XXXXXXXXX FINANCIAL GROUP, INC.
Decmber , 1998
Kids Stuff, Inc.
0000 Xxxxxx Xxxxxxx Xxxxxx, X.X.
Suite 406
Canton, Ohio 44718
Attention: Mr. Xxxxxxx Xxxxxx, President
Dear Xx. Xxxxxx:
This letter, when executed by the parties hereto, will
constitute an agreement between Kids Stuff, Inc. (the "Company") and Xxxxxxxxx
Financial Group, Inc. ("Xxxxxxxxx") pursuant to which the Company agrees to
retain Xxxxxxxxx and Xxxxxxxxx agrees to be retained by the Company under the
terms and conditions set forth below.
1. The Company hereby retains Xxxxxxxxx to perform consulting
services related to corporate finance and other financial services matters, and
Xxxxxxxxx hereby accepts such retention. In this regard, subject to the terms
set forth below, Xxxxxxxxx shall furnish to the Company advice and
recommendations with respect to such aspects of the business and affairs of the
Company as the Company shall, from time to time, reasonably request upon
reasonable notice.
2. As compensation for the services described in paragraph 1
above, the Company shall pay to Xxxxxxxxx a fee equal to 2% of the gross
proceeds raised in the public offering for services to be performed for a period
of one year, commencing on July 3, 2000, which fees shall be paid in advance, in
full, on the date hereof. In addition, the Company will reimburse Xxxxxxxxx for
any and all reasonable expenses incurred by Xxxxxxxxx in the performance of its
duties hereunder, and Xxxxxxxxx shall account for such expenses to the Company.
Such reimbursement shall accumulate and be paid monthly. Nothing contained
herein shall prohibit Xxxxxxxxx from receiving any additional compensation under
paragraphs 3 and 4 herein or otherwise.
3. In addition, Xxxxxxxxx shall hold itself ready to assist
the Company in evaluating and negotiating particular contracts or transactions,
if requested to do so by the Company, upon reasonable notice, and will undertake
such evaluations and negotiations upon prior written agreement as to additional
compensation to be paid by the Company to Xxxxxxxxx with respect to such
evaluations and negotiations. Nothing herein shall require the Company to
utilize Xxxxxxxxx'x services in any particular transactions nor shall limit the
Company's obligations arising under any other agreement or understanding.
4. The Company and Xxxxxxxxx further acknowledge and agree
that Xxxxxxxxx may act as a finder or financial consultant in various business
transactions in which the Company may be involved, such as mergers, acquisitions
or joint ventures. The Company hereby agrees that in the event Xxxxxxxxx shall
introduce to the Company another party or entity, and that as a result of such
introduction, a transaction is consummated, the Company shall pay to Xxxxxxxxx a
fee equal to (i) five percent (5%) of the first $1,000,000; (ii) four percent
(4%) of the second $1,000,000; (iii) three percent (3%) of the third $1,000,000;
and (iv) two percent (2%) of any consideration over $4,000,000 involved in any
transaction. Such fee shall be paid in cash at and subject to the closing of the
transaction to which it relates, and shall be payable whether or not the
transaction involves stock, or a combination of stock and cash, or is made on
the installment sale basis. In addition, if the Company shall, within 36 months
immediately following the termination of this Agreement, consummate a
transaction with any party or entity introduced by Xxxxxxxxx to the Company, the
Company shall pay to Xxxxxxxxx a fee with respect to such transaction calculated
in accordance with this paragraph. Nothing herein shall prevent the Company from
utilizing other individuals or entities in such capacities nor shall limit the
Company's obligations arising under any other agreement or understanding. As
used herein, "Company" shall include any and all subsidiaries and/or affiliates
of the Company.
5. All obligations of Xxxxxxxxx contained herein shall be
subject to Xxxxxxxxx'x reasonable availability for such performance, in view of
the nature of the requested service and the amount of notice received. Xxxxxxxxx
shall devote such time and effort to the performance of its duties hereunder as
Xxxxxxxxx shall determine is reasonably necessary for such performance.
Xxxxxxxxx may look to such others for such factual information, investment
recommendations, economic advice and/or research, upon which to base its advice
to the Company hereunder, as it shall deem appropriate. The Company shall
furnish to Xxxxxxxxx all information relevant to the performance by Xxxxxxxxx of
its obligations under this Agreement, or particular projects as to which
Xxxxxxxxx is acting as advisor, which will permit Xxxxxxxxx to know all facts
material to the advice to be rendered, and all material or information
reasonably requested by Xxxxxxxxx. In the event that the Company fails or
refuses to furnish any such material or information reasonably requested by
Xxxxxxxxx, and thus prevents or impedes Xxxxxxxxx'x performance hereunder, any
inability of Xxxxxxxxx to perform shall not be a breach of its obligations
hereunder.
6. Nothing contained in this Agreement shall limit or restrict
the right of Xxxxxxxxx or of any partner, employee, agent or representative of
Xxxxxxxxx, to be a partner, director, officer, employee, agent or representative
of, or to engage in, any other business, whether of a similar nature or not, nor
to limit or restrict the right of Xxxxxxxxx to render services of any kind to
any other corporation, firm, individual or association.
7. Xxxxxxxxx will hold in confidence any confidential
information which the Company provides to Xxxxxxxxx pursuant to this Agreement
which is designated by an appropriate stamp or legend as being confidential.
Notwithstanding the foregoing, Xxxxxxxxx shall not be required to maintain
confidentiality with respect to information (i) which is or becomes part of the
public domain not due to the breach of this agreement by Xxxxxxxxx; (ii) of
which it had
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independent knowledge prior to disclosure; (iii) which comes into the possession
of Xxxxxxxxx in the normal and routine course of its own business from and
through independent non-confidential sources; or (iv) which is required to be
disclosed by Xxxxxxxxx by governmental requirements. If Xxxxxxxxx is requested
or required (by oral questions, interrogatories, requests for information or
document subpoenas, civil investigative demands, or similar process) to disclose
any confidential information supplied to it by the Company, or the existence of
other negotiations in the course of its dealings with the Company or its
representatives, Xxxxxxxxx shall, unless prohibited by law, promptly notify the
Company of such request(s) so that the Company may seek an appropriate
protective order.
8. The Company agrees to indemnify and hold harmless
Xxxxxxxxx, its partners, employees, agents, representatives and controlling
persons (and the officers, directors, employees, agents, representatives and
controlling persons of each of them) from and against any and all losses,
claims, damages, liabilities, costs and expenses (and all actions, suits,
proceedings or claims in respect thereof) and any legal or other expenses in
giving testimony or furnishing documents in response to a subpoena or otherwise
(including, without limitation, the cost of investigating, preparing or
defending any such action, suit, proceeding or claim, whether or not in
connection with any action, suit, proceeding or claim in which Xxxxxxxxx is a
party), as and when incurred, directly or indirectly, caused by, relating to,
based upon or arising out of Xxxxxxxxx'x service pursuant to this Agreement so
long as Xxxxxxxxx shall not have committed an intentional or willful misconduct,
or shall have acted grossly negligent, in connection with the services which
form the basis of the claim for indemnification. The Company further agrees that
Xxxxxxxxx shall incur no liability to the Company or any other party on account
of this Agreement or any acts or omissions arising out of or related to the
actions of Xxxxxxxxx relating to this Agreement or the performance or failure to
perform any services under this Agreement except for Xxxxxxxxx'x intentional or
wilful misconduct. This paragraph shall survive the termination of this
Agreement.
9. This Agreement may not be transferred, assigned or
delegated by any of the parties hereto without the prior written consent of the
other party hereto.
10. The failure or neglect of the parties hereto to insist, in
any one or more instances, upon the strict performance of any of the terms or
conditions of this Agreement, or their waiver of strict performance of any of
the terms or conditions of this Agreement, shall not be construed as a waiver or
relinquishment in the future of such term or condition, but the same shall
continue in full force and effect.
11. This Agreement is for a term of twelve (12) months and may
not be terminated by the Company. This Agreement may be terminated by Xxxxxxxxx
at any time upon 30 days' notice; provided Xxxxxxxxx shall repay any portion of
their fee which was not earned on the effective date of such termination
($________) multiplied by the number of months paid in advance). Paragraphs 4, 7
and 8 shall survive the expiration or termination of this Agreement under all
circumstances.
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12. Any notices hereunder shall be sent to the Company and to
Xxxxxxxxx at their respective addresses set forth above. Any notice shall be
given by certified mail, return receipt requested, postage prepaid, and shall be
deemed to have been given when deposited in the United States mail. Either party
may designate any other address to which notice shall be given, by giving
written notice to the other of such change of address in the manner herein
provided.
13. This Agreement has been made in the State of New York and
shall be construed and governed in accordance with the laws thereof without
giving effect to principles governing conflicts of law.
14. This Agreement contains the entire agreement between the
parties, may not be altered or modified, except in writing and signed by the
party to be charged thereby, and supersedes any and all previous agreements
between the parties relating to the subject matter hereof.
15. This Agreement shall be binding upon the parties hereto,
the indemnified parties referred to in the Indemnification Provisions, and their
respective heirs, administrators, successors and permitted assigns.
If you are in agreement with the foregoing, please execute two
copies of this letter in the space provided below and return them to the
undersigned.
Very truly yours,
XXXXXXXXX FINANCIAL GROUP, INC.
By: _____________________________
Name:
Title:
ACCEPTED AND AGREED TO AS OF
THE DATE FIRST ABOVE WRITTEN
KIDS STUFF, INC.
By: ___________________________
Xxxxxxx Xxxxxx, President
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