General Terms and Conditions Applicable to Representation

The following general terms and conditions are applicable to and incorporated by reference into the Term Sheet and together the Term Sheet and these General Terms and Conditions form the complete “Finder Agreement” between Breakfast Network Productions, Inc. a/k/a First Degree and (“First Degree” ) and Client.  All terms not defined below are used as defined in the Term Sheet between the parties.

1. THE REPRESENTATION PERIOD. Client grants to First Degree the non-exclusive right to introduce Client to potential Customers for the Term.

2. SCOPE OF SERVICES. First Degree will represent and assist Client in identifying prospective Customers.  "Customer" as used in these General Terms includes any individual or entity entering into any business relationship with Client which includes the direct and/or indirect payment of money or other value to Client or any individual or entity affiliated with Client, purchasers, tenants, exchangers, optionees and any other categories of potential or actual transferees of any interest in any part of the Business or of any interest in Client and those involved in the creation of other interests involving the Business.   

First Degree 's services shall be set forth in the Term Sheet, and may include any or all of the following:

(a) Developing (with Client) a list of prospective Customers;

(b) Preparing a memorandum, which will describe the Customers;

(c) Counseling Client as to the structure and form of the proposed business opportunity;

(d) Working with Client to develop and implement a marketing plan.  First Degree’s marketing efforts may include advertising in newspapers, publications, computer networks or other media (and First Degree may make and use photographs of the Business for marketing purposes) and showing the Business to prospective Customers and others.

(e) Counseling Client as to strategy and tactics for initiating discussions and negotiating with a prospective Customers and participating in such discussions and negotiations;

(f) Assisting Client in negotiating definitive Customer agreements; and

(g) Any other activities First Degree deems necessary and reasonable to effect any proposed business opportunity.


3. COMPENSATION. Client agrees to pay a fee to First Degree for its services as set forth in the Term Sheet.  The right to payment shall be irrevocable during the Term.  Client understands and agrees that the right to payment means that even if Client, or any other person, finds the same Customer for Client as first introduced to Client by First Degree, Client must nonetheless pay First Degree the full amount of First Degree's fee.

First Degree’s Fee will be payable in readily available funds within thirty (30) days following the end of each calendar quarter and shall be calculated based upon cash or other value received, directly or indirectly, by Client during the immediately preceding calendar quarter.

Client understands and agrees that First Degree's fee will apply to all consideration received by Client, directly and indirectly, for all tangible and intangible property by any Customer, including, but not limited to: inventory of goods held for sale, work in progress and materials, accounts receivable, intellectual property and records of thereof (including, but not only, all designs, trade names and domain names), general intangibles (including, but not only, all goodwill, going concern value, customer and supplier-based intangibles, workforce in place and contract, franchise, lease, license or other property rights) and any non-compete, earn out or consulting agreements (exclusive of arrangements for services actually rendered.  Value other than cash shall be compensated at fair market value.

4. GENERAL COOPERATION. Client will cooperate with First Degree in carrying out the purpose of this Representation and Engagement Agreement.  Client will make the Business available for First Degree for demonstration to Customers and others (including First Degree’s salespeople and cooperating brokers) during reasonable times.

5. FURNISH ACCURATE INFORMATION. Client will provide promptly, upon request, all information and documentation reasonably deemed necessary or desirable by First Degree in connection with performing its services hereunder. Client represents and warrants to First Degree that all written materials and other furnished by it to First Degree will be correct and complete. Client understands and agrees that this information will be used by First Degree to seek Customers for the Business and that the information will be furnished to prospective Customers for the purposes of inducing prospective Customers enter into a business relationship with Client and that such prospective purchasers will rely on the information being correct and complete. Client understands and agrees that First Degree intends to use (pass on to prospective Customers, for example) the information furnished by Client without making an independent investigation into the accuracy of the information.

6.  ACCOUNTING/AUDIT. With each payment due hereunder, Client shall render accounting statements to First Degree which statements shall include sufficient detail as to Customers, volumes and sales price to enable First Degree to understand the basis for the calculation.  All such reports shall be accompanied by payment or any amounts due and owing First Degree as of the date of such reports. First Degree shall have thirty-six (36) months to commence an audit of the books and records of Client relating to any Customer or Second Level Customer.  Any such audit shall be made upon advance reasonable notice of not less than 30 days, and shall take place during normal business hours in a manner so as to minimize the business disruption to Client at the location Client maintains the relevant books and records.  Client shall make its books and records available and cooperate with such audit.  If, as a result of an examination, it is determined that the payments due hereunder are under-reported in excess of five percent (5%) of the total value set forth on the statement for that period, then Client will pay the reasonable cost of the audit in addition to making all payments due.

7. DISCLOSURE OF MATERIAL FACTS. Client represents and warrants that there are no facts known to Client materially affecting the Business or the ability of the Business to provide its products or services which are not readily observable upon non-intrusive inspection or not readily ascertainable from the written materials and other information furnished by Client.  Client understands and agrees that First Degree will disclose the above facts (and subsequently discovered/disclosed facts) to prospective Customers.  This paragraph is intended to include Client’s knowledge of any pending, current or threatened litigation that may have an affect on the Business.


8. UPDATES. Client agrees that during the term of this Representation and Engagement Agreement, Client will promptly notify First Degree of any matters affecting any of Client's representations or warranties under this Representation and Engagement Agreement.

9. INDEMNIFY. Client shall indemnify and hold First Degree, and its officers, directors, shareholders, agents, representatives, employees, attorneys and assigns harmless from and against all liabilities, claims, actions, damages, fines, expenses, costs, and any other losses, including reasonable attorney's fees, incurred by First Degree, arising as a result of or in connection with the Finder Agreement (including, for example, alleged liability based on the relationship of the parties, breach. misrepresentation, furnishing incorrect or incomplete information, undisclosed material facts affecting the Business) or the activities, status, condition, operations, liabilities, debts or obligations of Client or the Business.  This provision will survive (remain independently binding and enforceable after) termination (expiration, cancellation or completion, for example) of this Representation and Engagement Agreement.

10. DISPUTES. This Agreement shall be governed by and interpreted in accordance with the laws of New York without regard to conflict of laws. All disputes arising from or relating to this Agreement shall be heard in a court of competent jurisdiction within the City of New York, and the parties hereto consent to personal jurisdiction in such courts for such purposes, and further waive all objections on grounds of improper venue or forum non conveniens. The prevailing party shall be entitled to recover its reasonable costs and expenses, including reasonable attorney’s fees.

11. METHOD OF PAYMENT.  All monies payable under this Agreement shall be in U.S. dollars and shall be made as set forth on the Term Sheet.

12. CONFIDENTIALITY.  The parties acknowledge that each may have access to and become acquainted with the Proprietary Information (as defined below) of the other party hereto.  The receiving party agrees that it will not disclose any of the aforesaid, directly or indirectly, or use any of it in any manner, either during the term of this Agreement or at any time thereafter, except as required hereunder.  All Proprietary Information shall remain the exclusive property of the disclosing party. The obligation of confidentiality shall not apply to the extent disclosure is or may be required by a statute, by a court of law, by any governmental agency having supervisory authority over the business of the receiving party or by any administrative or legislative body (including a committee thereof) with jurisdiction to order the receiving party to divulge, disclose or make accessible such information, provided, however, that the receiving party shall give the disclosing party notice of any such request or demand for such information upon receipt of same and shall reasonably cooperate with the disclosing party in any application it may make seeking a protective order barring disclosure.  The receiving party acknowledges that the Proprietary Information constitutes a unique and valuable asset of the disclosing party, and that any disclosure or other use of the Proprietary Information other than for the sole benefit of the disclosing party could cause irreparable harm to the disclosing party. “Proprietary Information” shall mean all of the disclosing party’s proprietary information, technical data, trade secrets, and know-how, including, without limitation, research, product plans, customer lists, information and plans about costs, profits, markets and sales, ideas, technology, designs, drawings, business strategies and financial data and information, whether or not marked as “Confidential” or “Proprietary.”  “Proprietary Information” shall also mean any and all information received by the disclosing party from customers of the disclosing party or other third parties subject to a duty to be kept confidential.


13.  CONFLICTS OF INTEREST; NON-HIRE PROVISION.  The parties represents that they are free to enter into this Agreement, and that doing so does not violate the terms of any agreement between them and any third party.  For a period of one year following the termination or expiration of this Agreement, neither party hereto shall, directly or indirectly hire, solicit, or encourage to leave any employee, consultant, or contractor of the other or hire any such employee, consultant, or contractor who has left the other within one year of such employment or engagement.  Client expressly acknowledges that First Degree shall be providing services to third parties similar to or identical with those it shall provide hereunder, including on behalf of third parties who may be directly competitive with Client.

14.  INDEPENDENT CONTRACTORS.  This Agreement does not constitute and shall not be construed as constituting a partnership or joint venture between First Degree and Client. Neither party shall have any right to obligate or bind the other party in any manner whatsoever, and nothing herein contained shall give, or is intended to give, any rights of any kind to any third persons.  The parties are and will remain independent contractors.

15. STATEMENT OF CONTINGENT AND LIMITING CONDITIONS.  First Degree's services constitute neither an audit nor a verification of the Client's underlying financial records. First Degree has relied, without independent verification, on the accuracy, completeness, and fairness of all financial and other information that was publicly available or furnished to First Degree by Client and Client’s accountants and legal counsel.  It is understood that Client is not relying on First Degree for legal, tax or accounting advice.  First Degree has neither appraised nor otherwise independently determined the value of any Business property.  Due to the economic and individual motivational influences, which may impact on the Business, First Degree makes no representations and assumes no responsibility for the actual income to be realized by Client.  Client understands that this Representation and Engagement Agreement does not guarantee consummation of any Customer relationship by Client.

Client understands that First Degree makes no representations or warranties about any Customer or that it shall obtain any Customers for Client.

16.  REPRESENTATION BY COUNSEL.  The parties represent and acknowledge that they were represented by and obtained advise of counsel in negotiating and entering into the Term Sheet and these general terms and conditions, or knowingly chose to waive their right to do so.

17.  WAIVER.  The failure of either party at any time or times to demand strict performance by the other of any of the terms, covenants or conditions set forth herein shall not be construed as a continuing waiver or relinquishment thereof and each may at any time demand strict and complete performance by the other of said terms, covenants and conditions.

18.  WARRANTY DISCLAIMER.  FIRST DEGREE MAKES NO WARRANTIES TO CLIENT OR ANY CUSTOMER OR OTHER THIRD PARTY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

19.  LIMITATION OF LIABILITY.  UNDER NO CIRCUMSTANCES SHALL FIRST DEGREE BE LIABLE TO CLIENT OR ANY CUSTOMER FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF FIRST DEGREE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCES SHALL PRODUCER HAVE ANY LIABILITY WHATSOEVER FOR ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ITS PERFORMANCE IN EXCESS OF THE TOTAL SUMS PAID BY CLIENT TO FIRST DEGREE HEREUNDER.

20.  BANKRUPTCY.  If Client shall become bankrupt or insolvent, or if Client’s business shall be placed in the hands of a receiver or trustee, whether by voluntary act of Client or otherwise, the Finder Agreement shall, at the option of First Degree, immediately terminate.

21.  ASSIGNMENT.  The rights granted to the parties hereunder are personal and shall not, without the prior written consent of the other party, be transferred or assigned to any other party.

22.  FORCE MAJEURE.  A party to this Agreement shall not be responsible or liable to the other party if the first party is prevented, hindered or delayed by reasons of any force majeure circumstances to perform its contractual obligations according to this Agreement. In this clause, "force majeure circumstances" shall mean any war, riot, social disturbance, act of God, strike, lockout, trade dispute or labor disturbance, accident, breakdown of plant or machinery, fire, flood, difficulty in obtaining workmen or materials or transportation, or any other circumstances whatsoever outside the control of the party.

23.  SIGNIFICANCE OF HEADINGS.  Section headings contained herein are solely for the purpose of aiding in speedy location of subject matter and are not in any sense to be given weight in the construction of this Finder Agreement.  Accordingly, in case of any question with respect to the construction of this Finder Agreement, it is to be construed as though such section headings had been omitted.

24.  ENTIRE AGREEMENT.  These General Terms and Conditions together with the Term Sheet constitute the entire Finder Agreement between the parties hereof  concerning its subject matter hereof and supersedes all prior statements, discussions, promises, and representations, whether written or oral.  No waiver, amendment or other modification of these General Terms and Conditions shall be effective unless in writing and signed by each party to be bound thereby.  If any provision of the Finder Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the validity or enforceability of any other part or provision of the Finder Agreement.