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EXHBIT 10.45
[Global Media Management Group, Letterhead]
March 23, 1998
The Xxxxxx Entertainment Company
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Management Consulting Agreement
This letter will confirm the engagement of Global Media Management Group, LLC
("Global") as an Independent Contractor, to provide certain management
consulting services for The Xxxxxx Entertainment Company ("the Client" or "the
Company"). The following are the terms and conditions of our Agreement.
1. Our services will consist of providing certain management services and
assisting in formulating financial, management and operational
strategies/plans for the affairs of the Company. Services which may be
provided by Global include, but are not limited to, the following: (1)
formulating financial, management and/or operating plans; (2) advising
and consulting with other operating personnel with respect to operations
and management of the Company's business and business plans; (3)
reviewing, evaluating, participating in various negotiations with
strategic parties, creditors, lenders, lessors, etc...; (4) directing
and/or assisting other operating personnel with the specific activities
required to implement and complete any operating changes; (5) analyzing
and advising in areas which affect cash flow, marketing, communications
and acquisition/divestiture; (6) possible acquisitions and/or sale of
the Company; (7) evaluating the Company's organization structure and its
personnel, and assisting with personnel changes and areas to reduce
costs; (8) designing and monitoring systems and controls to help control
daily operations, relationships with creditors, including financial
institutions; and (9) otherwise assisting in such matters as will aid in
accomplishing the foregoing. Global will provide the Board of Directors
from time to time with written reports concerning the Company and
Global's activities in connection therewith and will meet with the Board
at least once per calendar quarter, at a time convenient to all parties,
to review the foregoing. Representatives of Global shall be entitled to
exercise such power and authority as is
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commensurate with their positions; provided, however, that nothing
contained herein is intended to limit the power and authority of the
Company's Board of Directors as provided under applicable law.
2. The services will be rendered by various individuals, including, but not
limited to, the following: Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxxxx
Xxxxxx and other consultants as appropriate. Such other consultants
shall be provided to, and paid by Company at Global's actual cost
therefor. Xxxxxxx X. Xxxxxx shall serve as interim Chief Executive
Officer of the Company; Xxxxxxx X. Xxxx shall serve as interim Chief
Financial Officer of the Company; and Xxxxxxx Xxxxxx shall direct the
Business Affairs of the Company. Such services shall be for such portion
of their business time as is reasonably necessary to perform Global's
services required hereunder. Such services shall be non-exclusive and
shall not be required to be rendered on a full time basis. Global
reserves the right to utilize or substitute other consultants, not named
here, as required and as determined in its sole discretion, provided,
however, that any replacement for the services of Xxxxxxx X. Xxxxxx
and/or Xxxxxxx X. Xxxx shall be subject to the prior written approval of
the Company's Board of Directors.
3. The terms of our compensation are as follows:
(a) Compensation: Seventy Five Thousand Dollars ($75,000.00) per
month for the services of Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
and Ten Thousand Dollars ($10,000.00) per month for the services
of Xxxxxxx Xxxxxx, all payable monthly in advance on the 23rd of
each month of the Initial Term, for six (6) months commencing on
March 23, 1998 and continuing through September 22, 1998 (the
"Initial Term") unless extended pursuant to the mutual agreement
of Global and the Company. Services for consultants other than
Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx shall be payable within
ten (10) days of Xxxxxx'x receipt therefor; provided, however,
that any additional consultants paid by Global whose cost in the
aggregate exceeds one thousand dollars ($1,000.00) per month
shall be subject to approval by the Company's Board of
Directors.
(b) Warrants, etc.: Warrants for two hundred thousand (200,000)
shares of the Company's common stock, issuable to such
representatives of Global as Global shall specify, fully vested
as of the commencement of the Initial Term, exercisable over a
five (5) year period at an exercise price of $12.75 per share
(subject to customary anti-dilution protection in the event of
stock splits, combination, stock dividends, recapitalization and
similar events), together with one (1) demand and so called
"piggyback" registration rights concerning the underlying common
stock on terms no less favorable than any similar registration
rights outstanding (the cost for making such rights effective to
be borne wholly by the Company). In addition, in connection with
the election of Xxxxxxx Xxxxxx and Xxxxxxx Xxxx as officers of
the Company, the Compensation Committee has awarded fully vested
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The Xxxxxx Entertainment Company
March 23, 1998
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stock options to purchase an aggregate of fifty thousand (50,000)
shares of common stock (38,800 shares to Xx. Xxxxxx; 9,700 shares
to Mr. Xxxx and 1,500 shares to Xx. Xxxxxx at the exercise price
of $12.6875 per share under the Company's 1997 stock option plan.
(c) Expenses: All out-of-pocket expenses for necessary, Company
related travel (including reimbursement for first class
commercial travel for Messrs. Xxxx and Xxxxxx, including
reimbursement at first class rates for the use of corporate
aircraft), reproductions, printing, graphics, messenger
services, overnight mail, shipping, and other third-party
charges will be billed to you at our cost. You have authorized
us to advance such costs and make such out-of-pocket
expenditures as may be reasonably necessary in connection with
our services.
4. Global is not a law firm or accounting firm. As such we will not be
providing legal or accounting advice, opinions on legal matters,
drafting or reviewing legal documents, nor representing the Company on
any legal or accounting matters.
5. Because the information needed to manage the Company, or to advise on a
strategic/business plan, will be based on assumptions and information
provided by the Company, its employees and Directors, the Company's
advisors, appraisers, accountants, and lawyers, the Company will assume
full and complete responsibility therefor. The Company understands and
acknowledges that Global's work effort, analysis and advice are
inherently subjective and that reasonable professionals/individuals
reviewing the same information may reach entirely different conclusions.
The Company releases Global from all responsibility as to the
effectiveness of its services provided pursuant to this agreement or the
reliability and accuracy of the information provided to and prepared by
Global, provided, however, that the Company does not release Global from
the gross negligence or willful misconduct of its officers or agents.
While we will use our reasonable best efforts and judgement in assisting
the Company, in light of the Company's circumstances, we cannot
guarantee any particular results or assume responsibility for the
Company's ultimate success.
6. Either the Company or Global may terminate this agreement at any time
after the expiration of the Initial Term, with or without cause. Upon
termination, all fees and expenses incurred throughout the close of
business on the date such termination is effective are due and payable.
Global (including its representatives and consultants) reserves the
right to stop work at any time if any invoices have not been paid.
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7. The Company shall indemnify, defend and hold harmless Global, its
officers, directors, representatives, consultants and employees from and
against any and all claims, damages, losses, liabilities (and reasonable
fees and costs incurred in the defense thereof) incurred by Global, its
principals, representatives, consultants and employees (collectively
"Liabilities") to the extent arising from, or in connection with this
agreement or the performance of services by Global or such other persons
pursuant to this agreement. The foregoing indemnification shall not
extend to Liabilities resulting from gross negligence or willful
misconduct by Global, its officers, directors, employees or authorized
agents as determined by a final non-appealable judgement of a court of
competent jurisdiction.
8. Global acknowledges that in connection with the services to be rendered
by Global pursuant hereto, Global may obtain certain written and
non-written information pertaining to the nature and operations of the
Company of a confidential nature. Global agrees that Global will not at
any time during or subsequent to the term of this Agreement or any
extension hereof, without the consent of the Company, knowingly disclose
to any third party whatsoever any such confidential information, except
as required by law or regulation or as reasonably deemed necessary by
Global or its representatives in the performance of Global's duties.
9. Because of the breadth and nature of Global's operations, Global, its
principals, representatives, consultants and employees may work for, or
may acquire and/or manage other businesses or clients, which may be
creditors or competitors of Company and of whose interests otherwise may
be opposed to that of the Company, for which Global may work in an
unrelated matter. Please be assured that, despite any such
representations, we strictly preserve all client confidences and pursue
the interests of each of our clients. The Company agrees that it does
not consider such concurrent employment or acquisitions, in unrelated
matters, of the Company, its principals, representatives, consultants or
employees and any other client or business of Global, its principals,
representatives, consultants or employees to be inappropriate, and
therefore waives any objections to any such present or future concurrent
assignments; provided that Global notifies the Company's Board of
Directors if it is separately providing, or agrees to separately
provide, consulting or other similar services to, or if its principals
knowingly invest in, other companies with which the Company is engaged
or proposes to engage in material business transactions during the term
of this agreement (and of which Global is aware with respect to such
other company's engagement with Company).
10. This agreement shall be governed and construed pursuant to the laws of
the State of California with respect to contracts wholly entered into
and performed therein. Any actions which may be brought by reason of
this agreement shall only be brought in the courts, State or Federal,
located within the County of Los Angeles for the State of California. If
either of us do institute any action or proceeding with respect to the
Agreement, the prevailing party will be entitled to reasonable fees,
costs and expenses of attorneys, accountants, and other professionals
and consultants.
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The Xxxxxx Entertainment Company
March 23, 1998
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11. This agreement, and the agreements contemplated hereby, constitutes the
entire understanding between Company and Global regarding our services.
Further, this agreement supersedes and replaces any prior agreements
between the parties regarding Global's performance of services involving
the Company. By executing this agreement, you acknowledge that you have
read it carefully and understand all of its terms. This agreement cannot
be modified except by further written agreement signed by each party.
If the scope of services, compensation, terms and conditions confirm your
understanding, please sign the enclosed copy of this letter and return it to us
with the required payment for the first month of the Initial Term. By executing
and delivering a copy of this letter, the Company warrants and represents that
the retention of Global, on the terms set forth herein, has been duly authorized
by the Company's Board of Directors.
Sincerely,
Global Media Management Group, LLC Accepted By:
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Xxxxxxx X. Xxxxxx, President The Xxxxxx Entertainment Company
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(Date)
