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Exhibit 10.33
DOMESTIC FINANCING AGREEMENT
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This Domestic Financing Agreement (the "Agreement") is made and entered
into the 3rd day of October, 1996 between Video Jukebox Network, Inc., 0000
Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx 00000 (the "Company"), and Communications
Equity Associates, Inc., 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx
00000 ("CEA").
RECITALS:
A. The Company owns and operates a business which distributes music
video television programming known as "THE BOX" in the United States, the United
Kingdom, the Netherlands, Puerto Rico, Argentina, Venezuela, Peru and Chile.
B. CEA is engaged in the business of providing investment banking and
brokerage services to media companies in the United States and throughout the
world.
C. The Company desires to engage CEA to arrange Financing (as defined
in Section 2 hereof) for the Company and CEA desires to provide such services to
the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. RECITALS. The Recitals set forth hereinabove are incorporated herein
by reference and are and shall be deemed to be a part of this Agreement.
2. ENGAGEMENT. The Company hereby engages CEA as its exclusive
representative for purposes of: (a) arranging equity, debt and/or hybrid
financing ("Financing") for the Company, subject to Section 5(a) hereof, to
further develop the domestic interactive music television network, and (b) for
such other purposes as are mutually agreed to in writing by the Company and CEA.
The Company makes no representation, warranty, commitment or covenant that it
will complete, execute or enter into any transaction with any Prospect.
3. DUTIES OF CEA. CEA shall, in accordance with the Company's
directions and instructions, prepare informational material regarding the
Company's operations and/or projects to present to individuals and entities
("Prospect(s)"), who have been pre-approved in writing by the Company in
accordance with Section 5(a) hereof. CEA shall act as a liaison and intermediary
between the Company and the Prospects. CEA shall not be an agent of the Company
and shall not bind or obligate the Company in any way, without the Company's
prior written consent. Both CEA and the Company shall keep each other informed
as to the status of contacts, discussions and negotiations with Prospects. CEA
shall use its best efforts and endeavor to contact Prospects for Financing and
to accomplish transactions on terms that are acceptable to the Company, but CEA
makes no representations regarding the successful conclusion of any transaction.
CEA may perform its services hereunder through any person or entity that,
directly or indirectly, CEA controls, is controlled by CEA or is under common
control with CEA. The Company acknowledges that CEA may from time to time
represent entities which may be competitors with the Company or Prospects for a
Financing. CEA, however, shall not, without the Company's prior written consent,
represent any Prospect with regard to a Financing of the Company.
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4. TERM. The term of this Agreement commences on the date first written
herein above and terminates at the close of business on December 31, 1997 (the
"Term").
5. COMPENSATION.
(a) FINANCING. If the Company or an entity in which the Company has an
equity interest (the "Financed Entity") enters into an agreement for Financing
("Financing Agreement") during the Term or within twelve (12) months thereafter
with a Prospect who, during the Term and prior to the consummation of the
Financing Agreement, was: (i) identified in writing to the Company by CEA and
(ii) approved in writing by the Company, then the Company shall pay to CEA a fee
(the "Fee"). A Financing Agreement may contemplate, without limitation, a direct
or indirect loan, lease, guarantee, stock exchange, joint venture, partnership,
sale of assets, contribution of subscribers in exchange for equity, purchase of
securities or any other debt and/or equity investment. The term "Financing
Agreement" shall not apply to, and the Company shall not owe compensation to CEA
for, Financing raised through the sale of the Company's registered securities in
a second public offering of such securities or through receivables factoring,
equipment leasing, trade payables or accruals arising in the ordinary course of
the Company's business. The Company shall notify CEA in writing in advance of
any closing of a Financing Agreement so that CEA may attend such closing. CEA
shall have reasonable access to all closing documents and to any other materials
necessary to ascertain and collect any Fee hereunder.
(b) CEA FEE.
(i) CASH FINANCING. If cash forms all or a portion of a
Financing, then CEA shall receive a Fee (a "Cash Fee") for the cash portion of
the Financing, equal to five percent (5%) of the cash Financing.
(ii) NON-CASH FINANCING. If non-cash items form all or a
portion of a Financing, then CEA shall receive a Fee (a "Non-Cash Fee") for the
non-cash portion of such non-cash Financing, equal to five percent (5%) of the
cash equivalent value of the non-cash Financing, as mutually agreed upon by the
Company and CEA. The Company shall pay the Non- Cash Fee to CEA in cash. If the
Company does not have sufficient funds (taking into account the Company's
reasonable working capital needs) to pay the Non-Cash Fee as required by Section
5(b)(iii) hereof, the Company and CEA shall agree upon the payment terms of such
Non-Cash Fee.
(iii) TIMING OF PAYMENT OF FEE. Subject to Section 5(b)(ii)
hereof, the Company shall pay the Fee in increments to CEA, as and when the cash
or other consideration that constitutes the Financing is received by the
Company. The amount of such increments shall equal five percent (5%) of the
amount of cash or value of non-cash items received by the Company. The Company
shall pay Fees by wire transfer of immediately available United States funds to
a bank account specified in writing by CEA.
(iv) VALUATION OF NON-CASH FINANCING. If the Company and CEA
are unable to agree upon the cash equivalent of any non-cash Financing, either
party may deliver a
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notice of non-agreement (the "Deadlock Notice") to the other party. Within ten
(10) business days of the other party receiving the Deadlock Notice, each of the
Company and CEA shall appoint one appraiser, which appraisers shall jointly
determine the cash equivalent of such non-cash Financing. The final
determination of the appraisers (if they are able to agree) shall be binding
upon the Company and CEA. If the appraisers are unable to agree upon the cash
equivalent of such non-cash Financing within twenty (20) business days of the
last appraiser being appointed, the appraisers shall appoint one independent
appraiser who, within 45 days after appointment, shall independently determine
the cash equivalent of any non-cash Financing and whose final determination
shall be binding upon the Company and CEA.
(c) EXPENSE REIMBURSEMENT. Prior to commencing any of the services to
be provided by CEA hereunder, CEA and the Company shall agree in writing on the
maximum amount of out-of-pocket expenses of CEA which shall be reimbursed by the
Company. Reasonable expenses and costs incurred by CEA in excess of the
agreed-upon amount, which are supported by expense statements and other
reasonable supporting documentation, shall be reimbursed by the Company upon the
written pre-approval of the Chief Financial Officer of the Company. The Company
shall reimburse CEA up to the maximum amount of such agreed expenses within
thirty (30) days after receipt of an invoice and reasonable documentation
evidencing such expenses.
6. CONFIDENTIALITY. Subject to (a) any legal requirements imposed on
CEA compelling disclosure and (b) disclosures to Prospects or their
representatives, CEA shall consider all information received from the Company as
proprietary and confidential, except to the extent that such information is
generally available to the public at large. Material non-public or confidential
information relating to the Company shall only be provided by CEA to Prospects
who have executed a confidentiality agreement, which is satisfactory to the
Company and includes the Company as a party to such agreement. Upon termination
of this Agreement, at the Company's written request, CEA shall use its best
efforts to cause all Prospects either to destroy or to return to the Company all
copies of documents provided pursuant to this Agreement which contain
proprietary and confidential information relating to the Company. CEA
acknowledges that nothing contained in this Agreement shall be construed as
creating in CEA any rights of ownership or any property rights in any
proprietary or confidential information of the Company.
7. MUTUAL REPRESENTATIONS AND WARRANTIES.
(a) CEA warrants and represents that (i) CEA is registered as a
broker-dealer with the U.S. Securities and Exchange Commission (the
"Commission") and is registered as a broker-dealer in all states in which it
shall offer any securities of the Company and is a member in good standing of
the NASD; (ii) there is not now pending or threatened against CEA or, to the
best of CEA's knowledge, any "Associated Person" of CEA, as that term is defined
below, any action or proceeding of which it has been advised, either in any
court of competent jurisdiction, before the Commission, or any state securities
commission concerning its activities as a securities broker or dealer; (iii) CEA
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Florida, with all requisite power and authority to
enter into this Agreement and to carry out its obligation hereunder; (iv) this
Agreement has been duly authorized, executed and delivered and is a valid and
binding agreement; (v) the
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consummation of the transactions contemplated herein will not result in any
breach of any of the terms or conditions of, or constitute a default under, any
indenture, agreement, or other instrument to which CEA is a party, or violate
any law or any order directed to CEA by any court or any federal or state
regulatory body or administrative agency having jurisdiction over CEA, CEA's
affiliates, or CEA's property. For purposes of this Section, the term
"Associated Person" of CEA shall have the meaning set forth in Section 3(a)(21)
of the Securities Exchange Act of 1934, as amended.
(b) The Company warrants and represents that (i) it has full authority
and power to execute and perform this Agreement in accordance with its terms;
(ii) the execution or performance of this Agreement by the Company will not
violate any rights of, agreements with or obligations to any third parties;
(iii) the Company will comply with all applicable securities or other laws,
rules and regulations relating to the Agreement; and (iv) the Company will not
circumvent or otherwise frustrate the intent of this Agreement.
8. COVENANTS OF CEA. CEA shall during the course of CEA's efforts to
assist the Company with respect to obtaining Financing (a): use its best efforts
to conduct the Financing in accordance with the requirements of Regulation D
promulgated under the Securities Act of 1933; (b) not make any untrue statement
of a material fact or omit to state a material fact required to be stated or
necessary to make any statement made not misleading concerning the Company or
its securities; (c) not offer or sell any securities of the Company or of any
Financed Entity by means of (i) any advertisement, articles, notice, or other
communication mentioning the securities, published in any newspaper, magazine,
or similar medium or broadcast over television or radio; or (ii) any seminar or
meeting, the attendees of which have been invited by any general solicitation or
general advertisement; and (d) only use sale materials which have been approved
in writing by the Company.
9. MUTUAL INDEMNIFICATION. CEA and the Company each agree to indemnify
fully and forever each other and their affiliates and subsidiaries from any and
all losses, claims, damages, liabilities, costs and expenses arising from or
relating to the other party's breach of this Agreement, including, but not
limited to, all reasonable arbitration, attorneys' fees, collection and/or court
costs; provided, however, that the party seeking indemnification pursuant to
this Section 9 has not breached the terms of this Agreement or been grossly
negligent or engaged in willful misconduct in connection with such party's
obligations hereunder.
10. PUBLIC ANNOUNCEMENTS. Subject to the Company's prior written
approval, CEA shall have the right to publicly announce and/or advertise any of
the services provided to the Company hereunder. The Company shall mention the
role of CEA in key public announcements it may make regarding any completed
Financing hereunder.
11. CONTROVERSIES.
(a) In the event of any controversy arising out of or relating to
this Agreement or a breach or alleged breach hereof, which the parties are
unable to resolve among themselves, the parties shall resolve the dispute by
arbitration pursuant to the provision of 9 U.S.C. Sec. 1 ET SEC., and in
accordance with the Commercial Arbitration Rules of the American Arbitration
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Association (the "AAA"), by sending written notice to the other party to such
effect. The place of arbitration shall be Miami, Florida.
(b) In the event of arbitration, within thirty (30) days after
receipt of a request to arbitrate a dispute, the Company and CEA shall each
appoint one arbitrator, and within fifteen (15) days thereafter the two
appointed arbitrators shall select a third arbitrator. In the event the two
arbitrators are unable to agree on the selection of a third arbitrator, the two
arbitrators shall request the Federal District Court, Southern District of
Florida, to select such third arbitrator. If the Company or CEA shall fail to
make such appointment within such thirty (30) day period, the other party shall
be authorized to appoint the second arbitrator. All arbitrators shall be
impartial and unrelated, directly or indirectly, so far as employment or
services is concerned, to any of the parties hereto or to any person or entity
directly or indirectly related to the parties hereto. In any arbitration
proceedings involving any specialized area of knowledge or competence, the
arbitrators shall have substantial knowledge and experience in such specialized
area. The arbitration proceedings shall otherwise be governed by the rules of
the AAA then in force.
(c) The three arbitrators shall investigate the facts and shall
hold a hearing or hearings if required at which the parties may present evidence
and arguments, be represented by counsel and conduct cross-examination. In
determining any question, matter or dispute before them, the arbitrators shall
apply the provisions of this Agreement, without varying therefrom in any
material respect. They shall not have the power to add, to modify or change any
of the provisions of this Agreement. The three arbitrators shall render a
written decision upon the matter presented to them by a majority vote, and that
decision shall be final and binding on the parties. Judgment upon the decision
rendered by such arbitration may be entered by any court having jurisdiction
thereof.
12. NOTICES. Any notice from one party to the other shall be in writing
and deemed given when mailed if delivered by first class certified mail, return
receipt requested, or by overnight delivery, to the person at the address listed
below or to such other person and/or address as may be designated from time to
time in writing.
If to CEA:
Communications Equity Associates, Inc.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Chief Operating Officer
If to the Company:
Video Jukebox Network, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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13. SEVERABILITY. The invalidity or illegality of any provision, term,
or covenant contained in or made a part of this Agreement shall not affect the
validity of the remainder of this Agreement which shall remain in full force and
effect.
14. ENTIRE AGREEMENT. This Agreement contains all of the terms agreed
upon by the parties with respect to the subject matter hereof and there are no
representations or understandings between the parties except as provided herein.
This Agreement may not be amended or modified in any way except by a written
agreement duly executed by the parties. The execution of this Agreement
terminates all prior agreements, written or oral, between the Company and CEA
relating to the subject matter hereof.
15. WAIVER. No consent or waiver of any condition or provision shall be
effective unless evidenced by an instrument in writing, duly executed by the
party sought to be charged with such waiver or consent. No waiver of a breach
of, or default under, any provision of this Agreement shall be deemed a waiver
of any other breach or default under any provision of this Agreement.
16. HEADINGS. The headings in this Agreement are inserted for
convenience only and shall not affect the construction hereof.
17. GOVERNING LAW. This Agreement shall be construed as to both
validity and performance in accordance with and governed by the laws of the
State of Florida without regard to conflicts of laws principles thereof.
18. BENEFITS; ASSIGNMENTS. The rights under this Agreement shall not be
assignable nor the duties delegable by any party without first obtaining the
written consent of the other party hereto. Nothing contained in this Agreement,
express or implied, is intended to confer upon any person or entity, other than
the parties hereto and their successors in interest. Any rights or remedies
under or by reason of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
COMMUNICATIONS EQUITY ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxx
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Executive Vice President
VIDEO JUKEBOX NETWORK, INC.
By: /s/ Xxxx Xxxxxxx
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President and CEO
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