996, and exercisable as follows:
(1) The exercise price shall be the nominal sum of $0.10
per share;
(2) The options shall be exercisable as to 100,000 shares
for a period of one year, starting on June 30, 1996;
and as to the remaining 200,000 shares, for a period
of one year commencing on August 31, 1996; and
(3) The options shall be subject to anti-dilutive rights.
The foregoing compensation shall be in lieu of document licensing fees
and of required cash payments for up to an aggregate of 130 hours of our hourly
and licensing fees.
3. Unless requested by you to the contrary, work will be performed by the
person with the lowest billing rate and requisite knowledge and
experience.
4. All work requiring legal review will be submitted for approval by you
to your legal counsel prior to its use, or, in the alternative, we will
engage legal counsel to conduct such review on your behalf. In the
latter case, our general counsel will review legal matters pertaining
to states in which it is licensed to practice law and matters
pertaining to other states will be referred to attorneys licensed in
such other states. Payment of all balances due such unrelated attorneys
will be your responsibility, notwithstanding our collection function.
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Diversified Corporate Consulting Group, LLC
Mr. James R. Shaw
May 30, 1996
Page 4
5. In addition to our hourly fees, you will be responsible for payment of
all costs and disbursements associated with our services. All
statements will be paid within 10 days after receipt. In the event
additional time is required, the Firm will have the option of selling
the account receivable and you agree to pay interest thereon at the
monthly rate of 1%. In the event collection activities are required,
you agree to pay all of our out of pocket costs associated therewith.
There will be no change or waiver of the provisions contained herein,
unless such change is in writing and signed by you and the Firm.
6. Diversified Corporate Consulting Group, LLC, shall have a right of
first refusal to arrange all financing for the Company and its
affiliates (whether debt or equity, foreign or domestic), during the
initial 12 months of this engagement and shall be kept apprised of all
capital raising activities by the Company, whether on a debt or equity
basis.
7. (a) The Company shall supply Diversified Corporate Consulting
Group, LLC, on a regular and timely basis with all approved
data and information about the Company, its management, its
products, and its operations and the Company shall be
responsible for advising Diversified Corporate Consulting
Group, LLC of any fact which would affect the accuracy of any
prior data and information supplied to Diversified Corporate
Consulting Group, LLC.
(b) The Company shall use its best efforts to promptly supply
Diversified Corporate Consulting Group, LLC with full and
complete copies of all filings with all federal and state
securities agencies; with full and complete copies of all
shareholder reports and communications whether or not prepared
with Diversified Corporate Consulting Group, LLC's assistance,
with all data and information supplied to any analyst,
broker-dealer, market maker, or other member of the financial
community; and with all product/services brochures, sales
materials, ETC.
(c) The Company shall promptly notify Diversified Corporate
Consulting Group, LLC of the filing of any registration
statement for the sale of securities and/or of any other event
which triggers any restrictions on publicity.
(d) The Company shall notify Diversified Corporate Consulting
Group, LLC if any information or data supplied by the Company
to Diversified Corporate Consulting Group, LLC has not been
released or promulgated to the public.
(e) The Company shall be deemed to make a continuing
representation of the accuracy of any and all material facts
material, information, and data which it supplies to
Diversified Corporate Consulting Group, LLC and the Company
acknowledges its awareness that Diversified Corporate
Consulting Group, LLC.
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Diversified Corporate Consulting Group, LLC
Mr. James R. Shaw
May 30, 1996
Page 5
will rely on such continuing representation in disseminating
such information and otherwise performing its functions under
this engagement letter.
(f) Diversified Corporate Consulting Group, LLC, in the absence of
notice in writing from the Company, may rely on the continuing
accuracy of material, information and data supplied by the
Company.
8. Final drafts of any matters prepared by us will be reviewed by you and,
if legally required, by legal your counsel, to assure that:
(a) All required information has been provided;
(b) All materials are presented accurately; and,
(c) That no materials required to render information provided "not
misleading" are omitted.
Only after such review and approval by you and, if required, your legal
counsel, will any documents be filed with regulatory agencies or
provided to third parties. Financial data will be reviewed by
competent, independent, certified public accountants to be separately
retained by you. If required by you, we will assist in selection and
supervision of such attorneys and accountants. Such accountants will be
required to review and approve all financially related filings, prior
to submission to the appropriate regulatory authorities.
9. In the event our services are provided for the benefit of juridical
entities other than the Company, no materials for which we are
responsible will be submitted to third parties until they have been
reviewed and approved as to form and content by all executive officers,
directors, partners, joint venturers or persons performing similar
roles for the subject juridical entity. The filing of materials
prepared by us with any governmental agency or provision of copies
thereof to other persons shall be deemed presumptive evidence that our
materials have been reviewed and approved as heretofore described.
DUE DILIGENCE MATERIALS
We will upon receipt of a signed copy of this engagement letter,
provide you with the following materials:
1. Officers and Directors Questionnaires to be completed by all officers,
directors and
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Diversified Corporate Consulting Group, LLC
Mr. James R. Shaw
May 30, 1996
Page 6
principal consultants to entities for which we perform services at your
request, and then returned to us;
2. A Company Questionnaire to be completed by a knowledgeable person or
persons designated by entities for which we perform services at
your request and then returned to us;
3. A memorandum prepared by us acquainting you with the requirements of
Securities and Exchange Commission Regulation S-B, which governs the
bulk of required Securities and Exchange Commission disclosure, both in
conjunction with fund raising activities and with periodic reporting
obligations.
* * *
In the event that you desire different arrangements, either in general
or for specific projects, we will be glad to consider your proposals; however,
all contrary arrangements must be memorialized in a written instrument signed by
this firm. Please sign a copy of this transmission and return it to us by
facsimile transmission to (352) 245-5913. Please also complete and return the
enclosed client data sheet.
We look forward to a pleasant and mutually profitable relationship.
Very truly yours,
DIVERSIFIED CORPORATE CONSULTING GROUP, LLC
/s/ William A. Calvo, III
William A. Calvo, III
MANAGING MEMBER
THE FOREGOING IS HEREBY ACCEPTED, AS OF THE DATE FIRST ABOVE WRITTEN.
/s/ James R. Shaw
Mr. James R. Shaw
PRESIDENT
CLASSIC RESTAURANTS, INC.
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Diversified Corporate Consulting Group, LLC