BBK
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CORPORATE STRATEGIC REVITALIZATION
& FINANCIAL CONSULTING
August 2, 2000
Mr. Joseph H. Kiser
Chairman of the Board of Directors
Vari-L Company, Inc.
4895 Peoria Street
Denver, CO 80239
SUBJECT: BBK ENGAGEMENT LETTER
Dear Mr. Kiser:
Based on my recent discussion with Ms. Sarah L. Booher, a member of
the Board of Directors of Vari-L Company, Inc. ("Vari-L" of the
"Company"), this letter will serve to confirm the engagement of BBK, Ltd.
("BBK") by the Company to perform certain services as independent
professionals. We are pleased to have the opportunity to provide
financial consulting and related services to you and are confident that
you will be pleased with the services described in this letter.
BBK provides a full range of financial and management consulting
services to our clients. BBK's staff consists of Certified Turnaround
Professionals, Certified Public Accountants, professionals experienced in
operational and financial consulting throughout the United States, Canada
and Mexico and a support staff that facilitates thorough and timely
documentation of the services being performed.
The services that BBK will perform are listed below.
1. Peter Pappas, a Principal and an employee of BBK, will serve as the
interim Chief Executive Officer ("Interim CEO") of the Company until
such time that the Board of Directors of the Company notifies Mr.
Pappas in writing that his services as the Interim CEO are no longer
required.
2. Tim Skillman, a Principal and an employee of BBK, will assist the
Company on an as needed basis in various matters as an advisor to the
Company.
3. BBK will provide a BBK employee to serve as the interim Chief
Financial Officer ("Interim CFO") of the Company until such time that
the Board of Directors of the Company notifies that Interim CFO in
writing that his or her services as the Interim CFO are no longer
required.
4. BBK will provide such other services as may be required or requested
by the Board of Directors of Vari-L from time to time.
It is our understanding that BBK is being retained by you as
confidential independent financial advisors, and BBK (and any officers,
stockholders, principals, employees or representatives thereof) accepts no
responsibility regarding the accuracy and/or completeness of financial
information and other reports not prepared by us or based in whole or in
part upon inaccurate and/or incomplete information provided during our
review of the Company's books and records. Further, in connection with
our rendering services to you, we undertake no responsibility for any
liabilities to taxing authorities and/or other creditors of the Company.
BBK shall put forth commercially reasonable efforts in rendering
professional services to the Company, but we cannot guarantee the
projected results of the Company's future financial operations.
The Company shall maintain adequate officers liability insurance for
the protection of officers, including Peter Pappas and/or any BBK
Professionals who may serve as an officer of the Company, against acts
arising from their duties as an officer for which they become personally
liable and are not compensated by the Company pursuant to any other
indemnification provision.
In addition to the consideration herein described and in order to
induce BBK to enter into this engagement with the Company, the Company
hereby agrees to indemnify, protect, defend and hold Peter Pappas, any
other BBK employee designated as an officer of the Company, BBK, as well
as BBK's partners, principals, officers, shareholder, managers, advisors
and other agents and their respective partners, trustees, beneficiaries,
employees, and any successor or assign of any of the foregoing
(individually and collectively, the "Indemnified Parties") harmless from
and against any and all liabilities, demands, actions, causes of action,
suits, claims, alleged claims, losses, damages, costs and expenses
(including, without limitation, attorneys' fees, court costs and
litigation expenses) (excluding consequential damages) suffered or
incurred by any of the Indemnified Parties as a result of (i) this
engagement, (ii) any act or omission on the part of the Company (or any
officer, director, shareholder, employee, agent or representative
thereof), (iii) any personal injury and/or property damage caused by the
Company (or any officer, director, shareholder, employee, agent or
representative thereof), and (iv) any breach by the Company of any
obligation herein stated. Provided, however, the Company shall have no
obligation hereunder for the gross negligence and/or willful misconduct,
as determined by final judgment of a court of competent jurisdiction, of
any Indemnified Party. Notwithstanding any other provision of this Letter
to the contrary, the indemnity granted by Company under this paragraph
shall survive the expiration or termination of this Letter and the
engagement herein described.
BBK's services will be provided to you at the following rates:
B. N. Bahadur $350.00 per hour
Peter Pappas $295.00 per hour
Tim Skillman $295.00 per hour
Other Principals $295.00 per hour
Keith Francis or Kris Andrews $250.00 per hour
Other Managers $250.00 per hour
Senior Consultants $220.00 per hour
Consultants $170.00 per hour
Analysts $125.00 per hour
Para-Professional Staff $70.00 per hour
Mileage $0.31 per mile
It is our normal practice to submit billings for our services on a
weekly basis, which are payable upon presentation. Our fees are
accumulated based on the number of hours incurred multiplied by the hourly
rate assigned to the persons performing the services, plus necessary out-
of-pocket expenses. We require a retainer in the amount of $60,000, which
will be applied toward our last and final billing. It is our
understanding that the Interim CEO and Interim CFO positions are full-time
positions and that the Interim CEO, the Interim CFO and/or other BBK staff
assigned to this engagement may return to Detroit once per week at the
expense of the Company during the duration of the engagement. We
anticipate that this engagement will be completed in not more than six
months from the time of its commencement. Of course, if the needs of the
Company extend beyond six months, then BBK will use commercially
reasonable efforts to meets those needs.
If the foregoing correctly states the basis of our agreement, please
execute both copies of this letter, retaining a copy for your files and
returning a copy to our office, together with a check in the amount of
$60,000. Again, we appreciate having the opportunity to serve your needs
and are prepared to commence this engagement immediately.
Very truly yours,
BBK, LTD.
/s/ Peter Pappas
Peter Pappas
Agreed to and accepted by:
VARI-L COMPANY, INC.
By: /s/ Joseph H. Kiser Date: 8-2-00
Mr. Joseph H. Kiser, its Chairman of the Board
300 Galleria Officecentre, Suite 103 Southfield, MI 48034 248.356.0800
Fax 248.356.5441
