PRINCIPAL PARTICIPATION AND EMPLOYMENT AGREEMENT
Agreement made this 14th day of June, 1999 by and between XXXXXXXX.XXX
a Delaware Corporation, (hereinafter referred to as the "Company"), and Xxxxxx
X. Xxxxxxx, (hereinafter referred to as the "Principal"), in connection with the
financing, production and distribution and management of a independent music
label a division of the Company herein after referred to as Magic Music created
for the purpose of internet musical entertainment.
RECITALS
WHEREAS, the company is a corporate entity established to develop,
finance and distribute independent musical artists over the internet through
it's wholly owned division Magic Music.
WHEREAS, the Principal desires to participate in the management,
acquisition of musical properties, distribution, merchandising, accounts
payable, accounts receivable etc. for Magic music.
WHEREAS, the associate has made independent inquiry into the skills,
talents and knowledge of the Company and it's President in regard to its
reputation and experience in producing or acquiring music properties, internet
knowledge, e-commerce and the Principal further represents and warrants that he
has sufficient experience in financial and business matters to recognize the
advantages and disadvantages of his participation in the financing, producing
and distribution and management of musical properties for the Company.
WHEREAS, the Principal acknowledges that the opportunity referred to
herein is a publicly listed security and subject to the provisions of rule 144
of the Securities Act of 1933.
WHEREAS, the Principal warrants that the Company has completely
familiarized the Principal with all aspects of the Company's operations in
regard to its intended production and distribution of musical properties etc.
over the internet.
WHEREAS, the Principal realizes that the nature and extent of the
success or failure of Magic Music cannot be predetermined and it is therefore
the Principals desire that his contribution to Magic Music and his subsequent
compensation from Magic Music be determined in such manner as will permit him to
accept the risk of failure and likewise benefit upon the commercial success of
Magic music.
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WHEREAS, the Principal represents and warrants that he is able to bear
the economic risks and he understands the high risk nature of the music and
internet industry, and that he further understands that whole or partial loss of
his contribution will result if the aforesaid Magic Music is not commercially
successful.
WHEREAS, the parties hereto wish to enter into a written agreement to
reflect their understanding as to the Principal contribution and participation
in Magic Music.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. CONTRIBUTION TO THE DEVELOPMENT OF MAGICMUSIC: The Principal
hereby agrees to assist in the financing, of Magic Music, the sum of five
thousand dollars in goods and services ($5,000) (hereinafter referred to as the
"contribution"), subject to the conditions contained herein. Said contribution
shall be used by the company as an investment in the Company and/or bridge
financing, development or start up production costs of Magic Music.
2. EXECUTIVE COMPENSATION: The company hereby agrees to compensate the
Principal 75,000 of XXXXXXXX.XXX common shares in a publicly traded Company
listed on the Over the Counter Bulletin Boards (OTCBB) under the symbol (MAGC).
3. Principal Requirements: The Principal agrees to perform all
necessary services for the Company on a full time basis for a period of one
calendar year.
(a). The Principal agrees to perform all tasks normally related to
running a Company as well as all administrative functions.
(b). The company agrees to pay all reasonable expenses the Principal
incurs relating to usual costs during the term of this agreement. The principal
agrees to provide receipts, bills of sale etc. to the Company in regards to all
expenses.
(c). There is no salary from Company to Principal in regards to the
terms and conditions of this agreement. At no time is there to be paid by the
Company to the Principal any other compensation other than is specifically
stated in item #2.
4. OPERATION/MANAGEMENT OF BUSINESS ENTERPRISE; RELATIONSHIP OF THE
PARTIES: All decisions regarding the management, operation and control of Magic
Music shall be vested between the Principal/s and the President of XXXXXXXX.XXX.
During the term of the agreement it is understood that the Principal/s and the
President of XXXXXXXX.XXX will require joint signatures on all checks in regards
to Magic Music's day to day operations.
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(a). The Principal has relied only on the foregoing information and
documents in determining whether to execute this agreement and that, to the
extent necessary, the Principal has obtained and relied upon appropriate
professional advise in regards to this agreement and its tax, legal merits or
liabilities or potential consequences.
(b). The Principal has been informed and understands that the Music and
internet industry is a highly speculative business that involves a high degree
of risk. The Principal further acknowledges that the company has not made any
representations relative to the potential success or profitability of the
Company or Magic Music hereunder.
(c). Except as set forth in this agreement, no representations or
warranties have been made to the Principal by the Company, or by any agent,
employee or affiliate of the Company, and in entering into this agreement the
Principal is not relying upon any information other than that contained in the
agreement, and the results of the Principal own independent investigation.
5. ACCOUNTING AND REPORTS BY THE COMPANY
(a) The Principals shall maintain complete books and records with
respect to its operations of Magic Music for the term of this agreement.
(b) The Principal shall have the right to reasonably examine the books
and records of the Parent Company XXXXXXXX.XXX. Such examination shall be made
during reasonable advance written notice, at the regular place of business of
the company where such books and records are maintained, and shall be conducted
on the Principals behalf and at the Principals expense. Such examination shall
not be made more frequently than semi-annually with respect to any accounting
period. With respect to any accounting period for which a statement has been
rendered by the Company, such examination shall be permitted only for a period
of one year from the date such statement was received by the Principal.
(c). No action, suit or proceeding arising out of this agreement or
concerning the statement or other accounting rendered by the Company hereunder
or to the period of time to which such statement or account relates may be
maintained against the Company unless commenced within one year from the date of
such review of the books and records of XXXXXXXX.XXX
6. ADDITIONAL DOCUMENTS: Each of the parties agrees to execute any
additional documents which may be required or desirable to fully effectuate the
purposes and intent of this agreement or to carry out the obligations of the
parties hereunder, provided that they are not inconsistent with the provisions
of this agreement.
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7. REPRESENTATIONS AND WARRANTIES. The parties hereby mutually
represents to one another that they have the full power, authority, right and
title to enter into and perform this agreement and the transactions contemplated
hereby or referred to herein, and each party has taken all necessary action to
authorize the entry into and performance of this agreement and such
transactions.
8. CEASE OF BUSINESS OPERATIONS: The Company has sustained certain
costs and developed a business relationship with the rights of Magic Music and
failure to conduct business, on behalf of the company could seriously negatively
impact the Principal.
9. SELF-SERVING CONTRACT: Due to the relationship of the parties and
the concessions represented below the company hereby releases any self-serving
contract claim in relation to the Principal.
10. ASSIGNMENT: The Company may assign its rights hereunder to any
firm, corporation or entity without the written authorized consent by the
Principal. However the Principal may not assign any or all of its rights or
obligations hereunder without the prior written consent of the Company. Nothing
contained in this sentence shall prevent the Company from assigning to receive
money hereunder. This agreement shall in no event be construed as a third party
beneficiary contract and is not intended for the benefit of any person or
company whomever except the parties hereto unless allowed herein. No waiver by
one party or breach or default by the other party shall be deemed to be a waiver
of any preceding, continuing or succeeding breach of the same or any other
provision of this agreement. Each party acknowledged that no representation or
warranty not expressly set forth in this agreement has been made or relied upon
by the other party, it being agreed that this agreement constitutes the entire
agreement of the parties regarding the subject matter hereof and supersedes all
prior agreements with respect thereto.
11. FORCE AND AFFECT, WAIVER AND MODIFICATION: This agreement
supersedes and replaces all prior agreements or understandings or negotiations
(whether oral or written) which existed or may have existed between the parties
regarding the subject matter hereof. No waiver or modification or amendment of
all or any of the provisions hereof or of right or remedy hereunder shall be
affected unless in writing signed by the party who is purported to be bound
thereby or against whom such waiver or modification or amendment is asserted,
and then only to the extent set forth in such writing. This agreement may not be
changed or modified or amended or terminated without the written consent of
either executive or company or it's affiliated parties.
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12. APPLICABLE LAW: This agreement shall be construed in accordance
with the laws of the State of Florida and applicable to agreements which are
fully executed and fully performed within said state of which associate states
on this agreement as its residence.
13. LEGAL FEES AND COSTS: The Prevailing party shall be entitled to
reasonable attorneys fee's and costs from the nonprevailing party in any
litigation that arises out of this agreement. In the event of a dispute under
this agreement it shall be submitted first to arbitration under the rules of the
American Arbitration Association and the result of that arbitration shall be
binding between both parties.
14. NOTICES AND ACCOUNTING AND PAYMENTS: All notices, communications,
accounting or payments required to be made hereunder, or which may be given
hereunder, by or to either of the parties, shall be in writing and shall be
delivered personally or by United States mail, first class, to the addresses and
addressed as specified below. These addresses may be changed by either party at
any time by said party giving written notice to the other party. The date of
service of any notices hereunder shall be the date of personal delivery or the
date of mailing, whichever is applicable.
(a) The address set forth below is the true and correct residence of
the associate.
All notices to the Principal shall be sent to:
Xxxxxx X. Xxxxxxx
0000 X.X. 00xx Xx.
Xx. Xxxxxxxxxx, 00000
All notices to the company shall be sent to:
XXXXXXXX.XXX
0000 x.x. 0xx Xx.
Xx. Xxxxxxxxxx Xx 00000
Signed and accepted this 14th day of June 1999.
/s/Xxxxxx X. Xxxxxxx /s /
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Principal Company
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