Exhibit 10(c)(viii)
Ehrenkrantz King Xxxxxxxx, Inc.
November 27, 1995
Mr. Xxxxx Xxxxxxx
President
Xxxxxxx Films
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
This is to acknowledge and confirm the terms of our corporate finance agreement
as follows:
(1) The CineMasters Group (the "Company") hereby engages Ehrenkrantz Xxxx
Xxxxxxxx, Inc. ("EKN"), and XXX hereby agrees to render services to the Company
as its corporate finance consultant, financial advisor and investment banker.
(2) During the term of this agreement, EKN shall provide advice to, and consult
with, the Company concerning financial planning, corporate organization and
structure, financial matters in connection with the operation of the business of
the Company, private and public equity and debt financing, acquisitions, mergers
and other similar business combinations, as well as analysis of market
conditions. Said advice and consultation shall be provided to the Company in
such form, manner and place as the Company reasonably requests. In connection
therewith, a representative of EKN may be invited to Directors' meetings and to
participate in executive management discussions upon request of the Company's
management. EKN shall not by this agreement be prevented or barred from
rendering services of the same or similar nature, as herein described, or
services of any nature whatsoever for, or on behalf of, persons, firms, or
corporations other than the Company; provided, however, no services of the same
or similar nature, as herein described, shall be rendered to an entity whose
business is in direct competition with the Company, without the express
permission of the Company.
(3) The Company shall pay to EKN for its consulting services hereunder the sum
of Four Thousand Dollars ($4,000) per month, on or about the first day of each
month of the term of this agreement commencing with the month of December, 1995.
In addition, the Company shall pay to EKN a contingent fee equal to two percent
(2%) of the amount or value of any financing or acquisition in connection with
which EKN renders advisory services to the Company and which transaction is
introduced to the Company by EKN.
(4) The Company will reimburse EKN for out-of-pocket expenses incurred in
connection with its services hereunder, including reasonable attorneys' fees and
the travel and other out-of-pocket expenses of its counsel and other
representatives, provided that any and all expenses in excess of $500 in any
month shall be approved in advance by the Company. These EKN out-of- pocket
expenses will be payable by the Company within ten days of receipt of invoice(s)
from EKN.
(5) The Company hereby grants to EKN a two-year option to purchase One Hundred-
Thousand (100,000) readily saleable shares of the Common Stock of the Company,
at an exercise price of $1.00 per share, provided, however, that the Company may
elect on 30 days notice to terminate such option if the Company gives notice of
termination of the consulting portion of this agreement on such date. This
option shall be promptly evidenced by a warrant agreement in form and substance
reasonably satisfactory to EKN.
(6) The term of the consulting portion of this agreement shall be a two-year
period commencing on December 1, 1995 and continuing through November 30, 1997
provided, however, that either party may terminate this agreement on 30 days
prior written notice given on or after March 1, 1996.
(7) In the event that EKN is primarily responsible for raising funds for the
Company or for arranging for a purchase or other acquisition of assets or the
business of another company or for initiating or consummating any other
financial or corporate transaction on behalf of the Company, the Company will
pay to EKN at the closing of such transaction, a fee in cash equal to the Xxxxxx
formula. This would be 5% of the 1st million, 4% of the 2nd million, 3% of the
3rd million, 2% of the 4th million and 1% thereafter. The Company will issue and
deliver to EKN five-year warrants to purchase a number of shares of the Common
Stock of the Company equal to 10% of the number of shares issued to investors in
the financing or underlying any conversion or other equity rights or privileges
in connection with the financing, at an exercise price equal to the purchase,
exercise or conversion price paid by or applicable to such investors. Any
engagement of EKN by the Company in connection with any such transaction shall
be confirmed by a separate written agreement.
(8) EKN will not disclose to any other person, firm, or corporation, nor use for
its own benefit, during or after the term of this agreement, any trade secrets
or other information designated as confidential by the Company which is acquired
by EKN in the course of performing services hereunder. (A trade secret is
information not generally known to the trade which gives the Company an
advantage over its competitors. Trade secrets can include, by way of example,
products or services under development, production, methods and processes,
sources of supply, customer lists, marketing plans, and information concerning
the filing or tendency of patent applications). Any financial advice rendered by
EKN pursuant to this Agreement may not be disclosed publicly in any manner
without the prior written approval of EKN.
(9) The Company agrees to indemnify and hold EKN, its affiliates, officers,
employees, and agents harmless against all losses, claims, damages, liabilities,
costs, or expenses (including reasonable attorneys' fees) arising out of EKN
entering into or performing under this Agreement, including costs arising out of
any dispute whether or not EKN is a party to such dispute; provided, however,
that this indemnity shall not apply where a court of competent jurisdiction has
found willful misrepresentation, misconduct, or gross negligence on the part of
EKN in performance of its services hereunder. EKN shall also be paid for
preparing for, or testifying in, any legal proceeding.
If for any reason the foregoing is unavailable to EKN or such other indemnified
person or insufficient to hold it harmless, then the Company shall contribute to
the amount paid or payable by EKN or such other indemnified person as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the Company on the one hand
and EKN or such other indemnified person on the other hand but also the relative
fault of the Company and EKN or such other indemnified person, as well as any
relevant equitable considerations; provided that in no event will the aggregate
contribution by XXX and any other indemnified person hereunder exceed the amount
of fees actually received by EKN pursuant to this Agreement. The reimbursement,
indemnity and contribution obligations of the Company under this paragraph 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 successor, assigns, heirs and
personal representatives of the Company, EKN and any other indemnified person.
The provisions of this paragraph (9) shall survive the termination and
expiration of this Agreement.
(10) This Agreement sets forth the entire understanding of the parties relating
to the subject matter hereof, and supersedes and cancels any prior
communications, understandings, and agreements between the parties. This
Agreement cannot be modified or changed, nor can any of its provisions be
waived, except by written agreement signed by all parties.
(11) This Agreement shall be governed by the laws of the State of New York. Any
dispute arising out of this Agreement shall be adjudicated in the courts of the
State of New York or in the federal courts sitting in the Southern District of
New York, and the Company hereby agrees that service of process upon it by
registered mail at the address shown in this agreement shall be deemed adequate
and lawful.
Please confirm that the foregoing correctly sets forth our understanding by
signing the enclosed copy of this letter and returning it to us with payments
for the month of December, 1995 at your earliest convenience.
Very truly yours,
Ehrenkrantz King Xxxxxxxx, Inc.
By: /s/ Xxxxx Xxxxxxxxxxx ACCEPTED AND AGREED:
Xxxxx Xxxxxxxxxxx
President
By: /s/ Xxxxx Xxxxxxx
Title: President
