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Sandbox Entertainment - Retainer/non-circumvention Agreement
Exhibit 10(cc)
RETAINER / NON - CIRCUMVENTION AGREEMENT
This agreement is entered into this 16th day of May, 1995 between Tracer Design, Inc., hereinafter referred to as "TDI" whose principal place of business is 4206 N. Central Avenue, Phoenix, Arizona 85012 and Frank X. Helstab, hereinafter referred to as "HELSTAB", whose principal business residence is 9300 North 58th Street, Paradise Valley, Arizona 85253.
Whereas, TDI desires to retain the services of HELSTAB acting as an intermediary/consultant to facilitate the procurement of the following:
A.) To either directly or indirectly introduce TDI to a funding source for the purpose of securing approximately One to Two Million dollars ( $1,000,000 to $2,000,000 USD ) to accomplish TDI's expansion goals (the "Initial Funding"). Additionally, the scope of this contract may also include strategic joint-venture alliances or Regulation "S" placements and is not limited to the equity / debt or the public / private methods of financing.
B.) To either directly or indirectly introduce TDI to one or more prospective clients whereby such introduction produces the successful signing of one or more service contracts with TDI.
The determination of a direct or indirect introduction shall be decided based upon the following interpretations,
1a.) "Direct" shall include all projects where HELSTAB introduces TDI
directly to the funding sources/client and participates in the
negotiations leading to the contractual signing of said project.
1b.) "Indirect" shall include any and all third party introductions
that HELSTAB introduces to TDL the result of which leads to the signing
of a contractual project with that specific third party within the term
of this Agreement or the "Noncircumvention Period" as hereafter
defined. "Indirect" shall also include any and all subsequent parties
introduced to TDI by HELSTAB's third party referral the result of which
leads to the signing of a contractual project with that specific
subsequent party within the term of this Agreement or the
"Noncircumvention Period", but "Indirect" does not include parties
introduced to TDI such by subsequent parties.
1c.) "Noncircumvention Period" means the twenty four (24) month period
of time immediately following termination of this Agreement.
Whereas, TDI will cooperate with HELSTAB and furnish him with all pertinent information and appropriate data concerning such financings.
Whereas, notwithstanding any provision of this agreement TDI acknowledges that HELSTAB is not acting as a Broker-Dealer, but as a Finder/Consultant by introducing TDI to prospective investors, sources of funding and a potential user client base.
Whereas, it is agreed that neither one of the parties will contact in any manner a third party introduced by the other party to this agreement, except with expressed consent in writing.
In consideration of the mutual benefit, promises and covenants contained herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Article I. - Retainer - ---------------------
TDI shall retain the services of HELSTAB for a retainer fee of $3,500.00 ( Three-thousand five hundred ) a month, payable at the signing of this agreement by corporate check or wire transfer and due in like manner on the 15th day of any subsequent month, during the term of this intermediary agreement. It is further agreed to by the parties that any and all retainer fees due or to come due during the term of this Agreement shall be directly deducted from HELSTAB'S "SUCCESS FEE" at closing or other receipt of funds by TDI from a transaction or contract described in A or B above, it being agreed that such retainer fees are nonrefundable advances of the SUCCESS FEE.
Article II. - Success Fee - -------------------------
The "SUCCESS FEE" to be paid to HELSTAB by TDI shall be paid at and simultaneously with the closing of all said transactions. The "SUCCESS FEE" amount for the Initial Funding shall be at a rate of 3.5% (Three and one half percent) of the par amount of the equity financing packages received by TDI and 3.0% (Three percent) of the par amount of any debt financing. Should HELSTAB successfully obtain for TDI the Initial Funding on or before August 31, 1995, HELSTAB will be issued 3% (Three percent) of the fully diluted outstanding stock of TDI (taking into account any shares to be issued with respect to the Initial Funding), subject to HELSTAB executing and delivering to TDI a shareholder's agreement containing rights of first refusal and other customary restrictions on the transferability of stock in a privately held company prior to an initial public stock offering, an investment letter relating to securities laws matters in form and substance satisfactory to TDI, and agreement by TDI's current shareholders (Little, Layne, Whittington) not to cause TDI to issue any stock to them at less than fair market value.
With respect to transactions described in B. above, HELSTAB shall be entitled to a Success Fee of 5.0% (Five percent) of the gross margin revenue generated by any and all direct introductions, and Success Fee of 3.0% (Three percent) of the gross margin revenue generated by any and all third party or indirect introductions. (As previously stated in paragraph B., la.,lb.).
The Success Fees shall apply to transactions described above that are closed during the term of this Agreement or during the Noncircumvention Period, but not thereafter.
Article III. - Expenses - -----------------------
TDI will be responsible for all reasonable, direct travel expenses incurred by HELSTAB regarding the proposed financing. Such expenses shall be subject to prior approval by TDI. When possible, such expenses are to be paid in advance. Additional expenses such as meals, entertainment and rental cars are to be paid when HELSTAB sends TDI the appropriate receipts for reimbursement.
Article IV. - Information Warranty - ----------------------------------
TDI represents and warrants that all information made available to HELSTAB will, at all times during the period of engagement of HELSTAB hereunder, be complete and correct in all material fact or, upon TDI learning of material inaccuracies, shall promptly be made to be materially complete and correct.
Article V. - Continuing Involvement - -----------------------------------
This is to confirm that each of the named signatories, separately and individually, hereby agree that he/they will not make any contact with, deal with or otherwise be involved in any transaction(s) with any broker / dealer, bank or lending institutions, trusts, pension funds, corporations, companies or individuals, lenders or borrowers, buyers or sellers introduced by another of the signatories, and/or third party or subsequent referrals by such third parties separately and individually. Without specific and agreed to permission of the introducing signatory or signatories. Further, the parties to this contract hereby agree that if HELSTAB successfully and timely obtains the Initial Funding, TDI will give first good faith consideration, taking into account the best interests of TDI, to using the services of HELSTAB in placing subsequent financings desired by TDI during the term of this Agreement.
Article VI. - Term - ------------------
The initial term of this Agreement shall be from the date hereof until July 31, 1995. If HELSTAB successfully obtains at least $400,000 in capital for TDI by July 31, 1995, then the term of the Agreement shall automatically be extended until August 31, 1995, otherwise the Agreement shall terminate at midnight on July 31, 1995, unless the parties agree to extend it on a month to month basis. If HELSTAB successfully obtains the Initial Funding for TDI by August 31, 1995, then the Agreement shall be automatically extended for a two (2) year term, commencing on September 1, 1995; otherwise the Agreement shall terminate automatically at midnight on August 31, 1995, unless the parties agree to extend it on a month to month basis. The signatories hereby confirm that the identities of the broker / dealers, institutions, corporations, individuals, trusts, pension funds, lenders or borrowers, buyers or sellers, or suppliers are currently and in the future the property of the introducing signatory or signatories and shall remain so for the duration of this agreement.
Article VII. - Confidentiality - ------------------------------
The signatories hereby agree to keep completely confidential the names of any institutions, corporations, pension funds. trusts, individuals or groups of individuals, lenders or borrowers, buyers, sellers, or suppliers introduced by any of the named signatories or their associates. Such identity shall remain confidential during the applicable transaction(s) and for the duration of this agreement and shall include any telephone numbers, addresses and Telex or TWX numbers, or other pertinent information. Such information is considered the property of the introducing signatory or signatories and I/we hereby agree to discuss same and mutually agree on what procedure to use.
Article VIII. - Non-Disclosure - ------------------------------
It is understood by the signatories to this agreement that the very terms. conditions, and operation of this contract between the parties is of a confidential nature in itself and stands alone as an intermediary agreement. Neither party may disclose or disseminate the terms, conditions, or operations of this agreement without the express written consent of the other party, except to their professional advisors, investors, and others on a strictly need-to-know basis. HELSTAB further acknowledges that he will be receiving and disseminating confidential information of TDI in order to carry out the purposes of this Agreement. In order to protect the same, he simultaneously herewith has executed and delivered to TDI the Confidentiality Agreement attached hereto as Exhibit A, and agrees to obtain from each person or entity to whom he intends to transmit such confidential information, prior to transmittal of such information, their execution and delivery to TDI of the attached Confidentiality Agreement.
Article IX. - Arbitration - -------------------------
Any controversy or claim arising out of or relating to this document/contract, or the breach thereof, and which is not settled between the signatories themselves, shall be arbitrated in accordance with the rules of the American Arbitration Association, with hearing to take place in Phoenix, Arizona, or other mutually agreed location and judgement upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof including the award to the aggrieved signatory or signatories, such award being related to the total remuneration, information, tangible or intangible property received as a result of business conducted with the parties covered by this agreement plus any and all costs, attorney fees and other costs or charges reasonably necessary to adjudicate the controversy in addition to any and all damages deemed fair by the Arbitrator(s).
Article X. - Intermediary - -------------------------
All actual negotiations, due diligence, final agreements and guarantees shall take place between the parties ( investor(s) and/or the person(s) holding their power of attorney and officers of the prime bank and/or broker / dealers, etc. HELSTAB shall be held harmless from any dispute or legal action arising from the relationship between the parties and the prime bank and/or broker / dealer, etc., Underwriter, etc. as HELSTAB is acting strictly in the capacity of an intermediary. HELSTAB acknowledges that this Agreement is nonexclusive in the sense that his entitlement to compensation hereunder is based upon his own performance, and that TDI is free to use the services of others in connection with locating capital and service agreements without any obligation to compensate HELSTAB with respect to capital or service contracts resulting from the efforts of such others, and that HELSTAB is free to act as intermediary for other clients so long as there is no conflict of interest between TDI's interests and those of HELSTAB or his other clients. HELSTAB also acknowledges that in acting as an intermediar...
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