EXHIBIT 10
(Letterhead)
American Inflatables, Inc.
947 Newhall Street
Costa Mesa, CA 92627
Alan Berkun, Esq.
17 State Street / 5th Floor
New York, NY 10004
Re: Engagement
Dear Mr. Berkun:
We are pleased to confirm the arrangements under which Alan Berkun (The
"Consultant") is engaged by American Inflatables, Inc. (the "Company") to
identify acquisition targets for the Company and to advise the Company in
structuring mergers or other acquisition to which the Company is a party (the
"Transaction").
The Consultant and the Company agree as follows with respect to the
Transaction:
1. SERVICING. During the Term (as hereinafter defined), the Consultant
shall render such services to the Company so as assist the Company in
identifying acquisition targets for the Company and advise the Company
in structuring mergers or other acquisitions. Furthermore, the
consultant will review and advise management in reference to executive
compensation. Nothing contained herein constitutes a commitment on the
part of the Consultant to find an acquisition target for the company
or, if such a target is found, that any Transaction will be completed.
The Consultant shall not have the power of authority to bind the
Company to any transaction without the Company's prior written
consent.
2. TERM OF ENGAGEMENT. Either party hereto may terminate this Agreement
at any time after the date hereof, with or without cause, upon fifteen
(15) days written notice to the other party (the "Term").
3. ENGAGEMENT FEE. Upon the execution of this Agreement, the Company
shall pay to the Consultant a fee (an "Engagement Fee") of four
hundred thousand (400,000) shares of the Company's common stock (the
"Shares"), which amount shall not be refundable.
4. REGISTRATION RIGHTS. The Company hereby covenants and agrees to
immediately file, from the date hereof, a registration of Form S-8
with the Securities and Exchange Commission with respect to the
Shares, including a reoffer prospectus, to the extent required.
5. FURTHER ASSURANCES. In connection with the issuance of the Shares of
Common Stock of the Company to the Consult pursuant to this Agreement
of the issuance of shares of common stock of the Company to the
Consultant as a Transaction Fee, the Consultant covenant and agrees
that he shall execute and deliver, or cause to be executed and
delivered, any and all
1
Such further agreements, instruments, certificates and other
documents, including the Subscription Agreement, a copy of which is
annexed hereto as Annex A, and shall take or cause to be taken any and
all such further action, as the Company may reasonably deem necessary
or desirable in order to carry out the intent and purpose of this
Agreement.
6. INDEMNIFICATION. Each party agreed to indemnify and hold the other
harmless from any loss, damage, liability or expense, including
reasonable attorney's fees and other legal expenses, to which the
other party may become subject arising out of or relating to any act
or omission by the indemnifying party (or any person connected or
associated with the indemnifying party), which is or is alleged to be
a violation of any applicable statues, laws or regulations or arising
from the negligence of willful misconduct of the indemnifying party.
7. COOPERATION CONFIDENTIALITY. During the term of this Agreement, the
Company shall furnish the Consultant with all information, data, or
documents concerning the Company that the Consultant shall reasonably
deem appropriate in connection with his activities hereunder, other
than material non-public information.
8. NOTICE. All notice, requests demands and other communications under
this Agreement shall be in writing, and shall be deemed to have been
duly given (a) on the date of service, if served personally on the
party to whom notice is to be given, (b) on the day after the date
sent by a recognized overnight courier service with all charges
prepaid or billed to the account for the sender, (c) five (5) days
after being deposited in the mail if sent by first-class air mail,
registered or certified, postage prepaid, or (d) on the day after the
date set forth on the transmission receipt when sent by facsimile
transmission to the party being notified at its address or facsimile
numbers as any party hereto shall subsequently notify all other
parties hereto in writing.
(i) If the Consultant:
Alan Berkun, Esq.
17 State Street, 5th Floor
New York, NY 10004
(ii) If to the Company:
American Inflatables, Inc.
947 Newhall Street
Costa Mesa, CA 92627
9. NON-ASSIGNABILITY BINDING EFFECT. Neither this Agreement, nor any of
the rights or obligations of the parties shall be assignable by either
party hereto without the prior written consent of the other party.
Otherwise, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs. Executors,
administrators, personal representatives, successors, and permitted
assignees.
2
10. CHOICE OF LAW. This Agreement shall be governed and enforced in
accordance with the laws of the State of New York, without regard to
its conflict of law principles.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersedes
all other agreements between the parties hereto relating to the
subject matter set forth herein. The covenants and agreements of the
parties hereto and upon which the parties have relied and except as
may be specifically provided herein, no change, modification,
amendment, addition or termination of this Agreement or any part
thereof shall be valid unless in writing and signed by or in behalf of
the party to be charged therewith.
Please indicate your agreement to the foregoing by signing and returning to us
the enclosed copy of this letter, whereupon this letter shall become a binding
agreement.
American Inflatables, Inc.
/s/ Gregg Mulholland
By: -------------------------------
Gregg Mulholland/President, CEO
Consultant
/s/ Alan Berkun Esq.
By: --------------------------------
Alan Berkun, Esq.