MOTORCAR PARTS & ACCESSORIES INC
EXHIBIT 10.43
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>4
<FILENAME>v91147exv10w43.txt
<DESCRIPTION>EXHIBIT 10.43
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.43
July 17, 2002

Personal and Confidential

Mr. Selwyn Joffe
and
Mr. Anthony Souza
Motorcar Parts & Accessories, Inc.
2929 California Street
Torrance, CA 90503

Dear Messrs. Joffe and Souza:

         This letter confirms the understanding and agreement (the "Agreement")
between Motorcar Parts & Accessories, Inc. (together with its subsidiaries and
affiliates, the "Company") and Houlihan Lokey Howard & Zukin Capital ("Houlihan
Lokey"). Houlihan Lokey's engagement as described herein will include providing
certain consulting services to Company with respect to its business, which may
'include consultation in connection with any potential Transactions. For
purposes of this Agreement, the term "Transaction" shall include any of the
following: (i) the obtaining of financing for the Company or any of its
subsidiaries, whether in the form of subordinated or senior debt, equity or
equity equivalents, and whether or not such financing is arranged on a public or
private basis (a "Financing Transaction"); (ii) a licensing, joint venture or
other partnership transaction which provides the Company the night to receive
other strategic consideration including but not limited to consideration
received from long term exclusive and non exclusive licensing relationships with
third parties (a "Strategic Transaction"); (iii) the purchase by the Company of
all or substantially all of the stock or assets of another business for cash or
other valuable consideration (an "Acquisition Transaction"); or (iv) any merger,
consolidation, tender or exchange offer, leveraged buyout, leveraged
recapitalization, or sale of assets or equity interests, or similar transaction
involving all or a substantial part of the business, assets or equity interests
of the Company and/or its subsidiaries and affiliates in one or more
transactions (each, a "Sale Transaction")

         1 . Engagement; Services; Term. The Company hereby retains Houlihan
Lokey as its exclusive financial advisor to provide consulting and advisory
services, including the following:

         (a) Business Consultation: Houlihan Lokey will review the financial
condition and future prospects of the Company, conduct such investigations of
the Company's business and prospects as the parties reasonably determine are
necessary or appropriate, conduct such interviews with the Company's management
and directors as the parties reasonably determine are necessary or appropriate,
review any other matters which the parties deem relevant to assist and advise
the Company in its business and, in addition, provide advisory services in
conjunction with the Company's efforts in acquiring financing in the approximate
amount of $29,000,000 to "take out" the Company's cur rent credit facility with
Wells Fargo Bank.

         (b) Financial Advisory Services: Houlihan Lokey will provide financial
advisory services, including consultation in connection with one or more of any
Strategic Transaction,


                                       1
<PAGE>


Financing Transaction, Sale Transaction or Acquisition Transaction. Such
financial advisory services will include: (i) preparing a memorandum, a
management presentation and other documents and presentations as required; (ii)
soliciting, coordinating and evaluating indications of interest and proposals
regarding one or more of any Strategic Transaction, Financing Transaction, Sale
Transaction or Acquisition Transaction; (iii) advising and assisting the Company
in deciding whether to proceed with one or more of any Strategic Transaction,
Financing Transaction (which advice and assistance is substantial, e.g., the
placement of such financing), Sale Transaction or Acquisition Transaction; (iv)
negotiating the financial aspects, and facilitating the consummation, of one or
more of any Strategic Transaction, Financing Transaction, Sale Transaction or
Acquisition Transaction; and (v) providing such other financial advisory and
investment banking services reasonably necessary to accomplish the foregoing,
including the rendering of a fairness opinion if requested.

         The Company agrees that neither it nor its management, directors and
executive officers will engage in any discussions regarding a Transaction during
the term of this Agreement, except in cooperation with Houlihan Lokey. In the
event the Company or its management, directors or executive officers receives
any material inquiry regarding a Transaction, Houlihan Lokey will be promptly
informed of such inquiry so that it can evaluate such party and its interest in
a Transaction, and assist the Company in any resulting negotiations.

         This Agreement shall have an initial term of twelve (12) months, and
thereafter shall be automatically extended on a month to month basis unless
either party provides thirty days prior written notice of termination to the
other party; provided, however ' that no expiration or termination of this
Agreement shall affect (a) the Company's indemnification, reimbursement,
contribution and other obligations as set forth on Schedule A attached hereto,
(b) the confidentiality provisions set forth herein and Sections 69 hereof, and
(c) Houlihan Lokey's night to receive, and the Company's obligation to pay, any
and all fees and expenses due, and whether or not any Transaction shall be
consummated prior to or subsequent to the effective date of termination, all as
more fully set forth in this Agreement.

         2.       Fees and Expenses.

         (a) In exchange for Houlihan Lokey's consulting services pursuant to
Subsection (a) to Paragraph 1 above, the Company shall pay Houlihan Lokey a non
refundable consulting fee of $ 100,000 ("Consulting Fee") upon the mutual
execution of this Agreement.

         (b) In the event of any Financing Transaction, Acquisition Transaction
or Strategic Transaction, then the Company and Houlihan Lokey shall mutually
agree upon the appropriate market fee in exchange for its services in connection
therewith. The parties acknowledge that it is not contemplated that Houlihan
Lokey will receive any fee in connection with Houlihan Lokey's advisory services
under Section 1(a) above in connection with the Company's efforts in acquiring
financing in the approximate amount of $29,000,000 to "take out" the Company's
current credit facility with Wells Fargo Bank; provided, however, that if
Houlihan Lokey is called upon by the Company to provide a substantial portion of
the Financial Advisory Services as described 'in Section 1(b) above in
connection with the Company's efforts and such "take out" financing occurs
within the applicable time period provided by this Agreement, then the


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<PAGE>


Company and Houlihan Lokey shall negotiate in good faith on an appropriate
market fee in exchange for such Financial Advisory Services.

         (c) In the event Houlihan Lokey provides its financial advisory
services and investment banking services in connection with any Sale
Transaction, Houlihan Lokey shall be entitled to the following consideration:

                  (i) Upon the signing of a definitive purchase agreement or
similar document in connection with such Sale Transaction the Company shall pay
Houlihan Lokey a fee of $150,000 ("Progress Fee").

                  (ii) In addition to the foregoing Consulting Fee and Progress
Fee, upon the consummation of a Sale Transaction, the Company shall pay Houlihan
Lokey a cash fee ("Transaction Fee"), against which the Consulting Fee and
Progress Fee actually received by Houlihan Lokey will be credited, equal to:

<TABLE>
<S>                                                                    <C>
- For a Transaction Value up to $80 million:                           1.25%, plus
- For a Transaction Value from $80 to $100 million:                    3.0% of such incremental value, plus
- For a Transaction Value in excess of $100 million:                   5.5% of such incremental value.
</TABLE>


         For the purpose of calculating the Transaction Fee, the Transaction
Value shall be the total proceeds and other consideration paid or received, or
to be paid or received, in connection with a Transaction (which consideration
shall be deemed to include amounts in escrow), including, without limitation,
cash, notes, securities, and other property; payments made in installments;
amounts payable under any above market and out of the ordinary course consulting
agreements, employment contracts, non compete agreements or similar
extraordinary arrangements; and Contingent Payments (as defined below). If 50%
or more but less than all of the Company's equity interests are sold, the
Transaction Value shall be calculated as if 100% of the ownership of the equity
interests of the Company had been sold by dividing (i) the total consideration,
whether in cash, securities, notes or other forms of consideration, received or
receivable by the Company and/or its creditors and equity holders by (ii) the
percentage of ownership which is sold. In addition, if any of the Company's
interest bearing liabilities are assumed, decreased or paid off 'in conjunction
with a Transaction, or any of the Company's assets are retained, sold or
otherwise transferred to another party prior to the consummation of a
Transaction, the Transaction Value will be increased to reflect the fair market
value of any such assets or interest bearing liabilities. Contingent Payments
shall be defined as the fair market value of consideration received or
receivable by the Company, its employees and/or former or current equity holders
in the form of deferred performance based payments, "earn outs", or other
contingent payments based upon the future performance of the Company or any of
its businesses or assets.

In the case that less than 50% of the ownership of the equity interests of the
Company are sold in any Sale Transaction, then the Company and Houlihan Lokey
shall mutually agree upon the appropriate market Transaction Fee.


                                       3
<PAGE>


         For the purpose of calculating the consideration received in a
Transaction, any securities (other than a promissory note) will be valued at the
time of the closing of a Transaction (without regard to any restrictions on
transferability) as follows: (i) if such securities are traded on a stock
exchange, the securities will be valued at the average last sale or closing
price for the ten trading days immediately prior to the closing of a
Transaction; (ii) if such securities are traded primarily in over the counter
transactions, the securities will be valued at the mean of the closing bid and
asked quotations similarly averaged over a ten trading day period immediately
prior to the closing of a Transaction; and (iii) if such securities have not
been traded prior to the closing of a Transaction, Houlihan Lokey will prepare a
valuation of the securities, and Houlihan Lokey and the Company will negotiate
in good faith to agree on a fair valuation thereof for the purposes of
calculating the Transaction Fee. The value of any purchase money or other
promissory notes shall be deemed to be the face amount thereof. Notwithstanding
anything to the contrary contained herein, in the event the Transaction Value
includes any deferred payment, including, but not limited to, promissory note or
Contingent Payment, the Company and Houlihan Lokey will negotiate in good faith
in an attempt to agree on that portion, if any, of the Transaction Fee to be
paid to Houlihan Lokey as of the closing of the Transaction in consideration
thereof (it is acknowledged that the failure to so agree shall not constitute
the lack of good faith in negotiation). If the parties do not reach such an
agreement, then the pro rata portion of any Transaction Fee which is derived
from any deferred payment, including, but not limited to, promissory note or
Contingent Payment, shall be due and payable to Houlihan Lokey upon the time of
Company's receipt of such deferred amounts.

         If this Agreement is terminated by the Company for any reason other
than the material breach of Houlihan Lokey, and the Company consummates, or
enters into an agreement in principle to engage in (and which subsequently
closes), a Transaction within twelve (12) months after such termination date
with any party which Houlihan Lokey identified, contacted or with whom Houlihan
Lokey or the Company had discussions regarding a potential Transaction during
the term of this Agreement and which party is identified on a list of "Contacted
Parties" which Houlihan will prepare and deliver to Company within seven days
following the termination of the Agreement, Houlihan Lokey shall be entitled to
receive its Transaction Fee upon the consummation of such Transaction as if no
such termination had occurred.

         Additionally, and regardless of whether any Transaction is consummated,
Houlihan Lokey shall be entitled to reimbursement of their reasonable out of
pocket expenses incurred from time to time during the term hereof in connection
with the services to be provided under this Agreement, promptly after invoicing
the Company therefor but in no event greater than $50,000; provided, however,
upon the reimbursable expenses hereunder reaching $25,000, all subsequent such
expenses in excess of $2,500 shall require the Company's prior written approval.

         3. Information. The Company will furnish Houlihan Lokey with such
information regarding the business and financial condition of the Company as is
reasonably requested, all of which will be, to the Company's best knowledge,
accurate and complete in all material respects at the time furnished. The
Company further represents and warrants that any projections have been prepared
in good faith based upon assumptions which, in light of the circumstances under
which they are made, are reasonable. The Company will promptly notify Houlihan
Lokey if it


                                       4
<PAGE>


learns of any material misstatement in, or material omission from,
any information previously delivered to Houlihan Lokey. Houlihan Lokey may rely,
without independent verification, on the accuracy and completeness of all
information furnished by the Company or any other potential party to any
Transaction. The Company understands that Houlihan Lokey will not be responsible
for independently verifying the accuracy of such information, and shall not be
liable for any inaccuracies therein. Except as may be required by law or court
process, any opinions or advice (whether written or oral) rendered by Houlihan
Lokey pursuant to this Agreement are intended solely for the benefit and use of
the Company, and may not be publicly disclosed in any manner or made available
to third parties (other than the Company's management, directors, advisors,
accountants and attorneys) without the prior written consent of Houlihan Lokey,
which consent shall not be unreasonably withheld.

         Houlihan Lokey does not assume responsibility for the accuracy and
completeness of the Information, including, but not limited to, any disclosure
materials related to a Transaction, and Houlihan Lokey shall not be obligated to
conduct any independent study or investigation as to the accuracy or
completeness of the Information. The Company represents that the disclosure
materials will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading. In addition,
the Company represents and warrants that the Information will be true, complete
and correct in all material respects. The foregoing shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
Houlihan Lokey or any Indemnified Person (as defined elsewhere in this
agreement) or any person controlling any of them.

         The Company will furnish to Houlihan Lokey complete copies of all
relevant documents with respect to a Transaction filed with or submitted to any
regulatory agency prior to the consummation of a Transaction, and all such other
data, material and other information as Houlihan Lokey may reasonably request.
The Company will furnish to Houlihan Lokey, concurrently with their submission
to others, all material drafts of and a copy of the final disclosure materials
and financing and other documents related to a Transaction, and will keep
Houlihan Lokey apprised of changes in the terms of a Transaction on a timely
basis as they are decided upon.

         Houlihan Lokey acknowledges that, in connection with the services to be
provided pursuant to this Agreement, certain confidential, non public and/or
proprietary information concerning the Company ("Confidential Information") has
been or may be disclosed to Houlihan Lokey or its employees, attorneys and
advisors (collectively, "Representatives"). Houlihan Lokey agrees that no
Confidential Information will be disclosed, in whole or in part, to any other
person (other than to any potential party to a Transaction under appropriate
assurances of confidentiality contained in an executed customary nondisclosure
agreement, to those Representatives who need access to any Confidential
Information for purposes of performing the services to be provided hereunder
which Representatives shall be bound by equivalent non disclosure covenants, or
as may be required by legal process), without the Company's prior consent. The
term "Confidential Information" does not include any information: (a) that was
already in Houlihan Lokey's possession, or that was available to Houlihan Lokey
on a non confidential basis, prior to the time of disclosure by the Company to
Houlihan Lokey; (b)


                                       5
<PAGE>


obtained by Houlihan Lokey from a third person which, insofar as is known to
Houlihan Lokey, is not subject to any prohibition against disclosure; or (c)
which is or becomes generally available to the public through no fault of
Houlihan Lokey or any of its Representatives. Houlihan Lokey shall be liable to
the Company if any of its Representatives disclose any Confidential Information
'in breach of the foregoing provisions. Upon request, Houlihan Lokey agrees to
return to the Company any Confidential Information, except for Confidential
Information (i) incorporated into analyses, studies or other documents prepared
by Houlihan Lokey or its Representatives, which Confidential Information shall
continue to be held subject to the terms hereof, and (ii) which Houlihan Lokey
is required to retain under any records retention policy or any law, regulation
or securities exchange rule. If Houlihan Lokey becomes legally required to
disclose any Confidential Information, prompt notice thereof shall be given to
the Company, and Houlihan Lokey agrees to permit Company the opportunity to
obtain an appropriate protective order preventing such disclosure; provided,
however, that if any such disclosure is required notwithstanding the Company's
efforts, Houlihan Lokey will provide only such information as is specifically
requested and legally required. Without prejudice to any other rights or
remedies the Company may have, Houlihan Lokey acknowledges and agrees that money
damages would not be an adequate remedy for any breach of these provisions, and
that the Company shall be entitled to an injunction, specific performance and
other equitable relief for any threatened or actual breach hereof. Houlihan
Lokey's obligations under this Section 3 shall remain in effect for a period of
two (2) years following the termination of this Agreement.

         4. The Opinion. If requested, Houlihan Lokey shall render an opinion as
to the fairness (the "Opinion'), from a financial point of view, to the public
stockholders of the Company and/or to the Company of the consideration to be
received in connection with a Transaction. The Opinion shall not address the
Company's underlying business decision to effect any Transaction. It is
contemplated that the Opinion will include, in addition to any other matters
that Houlihan Lokey in its sole discretion deems appropriate, a description of
the principal materials that Houlihan Lokey has reviewed and upon which Houlihan
Lokey is relying, and the principal assumptions and qualifications upon which
Houlihan Lokey has relied. The Opinion will be signed and delivered as
contemplated below. Houlihan Lokey shall be responsible only for conclusions or
opinions set forth in its written Opinion, subject to the limitations set forth
herein.

         Houlihan Lokey consents to a description of and the inclusion of the
text of its written Opinion in any filing required to be made by the Company
with the Securities and Exchange Commission in connection with a Transaction and
in materials delivered to the Company's stockholders that are a part of such
filings, provided that any such description or 'inclusion shall be subject to
Houlihan Lokey's prior review and approval, which approval shall not be
unreasonably withheld. Any summary of, or reference to, the Opinion, any verbal
presentation with respect thereto, or other references to Houlihan Lokey 'in
connection with a Transaction, will in each instance be subject to Houlihan
Lokey's prior review and written approval (which shall not be unreasonably
withheld). Other than as set forth above, the Opinion will not be *included in,
summarized or referred to in any manner *in any materials distributed to the
public or the securityholders of the Company, or filed with or submitted to any
governmental agency, without Houlihan Lokey's express, prior written consent
(which shall not be unreasonably


                                       6
<PAGE>



withheld). Neither Houlihan Lokey's verbal conclusions nor the Opinion will be
used for any purpose other than in connection with a Transaction.

         In connection with the Opinion, Houlihan Lokey shall, subject to the
limitations expressed herein or in the Opinion, make such reviews, analyses and
inquiries as we deem necessary and appropriate under the circumstances. Among
other things, Houlihan Lokey will meet with certain senior management of the
Company, visit certain facilities and business offices of the Company, review
certain of the Company's historical financial statements, review certain other
documents pertaining to a Transaction, review forecasts and projections prepared
by Company management and/or the Company's advisors, and review publicly
available data about certain companies it deems comparable to the Company and
certain transactions it deems relevant.

         Each signatory hereto and each recipient of the Opinion acknowledges
that Houlihan Lokey may be requested to render certain future services to other
participants in a Transaction and that services rendered in the past or to be
rendered by Houlihan Lokey hereunder do not represent any actual or potential
conflict of interest on the part of Houlihan Lokey with respect to any such
future services.

         5. Indemnification; Standard of Care. The Company agrees to provide
indemnification, contribution and reimbursement to Houlihan Lokey and certain
other parties in accordance with, and farther agrees to be bound by the other
provisions set forth in, Schedule A attached hereto.

         6. Other Services. To the extent Houlihan Lokey is requested by the
Company to perform any financial advisory or investment banking services which
are not within the scope of this assignment, such fees shall be mutually agreed
upon by Houlihan Lokey and the Company in writing, in advance, depending on the
level and type of services required, and shall be in addition to the fees and
expenses described hereinabove. In the event that Houlihan Lokey is called upon
to render services, other than any services expressly provided for elsewhere *in
this Agreement, in connection with any lawsuit or legal action (including, but
not limited to, producing documents, answering interrogatories, giving
depositions, giving expert or other testimony, and whether by subpoena, court
process or order, or otherwise), then the Company shall pay Houlihan Lokey's
then current base hourly rates for the persons involved by the time expended in
rendering such services, including, but not limited to, time for meetings,
conferences, preparation and travel, and all related reasonable out of pocket
costs and expenses, and the reasonable legal fees and expenses of Houlihan
Lokey's legal counsel incurred in connection therewith; provided, however, that
the foregoing provision shall not apply in connection with either (i) any
lawsuit or other legal action initiated by either party against the other, or
(ii) any lawsuit or other legal action initiated by any third party against
Houlihan Lokey for which Houlihan Lokey is not entitled to Indemnification under
Schedule A, or (iii) any claim for indemnity by Houlihan Lokey under Schedule A.

         7. Attorneys' Fees. If any party to this Agreement brings an action
directly or indirectly based upon this Agreement or the matters contemplated
hereby against another party, the prevailing party shall be entitled to recover,
in addition to any other appropriate amounts, its



                                       7
<PAGE>

reasonable costs and expenses in connection with such proceeding, including, but
not limited to, reasonable attorneys' fees and court costs.

        8. Credit. Upon consummation of any Transaction, Houlihan Lokey may, a
its own expense, place announcements in financial and other newspapers and
periodicals (such as a customary "tombstone" advertisement) describing its
services in connection therewith.

         9. Miscellaneous. This Agreement shall be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, however, is intended to confer or does confer on
any person or entity, other than the parties hereto and their respective
successors and permitted assigns and, to the extent expressly set forth in
Schedule A attached hereto, and the other Indemnified Parties, any rights or
remedies under or by reason of this Agreement or as a result of the services to
be rendered by Houlihan Lokey hereunder.

         The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain *in full force and effect pursuant to the terms
hereof

         The Company agrees that it will be solely responsible for ensuring that
any Transaction complies with applicable law.

         This Agreement incorporates the entire understanding of the parties
regarding the subject matter hereof, and supersedes all previous agreements or
understandings regarding the same, whether written or oral.

         This Agreement may not be amended, and no portion hereof may be waived,
except in a writing duly executed by the parties.

         THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO SUCH STATE'S RULES CONCERNING CONFLICTS OF LAWS.
EACH OF HOULIHAN LOKEY AND THE COMPANY (ON ITS OWN BEHALF AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS EQUITY HOLDERS) WAIVES ANY RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THE ENGAGEMENT OF
HOULIHAN LOKEY PURSUANT TO, OR THE PERFORMANCE BY HOULIHAN LOKEY OF THE SERVICES
CONTEMPLATED BY, THIS AGREEMENT.

         We look forward to working with you on this assignment. Please confirm
that the foregoing terms are in accordance with your understanding by signing
and returning the enclosed copy of this Agreement, together with payment in the
amount of $100,000.

Very truly yours,

Houlihan Lokey Howard & Zukin Capital


                                       8
<PAGE>


By /S/ SCOTT J. ADELSON
   ---------------------
Scott J. Adelson
Senior Managing Director

Accepted and agreed to as of July 17, 2002:

Motorcar Parts & Accessories, Inc.

By:  /S/ SELWYN JOFFE
    ----------------------
Selwyn Joffe
Chairman

By:  /S/ ANTHONY SOUZA
   -----------------------
Anthony Souza
President and Chief Executive Officer



                                       9
<PAGE>


                                   SCHEDULE A


         This Schedule is attached to, and constitutes a material part of, that
certain agreement dated July 17, 2002, addressed to Motorcar Parts &
Accessories, Inc. by Houlihan Lokey (the "Agreement"). Unless otherwise noted,
all capitalized terms used herein shall have the meaning set forth in the
Agreement.

         As a material part of the consideration for the agreement of Houlihan
Lokey to furnish its services under the Agreement, the Company agrees to
indemnify and hold harmless Houlihan Lokey and its affiliates, and their
respective past, present and future directors, officers, shareholders,
employees, agents and controlling persons within the meaning of either Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934, as amended (collectively, the "Indemnified Parties"), to
the fullest extent lawful, from and against any and all losses, claims, damages
or liabilities (or actions in respect thereof), joint or several, arising out of
or related to the Agreement, any actions taken or omitted to be taken by an
Indemnified Party (including acts or omissions constituting ordinary negligence)
in connection with the Agreement, or any Transaction or proposed Transaction
contemplated thereby. In addition, the Company agrees to reimburse the
Indemnified Parties for any legal or other expenses reasonably incurred by them
in respect thereof at the time such expenses are incurred; provided, however the
Company shall not be liable under the foregoing indemnity and reimbursement
agreement for any loss, claim, damage or liability which is finally judicially
determined to have resulted primarily from the willful misconduct, bad faith or
gross negligence of any Indemnified Party.

         If for any reason the foregoing indemnification is unavailable to any
Indemnified Party or insufficient to hold it harmless, the Company shall
contribute to the amount paid or payable by the Indemnified Party as a result of
such losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received (or anticipated to be
received) by the Company, on the one hand, and Houlihan Lokey, on the other
hand, in connection with the actual or potential Transaction and the services
rendered by Houlihan Lokey. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or otherwise,
then the Company shall contribute to such amount paid or payable by any
Indemnified Party in such proportion as is appropriate to reflect not only such
relative benefits, but also the relative fault of the Company, on the one hand,
and Houlihan Lokey, on the other hand, in connection therewith, as well as any
other relevant equitable considerations. Notwithstanding the foregoing, the
aggregate contribution of all Indemnified Parties to any such losses, claims,
damages, liabilities and expenses shall not exceed the amount of fees actually
received by Houlihan Lokey pursuant to the Agreement.

         The Company shall not effect any settlement or release from liability
*in connection with any matter for which an Indemnified Party would be entitled
to indemnification from the Company, unless such settlement or release contains
a release of the Indemnified Parties reasonably satisfactory in form and
substance to Houlihan Lokey. The Company shall not be required to indemnify any
Indemnified Party for any amount paid or payable by such party in the settlement
or compromise of any claim or action without the Company's prior written
consent.


                                       10
<PAGE>

         The Company farther agrees that neither Houlihan Lokey nor any other
Indemnified Party shall have any liability, regardless of the legal theory
advanced, to the Company or any other person or entity (including the Company's
equity holders and creditors) related to or arising out of Houlihan Lokey's
engagement, except for any liability for losses, claims, damages, liabilities or
expenses incurred by the Company which are finally judicially determined to have
resulted primarily from the willful misconduct, bad faith, or gross negligence
of any Indemnified Party. The indemnity, reimbursement, contribution and other
obligations and agreements of the Company set forth herein shall apply to any
modifications of the Agreement, shall be in addition to any liability which the
Company may otherwise have, and shall be binding upon and inure to the benefit
of any successors, assigns, heirs and personal representatives of the Company
and each Indemnified Party. The foregoing provisions shall survive the
consummation of any Transaction and any termination of the relationship
established by the Agreement.



                                       11

</TEXT>
</DOCUMENT>
