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TDK Mediactive Inc – ‘SB-2/A’ on 5/9/96 – EX-10.45

As of:  Thursday, 5/9/96   ·   Accession #:  912057-96-8749   ·   File #:  33-80827

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/09/96  TDK Mediactive Inc                SB-2/A                26:1.1M                                   Merrill Corp/FA

Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer   —   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2/A      Pre-Effective Amendment to Registration of           142    740K 
                          Securities by a Small-Business Issuer                  
 2: EX-1        Underwriting Agreement                                54    225K 
 3: EX-4.2      Instrument Defining the Rights of Security Holders    31    107K 
 4: EX-4.3      Instrument Defining the Rights of Security Holders    38    141K 
 5: EX-4.4      Instrument Defining the Rights of Security Holders     9     46K 
 6: EX-5        Opinion re: Legality                                   3     14K 
 7: EX-9.1      Voting Trust Agreement                                 6     27K 
 8: EX-9.2      Voting Trust Agreement                                 1     10K 
 9: EX-9.3      Voting Trust Agreement                                 1     10K 
10: EX-9.4      Voting Trust Agreement                                 1     10K 
11: EX-10.1     Material Contract                                     17     57K 
12: EX-10.2     Material Contract                                     16     57K 
13: EX-10.3     Material Contract                                     13     47K 
14: EX-10.35    Material Contract                                     12     55K 
15: EX-10.36    Material Contract                                     12     55K 
16: EX-10.37    Material Contract                                     12     55K 
17: EX-10.38    Material Contract                                     11     45K 
18: EX-10.39    Material Contract                                     10     40K 
19: EX-10.40    Material Contract                                      1     10K 
20: EX-10.41    Material Contract                                     23     81K 
21: EX-10.42    Material Contract                                      6     22K 
22: EX-10.43    Material Contract                                      5     23K 
23: EX-10.44    Material Contract                                      6     25K 
24: EX-10.45    Material Contract                                      7     30K 
25: EX-10.46    Material Contract                                      2     11K 
26: EX-23.1     Consent of Experts or Counsel                          1      8K 


EX-10.45   —   Material Contract
Exhibit Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Agreement
6Warrant
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CONSULTING AGREEMENT THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into as of April 30, 1996 (the "Effective Date"), by and between ASSI, Inc., a Nevada corporation ("ASSI"), and Sound Source Interactive, Inc., a Delaware corporation (the "Company"). R E C I T A L S A. The Company is a relatively new enterprise which is engaged primarily in developing, publishing and marketing educational interactive computer software for children. B. ASSI has significant expertise in start-up companies such as the Company. C. Since December 1995, ASSI has provided consulting services to the Company. The Company wishes to engage ASSI to continue to provide such services and ASSI wishes to accept such engagement, all on the terms and conditions set forth in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. CONSULTING AGREEMENT. 1.1 TERM. From the Effective Date until November 30, 1996 (the "Term"), ASSI shall provide such consulting services to the Company as the Company may from time to time reasonably request. 1.2 SCOPE OF CONSULTING SERVICES. During the Term ASSI shall, from time to time as reasonably requested by the Company, make its personnel with the appropriate expertise available by telephone or in person to render such advice, consultation and services as may be requested by the Company. The Company and ASSI acknowledge that the services to be provided by ASSI pursuant to this Agreement are of an advisory nature only and shall not involve or require ASSI to be responsible in any way for the management of the Company or its day-to-day operations. The Company agrees that any advice or information provided by ASSI under this Agreement will be independently evaluated by the Company's officers, directors and other outside consultants and that ASSI shall in no way be liable to the Company or third parties for any actions taken by the Company based in whole or in part on such advice or information, other than for advice provided in writing with a willful intent to cause damage to the Company. ASSI makes no representations whatsoever to the Company as to the services or advice to be provided by it under this Agreement.
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2. COMPENSATION. In return for ASSI's past services to the Company and its consulting services to be rendered to the Company under this Agreement, the Company shall pay to ASSI the following: (a) WARRANT. Upon the execution of this Agreement, the Company shall issue to ASSI a warrant to purchase an aggregate of two million (2,000,000) shares of Common Stock of the Company at $4.40 per share, which warrant shall be delivered in the form and subject to the terms and provisions of Exhibit A attached hereto and incorporated herein by this reference (the "Warrant"). The Warrant shall be deemed fully earned upon execution of this Agreement. Upon issuance, ASSI shall acknowledge, accept and agree to be bound by the terms of the Warrant by executing such Warrant where indicated. (b) REIMBURSEMENT OF EXPENSES. In addition, within 30 days after presentation of its demand for payment pursuant to this Section 2(b), ASSI shall be entitled to receive reimbursement of all reasonable and necessary expenses incurred by ASSI in performing ASSI's services hereunder, including all reasonable travel and living expenses of ASSI's personnel while away from home or business at the request of, or in the service of, the Company, such expenses not to exceed $25,000 in the aggregate. Expenses covered by this Section 2(a) shall not include fees and expenses paid pursuant to Section 6(f) of this Agreement. 3. INDEPENDENT CONTRACTOR. ASSI shall, at all times, render services pursuant to this Agreement as an independent contractor and not as an employee, agent or servant of the Company, nor shall ASSI be deemed, by reason of this Agreement or the services performed pursuant hereto, to be an employee of the Company for purposes of withholding employee payroll taxes, contributions, pensions or otherwise. 4. TERMINATION. The Company shall have the right to terminate this Agreement immediately upon written notice to ASSI at any time, provided that the obligations of the Company, Vincent Bitetti and Eric Winston under Sections 2 and 5 hereof shall survive for the full term provided in such Sections or in the documents to which such Sections refer. 5. OTHER AGREEMENTS. 5.1 BOARD REPRESENTATION AND OBSERVER RIGHTS. The Company agrees to appoint one (1) individual designated by ASSI to the Board of Directors of the Company, with this obligation to be effective upon completion of the Company's pending initial public offering. The Company agrees to indemnify and hold harmless such director to the maximum extent permitted by law in connection with such individual's services as director. Such director will be entitled to directors' fees equal to $15,000 per year and shall be granted annual options under the Company's 1995 Stock Option Plan to purchase no less than 10,000 shares of Common Stock of the Company, with the first grant effective as of the date of appointment of such director and at an exercise price of $4.00 per share. In addition, during the term of this Agreement, one individual designated by ASSI shall have the right to receive all notices of and attend as an observer each meeting of the Board of Directors. 2
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5.2 VOTING AGREEMENT. The Company agrees that as a further inducement to ASSI to enter into this Agreement, the Company, Vincent Bitetti and Eric Winston shall enter into a Voting Agreement with ASSI in the form of Exhibit B attached hereto. 5.3 INDEMNIFICATION OF ASSI. The Company agrees to indemnify and hold harmless ASSI, and its successors and assigns, to the maximum extent permitted by law, with respect to any and all claims, losses, damages, liabilities and expenses, which ASSI is or becomes legally obligated to pay as a result of any threatened, pending or completed action, claim, suit, investigation or proceeding ("Proceeding") by reason of the fact that ASSI is or was a consultant to the Company or otherwise resulting from or in connection with this Agreement, except to the extent such claims, etc., are based on advice provided in writing by ASSI with a willful intent to cause damage to the Company. Costs and expenses (including attorneys' fees) incurred by ASSI in defending or investigating any Proceeding shall be paid by the Company from time to time within 30 days of demand by ASSI in advance of the final disposition of such matter, if ASSI shall undertake in writing to repay any such advances in the event that it is ultimately determined that ASSI is not entitled to indemnification under the terms of this Agreement. 5.4 OTHER WARRANTS. ASSI owns other warrants to purchase shares of Common Stock of the Company ("Other Warrants"). In the event of a public offering by the Company involving the sale of warrants by the Company ("Public Warrants"), these Other Warrants are convertible into an equivalent number of Public Warrants with an exercise price and other terms identical to those of the Public Warrants. As a further inducement to ASSI to enter into this Agreement, the Company hereby amends the Other Warrants to provide that upon such a conversion of the Other Warrants into Public Warrants, for so long as ASSI or any Affiliate (as defined below) of ASSI is the record and beneficial owner of any such Public Warrant (i) any provisions of the Public Warrant granting the Company the right to call the Public Warrant for redemption shall not apply to that Public Warrant, (ii) the registration rights set forth in the Other Warrants shall remain in effect with respect to that Public Warrant, and (iii) the Public Warrant shall be exercisable at any time on or after September 1, 1996. For purposes of this Section 5.4, the term "Affiliate" means ASSI or any person or entity controlling, controlled by or under common control with ASSI. For purposes hereof, a person shall be deemed to have "control" of an entity if such person is the owner of a majority voting interest in such entity. 6. MISCELLANEOUS. (a) ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, administrators, executors, successors and assigns. (b) DISPUTE RESOLUTION. Any controversy, dispute, or claim arising out of or relating to the interpretation, performance or breach of this agreement shall be finally determined, at the request of any party, by binding arbitration conducted in Los Angeles County, California in accordance with the then existing rules for commercial arbitration of the American 3
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Arbitration Association. The parties agree that reasonable discovery shall be allowed in arbitration. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall award to the prevailing party, in addition to the costs of the proceeding, that party's reasonable attorneys' fees. (c) ATTORNEYS' FEES. In the event of any controversy, claim or dispute between the parties hereto arising out of or relating to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, including without limitation reasonable attorneys' fees and reasonable accountants' fees. (d) NOTICE. All notices under this Agreement shall be effective upon: (i) personal delivery to the recipient; or (ii) telecopier transmission so long as the original notice is deposited in overnight mail (Express Mail) or overnight courier service (e.g., Airborne, Federal Express, etc.); or (iii) three (3) business days after deposit in the United States mail, registered, certified, postage fully prepaid and addressed to the respective parties as follows: To ASSI: ASSI, Inc. Two ADP Plaza 2000 Crow Canyon Place, Suite 420 San Ramon, CA 94583 Attn: President Telecopier: (510) 277-3962 With a copy to: Hewitt & McGuire 19900 MacArthur Boulevard, Suite 1050 Irvine, CA 92715 Attn: William L. Twomey Telecopier: (714) 798-0511 To the Company: Sound Source Interactive, Inc. 2985 E. Hillcrest Drive, Suite A Westlake Village, CA 91362 Attn: Vincent J. Bitetti Telecopier: (805) 495-0016 With a copy to: McDermott, Will & Emery 1850 K Street, N.W., Suite 500 Washington, DC 20006 Attn: Robert Kalik Telecopier: (202) 778-8087 or to such other address as the parties may from time to time designate in writing. 4
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(e) EXPENSES. The Company agrees to pay reasonable fees and expenses of counsel incurred by ASSI in connection with the negotiation and documentation of the transactions contemplated by this Agreement up to a maximum of $12,500. (f) GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (g) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. (h) WAIVERS. No waiver of compliance with any provision of this Agreement shall be binding unless executed in writing by the party making the waiver. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. (i) AMENDMENTS. Any amendment to this Agreement shall be in writing and signed by the parties hereto. (j) INVALIDITY. In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. (k) TITLES. The titles, captions or headings of the Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. (l) MULTIPLE COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written. "ASSI" "Company" ASSI, INC., SOUND SOURCE INTERACTIVE, INC., a Nevada corporation a Delaware corporation By: /s/ Louis Habash By: /s/ Vincent J. Bitetti -------------------------------- -------------------------------- Name: Louis Habash Name: Vincent J. Bitetti ------------------------------ ------------------------------ Its: President Its: CEO ------------------------------- ------------------------------- 5
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EXHIBIT A WARRANT [See Exhibit 4.4]
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EXHIBIT B STOCKHOLDER VOTING AGREEMENT [See Exhibit 9.1]

Dates Referenced Herein

Referenced-On Page
This ‘SB-2/A’ Filing    Date First  Last      Other Filings
11/30/961None on these Dates
9/1/963
Filed on:5/9/96
4/30/961
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Filing Submission 0000912057-96-008749   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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