Engagement Letter and Compensation Agreement - AME Torrey View LLC and Irving Hughes
[IRVING HUGHES LOGO]
ENGAGEMENT LETTER AND COMPENSATION AGREEMENT
This Agreement is entered into May 6, 2002 (the "Effective Date") by and
between AME TORREY VIEW, LLC ("Principal"), and IRVING HUGHES
("Broker"). In consideration of the mutual covenants contained herein,
it is agreed as follows:
I. ENGAGEMENT OF AGENT
Broker shall cause Shaun Burnett to at all times be the principal agent
for Broker working on Principal's behalf. Principal does hereby engage
Broker to negotiate the purchase and development of real property
("Property") for a new facility ("Project") in San Diego and to perform
the services in Section II. Broker shall have no authority to obligate
Principal in any way.
II. ACCEPTANCE OF ENGAGEMENT
Broker does hereby accept the foregoing engagement and agrees to use its
good faith efforts on behalf of Principal to perform the following
services:
- Programming/needs assessment
- Market evaluations/surveys
- Locate and present sites
- Management of Architect, General Contractor and other Third Party
Contractors and Vendors
- Assistance with City and County permitting process
- Assistance with establishing and maintaining a Project Budget and
Construction Schedule
- Assistance with business terms, negotiations and structuring
- Financial analysis and comparisons
- Lease contract review
- Facilities planning
- Project management for the duration of the Project as Co-Project
manager with Principal's Associate Director of Facilities and Jim
Purvis of San Diego Realty Advisors
III. COMPENSATION
Principal shall pay to Broker the amount of $1,500,000 per the following
schedule:
<TABLE>
<S> <C>
- Close of Property: 1st payment of $250,000 due and payable
- Issuance of a Certificate of Occupancy 2nd payment of $1,250,000 due and
for the Project authorizing use of the payable
Project for Principal's intended use:
</TABLE>
IV. TERM AND TERMINATION RIGHTS
A. TERM. The term of this agreement (this "Agreement") shall commence on
the Effective Date and continue until the later of (i) twenty four (24)
months after the Effective Date, or (ii) the issuance of the Certificate
of Occupancy for the Project authorizing use of the Project for
Principal's intended use.
B. BROKER'S TERMINATION FOR CAUSE. If Principal believes that Broker has
breached any of the representations and covenants made in this Agreement
through fraud, gross negligence or willful misconduct, Principal shall
provide Broker with written notice setting forth the nature of the
alleged breach and evidence in support. Broker shall then have ten (10)
days in which to correct the
<PAGE>
problem to the satisfaction of Principal, or to provide a written
explanation of the status of Broker's compliance. If, after Broker's
response to such notice, the parties continue to disagree regarding
Broker's compliance, the parties shall submit the issue for resolution
to a jointly selected, neutral third party. If the jointly selected,
neutral third party determines Broker has breached this Agreement or any
of the representations or covenants made herein through fraud, gross
negligence or willful misconduct, Principal shall compensate Broker only
for those Phases that have been completed and satisfied as of the date
of the termination of this Agreement, as more particularly set forth in
the pro-rated compensation schedule below:
<TABLE>
<S> <C> <C>
- Phase One: Close of Property $375,000
- Phase Two: Recordation Of Loan And Commencement Of Any Construction $375,000
- Phase Three: Completion of Shell Construction $375,000
- Phase Four: Certificate of Occupancy for the Project by
the City of San Diego Authorizing Use of the
Project for Principal's Intended Purpose $375,000
</TABLE>
In no event shall Broker be entitled to receive from Principal any
compensation allocable to Phases that have not been completed and
satisfied as of the date of the termination of this Agreement.
V. ETHICS CLAUSE
Broker does not accept any referral fees or compensation from any vendor
including contractors, architects, moving companies, furniture vendors
and other consultants.
VI. INDEMNIFICATION
Each party hereto ("Indemnitor") shall and hereby does agree to
indemnify, defend and hold harmless the other party ("Indemnitee") and
Indemnitee's partners, officers, employees, agents, successors and
assigns from and against all demands, liabilities, causes of action,
judgments, costs, claims, losses, and expenses, or any combination
thereof, including attorneys' fees, of any nature, kind or description
(collectively, "Liabilities") arising out of, or caused by, or resulting
from the negligent or wrongful acts or omissions or failure to comply
with the terms of this Agreement by Indemnitor or Indemnitor's officers,
partners, agents, employees, successors or assigns. If any Liabilities
arise or are made, asserted or threatened against Broker or Broker's
officers, partners, agents, employees, successors or assigns, Principal
shall have the right to withhold from any commission due an amount
sufficient in Principal's judgment to protect against and satisfy such
Liabilities.
VII. DISPUTES
In the event a claim or controversy arises concerning any provision of
this Agreement, the parties hereby agree that such claim or controversy
shall be settled by final, binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. In the event any legal action to
enforce an arbitration award is commenced, or if other litigation is
commenced regarding this Agreement, the prevailing party shall be
entitled to recover its expenses and reasonable attorneys' fees incurred
therein from the unsuccessful party.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
indicated above.
IRVING HUGHES AME TORREY VIEW, LLC
("BROKER") A CALIFORNIA LIMITED LIABILITY COMPANY
("PRINCIPAL")
By: /s/ Craig Irving By: APPLIED MOLECULAR
-------------------------- EVOLUTION, INC.
Name: Craig Irving a Delaware corporation
Title: Principal Its: Manager
By: /s/ Lawrence E. Bloch M.D.
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Name: Lawrence E. Bloch, M.D.
Title: Chief Financial Officer
Date: April 29, 2002 Date: May 6, 2002
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