EXHIBIT 6.6
COMMISSION AGREEMENT
THIS AGREEMENT made this 20th day of December, 1994 by and
between MEDIA DROP-IN PRODUCTIONS, INC., a Delaware corporation, ("MDI") and
STAMFORD MEDIA GROUP, LLC , a Connecticut limited liability company
("Company").
R E C I T A L S
WHEREAS, MDI is a corporation which engages in the business of
promotional fulfillment, including fulfillment of second chance prizes in the
lottery industry, having its principal offices in Hartford, Connecticut; and
WHEREAS, Company is knowledgeable regarding procurement of video
tapes, audio tapes and compact disks as a result of its involvement in the
entertainment industry; and
WHEREAS, Company is willing to act as a procurement representative
for MDI, provided that it receive a commission based on the Collections (as
herein defined) of MDI, and MDI desires the services of Company as a
procurement representative, upon commission schedule and the other terms and
conditions herein contained.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MDI and Company agree as
follows:
1. SERVICES. MDI hereby contracts for the services of
Company, as an independent contractor, and Company agrees to render such
services, upon the terms and conditions herein contained. Nothing herein
contained shall require Company to maintain any fixed schedule or minimum
number of hours of work. The services to be rendered by Company are as
follows:
(a) During the term of this Agreement, Company
shall assist MDI in procurement of video and audio entertainment media upon
favorable terms and conditions. Company shall perform the foregoing duties by
introducing MDI to individuals and corporations in the entertainment industry
(collectively the "Supply Sources"), and assisting MDI in the negotiation of
supply contracts with the Supply Sources. MDI acknowledges that most of the
Supply Sources are located in New York or California, and as a result
thereof, the work to be performed under this Agreement will be performed
outside of the State of Connecticut.
(b) During the term of this Agreement (as defined
in paragraph 2 below), a representative of Company shall be available at
reasonable times for purposes of telephonic discussions with MDI, its
officers and directors, with regard to the marketing of the business of MDI,
and such other areas as MDI may request. When reasonably requested, a
representative of Company shall participate in meetings with the management
or the customers or suppliers of MDI, at the expense of MDI, including the
representative's transportation, lodging and meal expenses. In carrying out
the foregoing, Company shall use its best efforts to further MDI's interest
and not to in any way, directly or indirectly, injure the reputation of MDI.
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(c) Company shall faithfully and industriously
assume and perform with skill, care, diligence and attention all
responsibilities and duties imposed upon Company under this Agreement.
(d) Company shall have no authority to enter into
any contracts binding upon MDI, which would create any obligations on the
part of MDI, except as may be specifically authorized by MDI.
(e) During the term of this Agreement, Company
shall not engage and/or perform services of any nature in any capacity for
any person, corporation, partnership or other entity engaged in the lottery
prize fulfillment business, provided that the foregoing shall not in any way
restrict or prohibit Company from engaging in any other consulting services,
employment, or other gainful activity outside of the lottery prize
fulfillment business.
2. TERM.
(a) This Agreement shall be binding and fully
enforceable against the parties immediately upon the execution hereof. The
term of this Agreement (the "Term") shall be for a period commencing on
December 15,1994 (the "Start Date"), and this Agreement shall terminate on
December 14, 1997.
(b) In the event that by the expiration of the
Term, Collections (as herein defined) during the Term are less than
$27,300,000.00, then Company shall have the right to renew this Agreement for
additional periods of one (1) year each running from December 15, 1997 until
$27,300,000.00 of Collections accounting from December 15, 1994 is reached,
after which time there shall be no right of renewal. Such right of renewal
shall be exercised by written notice from Company to MDI at least fifteen
(15) days prior to the expiration of the Term or the then current renewal
term. In the event that Company validly exercises its renewal option and MDI
desires not to have this Agreement renewed, then MDI shall deliver notice
thereof to Company on or before the expiration date of the Term or the then
current renewal term, which notice shall be accompanied by MDI's Promissory
Note in the form attached hereto and made a part hereof as Exhibit A, wherein
MDI shall agree to pay Company the difference between $808,250.00 and the
amount of Commission (as herein defined) previously paid under this
Agreement, together with interest at the rate of three percent (3%) above the
Wall Street Journal Prime Rate, payable in twenty-four (24) consecutive equal
monthly installments of principal and interest, the first of which shall be
due on the fifteenth day of the first month after the expiration of this
Agreement. Upon delivery of the Promissory Note, MDI shall be released from
all obligations under this Agreement, including any further obligations to
pay Commission. Except as expressly provided in this subparagraph (b),
neither party shall have any right of renewal.
3. COMMISSIONS. For the procurement services to be rendered
hereunder, MDI shall pay to Company a commission (the "Commission") to be
calculated and paid as follows:
(a) DEFINITIONS: The following terms shall have
the meanings indicated:
(i) "XXXXXXXX" shall mean the amount of
all invoices rendered by MDI
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during the Term, or any renewal term of this Agreement, for all products and
services, excluding sales tax and freight, as well as the value received from
bartering products or services, all determined in accordance with generally
accepted accounting principles ("GAAP"). MDI agrees to shall use reasonable
efforts to render invoices on a weekly basis to those customers who will
permit billing on a weekly basis.
(ii) "COLLECTIONS" shall mean the amount
of payments received by MDI on Xxxxxxxx directly from the party billed and
payments received by MDI on Xxxxxxxx from any factor who purchases those
Xxxxxxxx, all determined in accordance with GAAP.
(iii) "MINIMUM" for any calendar month
shall mean the sum of $337,500.00 multiplied by the number of months (with
any partial month expressed as a fraction) since the beginning of the Term,
provided the Minimum shall never be greater than $12,150,000.00. The Minimum
shall be calculated as of the end of each calendar month.
(b) AMOUNT AND PAYMENT. The Commission shall be
calculated and payable in accordance with the following provisions:
(i) For the period from December 15, 1994
through February 28, 1995, MDI shall pay to Company a Commission equal to
five and one-third percent (5.33%) of all Collections during the said period
in excess of $843,750.00, which Commission shall be due and payable on or
before March 15, 1995.
(ii) On April 15, 1995 and on the
fifteenth (15th) day of each month thereafter until MDI no longer has
Collections, MDI shall pay to Company, as Commission, an amount equal to: (A)
five and one-third percent (5.33%) of those Collections received from the
Start Date until the last day of the prior calendar month in excess of the
Minimum, MINUS (B) any Commission previously paid by MDI to Company.
(c) EXAMPLE. An Example of the application of
subparagraph (b) (ii) is as follows: If by May 31, 1995, MDI has Collections
of $3,000,000.00, but has already paid Commission of $55,000.00, then the
Commission due on June 15, 1995 would be $7,906.25, calculated as follows:
(i) Minimum equals $337,500 x 5.5 =
$1,856,250.00
(ii) Collections ($3,000,000.00) minus Minimum
($1,856,250.00) = $1,143.750.00
(iii) Multiplied by 5.33% = $60,961.88
(iv) Less Commission previously paid
($55,000.00) = $5,961.88
(d) MONTHLY STATEMENT. Together with each payment
of Commission, or if no Commission is due then on the date that said payment
would otherwise be due, MDI shall provide Company with a statement setting
forth the Xxxxxxxx and Collections of the previous month.
(e) RIGHT OF AUDIT. Company shall have the right
to audit MDI's books and records relating to Xxxxxxxx and Collections no more
than once in any twelve month period. In
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the event that such audit reveals that the monthly statements for the prior
twelve (12) months have under-reported Collections by five (5%) percent or
more, MDI shall reimburse Company for the cost of the audit, in addition to
payment of amount under-reported.
4. INDEPENDENT CONTRACTOR STATUS. Company shall perform
services for MDI pursuant to this Agreement as an independent contractor.
Company will pay all withholding taxes due on behalf of its employees and any
and all income taxes and other taxes of any type or description whatsoever
without withholding or contribution by MDI. Additionally, Company
acknowledges that neither it nor its employees or owners shall not be
entitled to fringe benefits of any nature, as a result of serving as a
consultant pursuant to the terms of this Agreement, including, but not
limited, pension benefits, life insurance, paid vacation, use of company
vehicles, or any other benefits similarly offered by MDI to its employees.
Company is under the control of MDI as to the result of Company's work only
and not as to the means by which such results are accomplished. This
Agreement shall not be construed as a partnership and neither party hereto
shall be liable for any obligation incurred by the other except as provided
elsewhere herein.
5. RECORDS OF MDI. Company, during the term of this
Agreement may work on and be consulted with respect to matters for customers
of MDI. All such matters are highly confidential. Company understand and
agrees that Company shall acquire no rights to any of this information. All
records, notes, memoranda, files, financial statements, client and customer
lists, brochures, documents and all other similar material relating to MDI or
its business or those of its customers (hereinafter referred to as the
"Records") which shall come into possession of Company, shall remain and be
deemed to be the property of MDI. Company shall promptly return any originals
and all copies of the Records to MDI upon request. Upon the termination of
this Agreement for whatever reason, Company shall promptly deliver to MDI the
Records in his possession or delivered to or otherwise acquired by him
concerning MDI or its clients.
6. NON-DISCLOSURE. Except with the prior written consent of
MDI, which consent is within the sole discretion of MDI, Company agrees that
it will not directly or indirectly, during or after the term of this
Agreement, disclose or reveal (except as Company is required to disclose by
court order, summons, subpoena or similar process of law or to Company's
attorney in connection with the foregoing) to or use for itself or others,
the confidential information of MDI or its customers including, but not
limited to proprietary information, secrets, the lists of MDI's customers,
any secret or confidential information or data regarding the business of MDI,
any secret or confidential information or data concerning the customers or
prospective customers of MDI. Such secrets shall include but are not limited
to programs, data systems, processes, computer programs, computer systems,
equipment and configurations, financial information, and pricing policies.
8. DEFAULT. MDI shall not be deemed to be in default of
any of its obligations to Company hereunder, unless and until a Commission
payment has not been made for thirty (30) days after the date due. At such
time the delinquent payment shall accrue interest at the rate of three
percent (3%) per annum above the Wall Street Journal Prime Rate until paid,
and if any payment is not paid within ninety (90) days of the date due, then
Company shall have the right to terminate this Agreement by written notice to
MDI. In such event, Company may,
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at its option either: (i) bring one or more actions against MDI to collect
the Commission as and when it would become due under the terms of this
Agreement, or (ii) bring a single action for liquidated damages calculated as
the greater of (A) the monthly Commission payment for the twelve (12) months
prior to the default or such lesser number of months as the Agreement has
been in effect, multiplied by the number of months remaining during the Term
after the month of default, or (B) the sum of $833,250.00 minus any
Commission previously paid by MDI to Company.
10. MISCELLANEOUS.
(a) This Agreement shall be binding upon and the
benefits shall inure to the heirs, successors and assigns of the parties
hereto, subject to paragraph 10(c) below.
(b) All notices provided for under this Agreement
shall be in writing and shall be sufficient if sent by certified mail to the
following listed addresses of the parties hereto or to such other address as
shall be designated in writing to the other party:
MDI: 000 X. Xxx Xxxxxx
Xxxxxxxx, XX 00000
ATTN: Xx. Xxxxxx Xxxxxxx
With a copy to: Xxxxx Xxxxxxxx, Esquire
Xxxxxx, Heyman, Greenberg,
Xxxxxxxx & Belgrad, P.A.
00 X. Xxxxxxx Xxxxxx, 00xx Xxx.
Xxxxxxxxx, Xxxxxxxx 00000
Company: 000 Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxxx
With a copy to: Xxxxx Xxx Xxxxxxxxxxx, Esquire
Xxxxxx, Xxxxx & Xxxxxxxxx
000 Xxxxxx Xxxxxx
P. O. Box 15859
Stamford, CT 06901-0859
(c) This Agreement is personal to the parties
hereto and may not be assigned,sold or otherwise conveyed by either of them,
except that MDI may assign or sell its rights hereunder in connection with a
sale of all or substantially all of the assets of MDI, provided that at the
time of such sale, MDI shall be required to satisfy all payment obligations
to Company under this Agreement, even if such payments are not yet due.
(d) The failure of any party hereto to enforce at
any time any of the provisions or terms of this Agreement shall not be
construed to be a waiver of such provision or term, nor of the right of any
party thereafter to enforce such term or provision.
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(e) This Agreement constitutes the entire
agreement between MDI and Company regarding rendering procurement services,
and there are no agreement or understandings concerning such Agreement which
are not fully set forth herein or in other agreements referenced herein.
(f) If any provision of this Agreement is invalid
or unenforceable in any jurisdiction, the other provisions herein shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in order to effectuate the purpose and intent of this Agreement,
and the invalidity or unenforceability of any provision of this Agreement in
any jurisdiction shall not affect the durability of enforceability of any
such provision in any other jurisdiction.
(g) The titles of the paragraphs throughout this
Agreement are for convenience and reference only, and the words contained
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or moaning of the provisions of this instrument.
(h) Whenever any provision in this Agreement
assumes a right or responsibility to MDI or Company after termination of this
Agreement, said right or responsibility shall survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have signed, or
caused to be signed these presents.
ATTEST: MEDIA DROP-IN PRODUCTIONS, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxx
---------------------------------- ----------------------------------.
Xxxxxx Xxxxxxx, President
WITNESS: STAMFORD MEDIA GROUP, LLC
By: /s/
---------------------------------- ----------------------------------.
Company
Its:
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