FINANCIAL SERVICES AGREEMENT
This Financial Services Agreement ("Agreement") is entered into
on this 17th day of June, 1997 by and between BRIDGEWATER CAPITAL
CORPORATION (hereinafter "BCC") and GOLFGEAR INTERNATIONAL, INC.,
a Corporation (hereinafter "Client"),
HEREAFTER, the Client and BCC are referred to collectively as
"Parties", and singularly as "Party".
WHEREAS, the Parties desire to set forth the terms and conditions
under which the said services shall be performed.
NOW, THEREFORE, in consideration of the promises of the mutual
covenants herein, the Parties hereto agree as follows:
ARTICLE I-SCOPE OF SERVICES
BCC agrees to perform for the Client, beginning immediately on
the date this Agreement is signed by all Parties, the financial
services described as follows:
(a) BCC will arrange for and help consummate the merger between
Client and a publicly traded "shell" corporation.
(b) BCC will assist the Client to analyze, negotiate and advise
on equity capital, debt financing, bridge loans etc.
(c) BCC will perform Investment banking activities including,
but not limited to, assisting in locating merger candidates,
acquisition candidates, divestiture opportunities, spin-off
opportunities, strategic alliances or partnerships, any other
opportunities to enhance shareholder value, advise company on
financial public relations firms, services, techniques, press
releases, shareholder letters etc,
(d) BCC will advise Client and perform research on specific
investment opportunities which may come to the attention of BCC
or Client and provide research on general market conditions.
Client agrees that BCC will not advise Client on the
appropriateness of an investment, but merely collect, analyze and
summarize data.
(9) RCC will also perform other duties from time to time as
requested by Client, provided that in no event will BCC perform
the services of an investment adviser.
(f) In rendering these services, BCC may develop creative works
for Client, Including but not limited to inventions, discoveries,
improvements, developments, processes, drawings, computer
software or other work which may be protectable by copyright,
patent or trade secrecy law. BCC agrees that all such work shall
be considered to be work for hire" and that all ownership and
rights of copyright, patent, or trade secrecy pertaining to such
work shall become the property of the Client. BCC agrees to
assign and does hereby assign all its rights in and to the
foregoing, whether or not patentable or copyrightable, to the
Client. BCC agrees that all information disclosed to ft about
the Client's products, processes and services are the sole
property of the Client and BCC will not assert any rights to any
confidential or proprietary information or material, nor will BCC
directly or indirectly, except as required In the conduct of
their duties under this Agreement, disseminate or disclose any
such confidential information.
(e) Additional special projects, such as annual reports,
quarterly reports, video presentations, personal presentations,
financial public relations etc. will be performed and billed
separately as mutually agreed upon by all Parties.
ARTICLE II-PERIOD OF PERFORMANCE
The period of performance under this Agreement shall begin
immediately upon a $500,000 (gross) capital infusion into Client
and will continue for a primary twelve (12) month term. If this
Agreement Is terminated by Client prior to twelve months, then
all payments due and payable under this Agreement will become
immediately due and payable to BCC.
ARTICLE III-CONTRACTUAL RELATIONSHIP
In performing the services under this agreement, BCC shall
operate as, and have the status of, and independent contractor.
BCC shall not have authority to enter into any contract binding
the Client, or create any obligations on the part of the Client,
except as shall be specifically authorized by the Client. The
Client and BCC will be mutually responsible for determining the
means and the methods for performing the services described In
ARTICLE 1.
ARTICLE IV-COMPENSATION
As full consideration for the performance of the basic services
described above, the Client shall pay BCC compensation, only upon
a $500,000 gross capital infusion into Client, as follows:
(a) Upon successful completion of the merger, or the $500,000
gross capital infusion, whichever comes later, BCC shall be
entitled to 4.99% of the stock of the post merged public company.
Said stock shall be registered under S-8, or any similar
registration statement, or as may be applicable and also shall
have piggyback registration rights, if needed.
(b) $6,000 per month consulting fees due and payable in cash or
S-8/504 stock of Client, if available (at BCC's option). The
initial payment of $6,000 is due and payable upon the $500,000
gross infusion of capital and then the subsequent eleven payments
of $6,000 are due monthly on the corresponding anniversary dates.
The first six (6) months of payments shall be escrowed from the
initial infusion of capital and released from escrow accordingly.
(c) Client shall grant to BCC the right to represent the Client
exclusively, for the services described in Article 1, without
competition or interference for a period of one hundred eighty
(180) days from the date this Agreement is signed by all Parties.
(d) Client shall grant to BCC the right to appoint one person to
the Client's Board of Directors for a period of two (2) years
from the date this Agreement is signed by both Parties.
(e) A finders fee on any mergers or acquisitions of Client by,
of or through contacts introduced by or through BCC, calculated
using the Xxxxxx Formula (See attached Exhibit A). This fee is
due and payable in common stock of Client at said merger date.
The Xxxxxx Formula will be calculated using the total value of
the amount(s) paid for the Acquisition whether in stock, cash,
notes, warrants etc.
(f) A 10% Finders Fee and a 2% non accountable Expense
Allowance on any and all capital, cash, equity or debt, infused
into Client only by or through a contact Introduced by BCC. If
such capital comes from a source not introduced to Client by or
through BCC then no Finders Fee will be due to BCC however the
Expense Allowance will be due and payable to BCC, on all capital
raised excluding mergers & acquisitions not introduced by BCC.
(g) Upon presentation of Invoices from BCC, Client shall
reimburse BCC for any and ail reasonable and normal business
expenses incurred by SCO in connection with the performance of
the services provided herein up to the sum of $1,500 per month;
provided, however, any expenditures in excess of $1,500 per month
will also be reimbursed to BCC as long as BCC has, prior to such
expenditure, received the approval of the Client to incur such
expenses.
ARTICLE V-COMPANY INFORMATION
Since BCC must at all times rely upon the accuracy and
completeness of information supplied to it by the Client's
officers, directors, agents, and employees, the Client agrees to
Indemnify, hold harmless, and defend BCC, its officers, agents or
employees at the Clients expense, in any proceeding or suit which
may arise out of and/or due to any inaccuracy or incompleteness
of such material supplied by the Client to BCC.
ARTICLE VI-ASSIGNMENT
This Agreement is intended to be binding upon and shall inure to
the benefit of the Parties, their successors and assigns,
Specifically, if the reverse merger occurs, this Agreement
continues as an obligation of the new entity.
ARTICLE VII-REPRESENTATIVE AND NOTICES
Notices provided for hereunder shall be in writing and may be
served personally to the Client's representative and BCC's
representative at their respective place of business or by
registered mail to the address of each Party or be transmitted by fax.
ARTICLE VIII-ARBITRATION/JURISDICTION OF COURT
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration
in the County of Orange, California, U.S.A., in accordance with
the rules of the American Arbitration Association there in
effect, except that the Parties thereto shall have any right to
discovery as would be permitted by the Federal Rules of Civil
Procedure and the prevailing Party shall be entitled to,
reasonable costs and reasonable attorney's fees from arbitration
or any other civil action. Judgment upon the award rendered
therein may be entered in any Court having jurisdiction thereof.
Jurisdiction for any legal action is stipulated between the
Parties to lie In the County of Orange, California, U.S.A.
ARTICLE IX-MISCELLANEOUS
This Agreement constitutes the entire agreement between the
Client and BCC relating to providing financial services. It
supersedes all prior or contemporaneous communications,
representations or agreements, whether oral or written, with
respect to the subject matter hereof and has been induced by no
representations, statements or agreements other than those
expressed herein. No agreements hereafter made between the
Parties shall be binding on either Party unless reduced to
writing and signed by an authorized officer of the Party bound
thereby.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be executed by their duly authorized officers.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
BRIDGEWATER CAPITAL CORPORATION
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Chief Financial Officer
GOLFGEAR INTERNATIONAL, INC.
Amount: $500,000
Instrument: 2 year Senior Convertible Debenture
Registration: Underlying common stock to be registered pursuant
to an applicable form of registration (i.e. X-0, XX-0, 000, X-0).
The company shall use it's best efforts to file an applicable
registration statement within 60 days after the company begins trading.
Coupon: 10% annualized, payable quarterly, due on all
unconverted debentures as of the quarterly payment dates. The
payment can be, made at the company's discretion either in cash
or stock. The underlying stock would be issued at a 30% discount
from the previous 5 day average closing bid price on the date of
the quarterly calculation. The stock will also have piggyback
registration rights.
Proposed Structure: The debenture will be convertible at the
lesser of, a share price using shares valued at a private company
valuation of $6,000,000 (pre-investment), or a 40% discount from
the previous 5 day, from the date of conversion, average closing
bid price of the common stock.
Buyback Provision: Anytime prior to the 9 month anniversary date
from the signed subscription agreement, the Company shall have
the right, in whole or part, to purchase any unconverted
debentures from the investor(s) at a 12.5% premium of par value
and any accrued interest. If the company redeems the debenture
then warrants to purchase $250,000 worth of common stock (on a
pro-rata basis), at the original valuation price, shall be issued
to the investor(s). The common stock underlying the warrants
will have piggyback registration rights.
Closing: ASAP
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
Dated: June 17, 1997
Law Offices of
XXXX X. WYKIDAL & ASSOCIATES
Xxxx X. Wykidal 000 Xxxxxxx Xxxxxx, Xxxxx X-0
Xx Xxxxxxx Xxxxx Xxxx, Xxxxxxxxxx 00000
Xxxx X. Xxxxx (000) 000-0000 Telefax (000) 000-0000
Xxxxx X. Xxxxxx
January 27, 1999
Xxxx X. Xxxxxxx
Bridgewater Capital Corporation
0000 XxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Re: GolfGear International, Inc.
Letter of Understanding
Dear Xx. Xxxxxxx:
This letter, when signed by you, shall serve as an agreement regarding
the material terms that have been reached between Bridgewater Capital
Corporation ("BCC") and GolfGear International, Inc. (the "Company")
with respect to the matters contained herein. The material terms of the
agreement that has been reached are as follows:
The Company will issue (no later than February 28, 1999) warrants in the
amount of 105,705 shares exercisable at $.62 per share which expire in
October, 2002.
The Company will execute a promissory note, non interest bearing,
in the amount of Fifty Thousand Dollars ($50,000) in favor of
BCC, all due and payable no later than April 1, 1999. In the
event that the Company reaches minimum financing of Two Million
Two Hundred Fifty Thousand Dollars ($2,250,000) as currently
contemplated through the proposed offering of the Company's
Series A Convertible Preferred Stock, prior to April 1, 1999, the
Company will pay Fifty Thousand Dollars ($50,000) to BCC upon
reaching that minimum amount. In the event that the Company fails
to timely pay the Fifty Thousand Dollars ($50,000) when due, this
Agreement shall be considered null and void, and all remaining
shares that are the subject of this Agreement shall be forthwith
returned to BCC without limitation or conditions.
On or before February 28, 1999, if, and only if, the promissory
note and the warrants referred to above have been delivered to
BCC, BCC will deposit into a mutually acceptable escrow account
(to be held in street name, without restrictive legend, which
will be approved by the Company without delay) all of its common
stock of the Company (474,002 shares) to be distributed in
accordance with the following terms:
Commencing on May 1, 1999, Ten Thousand (10,000) shares per
month, or more at the Company's investment banker's discretion,
at a forty percent (40%) discount to the average closing bid
price (to be calculated based on the five (5) previous trading
days prior to the date of sale).
Commencing November 1, 1999, through February 29, 2000, the
purchase discount rate shall be ten percent (10%).
Commencing March 1, 2000, any remaining unsold shares shall be
transferred to BCC without limitations or discounts.
There will be no initial, subsequent or ongoing cost to BCC for
this escrow.
If this basic Agreement meets with your approval and is acceptable,
please sign where indicated below and I will commence preparing
the necessary documents which will consist primarily of a promissory
note for the Fifty Thousand Dollars ($50,000) and escrow agreement
regarding the Four Hundred Seventy Four Thousand and Two (474,002)
shares. Notwithstanding the fact that formal documents will be prepared,
this Agreement shall be considered binding upon BCC and the Company
when signed by you.
Thank you for your patience and cooperation in this regard. I am
authorized to execute this Agreement on behalf of the Company.
Very truly yours,
/s/ Xxxx X. Wykidal
Xxxx X. Wykidal
AGREED AND ACCEPTED:
BRIDGEWATER CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Chief Financial Officer
