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Financial Advisory And Investment Banking Agreement

This is an actual contract by Harvey Electronics.

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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: April 06, 1998
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This Agreement is made and entered into as of the 6th day of April 1998 by and between The Thornwater Company, L.P. ("Consultant"), and Harvey Electronics, Inc., a New York corporation (the "Company").

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Purpose: The Company hereby engages Consultant for the term specified in Paragraph 2 hereof to render consulting advice to the Company as an investment banker relating to financial and similar matters upon the terms and conditions set forth herein.

2. Term: Except as otherwise specified in Paragraph 4 hereof, this Agreement shall be effective for a three (3) year period commencing April 6, 1998 and ending on April 5, 2001.

3. Duties of Consultant: During the term of this Agreement, Consultant shall seek out Transactions (as hereinafter defined) on behalf of the Company and shall furnish advice to the Company in connection with any such Transactions.

4. Compensation: In consideration for the services rendered by Consultant to the Company pursuant to this Agreement (and in addition to the expenses provided for in Paragraph 5 hereof), the Company shall compensate Consultant as follows:

(a) The Company shall pay Consultant a fee of $3,435 per month for the term of this Agreement. The aggregate sum of $123,660 shall be due and payable upon the execution of this Agreement.

(b) In the event that any Transaction occurs during the term of this Agreement or, to the extent provided in paragraph 4(d) hereof, one year thereafter, the Company shall pay fees to Consultant as follows:

Consideration Fee

$0 to $ 500,000 Minimum Fee of $25,000

$500,000 to $5,000,000 5% of Consideration

$5,000,000 or more $250,000 plus 1% of the Consideration in excess of $5,000,000

For the purposes of this Agreement, "Consideration" shall mean the total market value on the day of the closing of stock, cash, assets and all other property (real or personal) exchanged or received, directly or indirectly by the Company or any of its security holders in connection with any Transaction. Any co-broker retained by Consultant shall be paid by Consultant.

(c) For the purposes of the Agreement, a "Transaction" shall mean (i) any transaction originated by Consultant, other than in the ordinary course of trade or business of the Company, whereby, directly or indirectly, control of the Company or any of its businesses , is transferred for Consideration, or (ii) any transaction originated by Consultant whereby the Company acquires any other company or the assets of any other company or a controlling interest in any other company (an "Acquisition").

In the event Consultant originates a line of credit with a lender or a corporate partner, the Company and Consultant will mutually agree on a satisfactory fee and the terms of payment of such fee. In the event Consultant, at the Company's request, introduces the Company to a joint venture partner or customer and sales develop as a result of the introduction, the Company agrees to pay a fee of five percent (5%) of total sales generated directly from this introduction during the first two years following the date of the first sale. Total sales shall mean gross receipts less any applicable refunds, returns, allowances, credits, taxes and shipping charges and monies paid by the Company by way of settlement or judgment arising out of claims made by or threatened against the Company. Commission payments shall be paid on the 15th day of each third month following the receipt of customers' payments. In the event any adjustments are made to the total sales after the commission has been paid, the Company shall be entitled to an appropriate refund or credit against future payments under this Agreement.

(d) All fees to be paid pursuant to this Agreement, except as otherwise specified, are due and payable to Consultant in cash or company check at the closing or closings of any Transaction specified in Paragraph 4. In the event that this Agreement shall not be renewed or if terminated for any reason, notwithstanding any such non-renewal or termination, Consultant shall be entitled to a full fee as provided under Paragraphs 4 and 5 hereof, for any Transaction for which the discussions were initiated during the term of this Agreement and which is consummated within a period of twelve months after non-renewal or termination of this Agreement. Nothing herein shall impose any obligation on the part of the Company to enter into any Transaction.

5. Expenses of Consultant: In addition to the fees payable hereunder and regardless of whether any Transaction set forth in Paragraph 4 hereof is proposed or consummated, the Company shall reimburse Consultant for the reasonable fees and disbursements of Consultant's counsel and Consultant's reasonable travel and out-of-pocket expenses incurred in connection with the services performed by Consultant pursuant to this Agreement and at the request of the Company, including without limitation, hotels, food and associated expenses and long-distance telephone calls, except that all expenses exceeding $500 must be pre-approved in writing by the Company.

6. Liability of Consultant: The Company acknowledges that all opinions and advice (written or oral) given by Consultant to the Company in connection with Consultant's engagement hereunder are intended solely for the benefit and use of the Company in considering the Transaction to which they relate, and the Company agrees that no person or entity other than the Company shall be entitled to make use of or rely upon the advice of Consultant to be given hereunder, and no such opinion or advice shall be used for any other purpose or reproduced, disseminated, quo
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