EXHIBIT 10.36
August 12, 2005
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Chairman & CEO
Advanced Aesthetics, Inc.
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Dear ▇▇. ▇▇▇▇▇▇▇▇:
The purpose of this letter agreement ("Agreement") is to set forth the terms and
conditions that have been agreed upon by Mandalay Integrated Media
Entertainment, LLC ("MIME") and Advanced Aesthetics, Inc. ("AAI") regarding
certain branded entertainment consulting services to be provided by MIME.
In this regard, MIME and AAI have agreed as follows:
1. TERM - The initial term of this Agreement (the "Term") will commence
on October 1, 2005 and will continue through September 30, 2009. Notwithstanding
the foregoing, this Agreement is expressly contingent upon AAI undertaking [ a
reverse public company merger] with the result being shares of its stock being
traded on a public stock exchange no later than January 1, 2006. If AAI fails to
meet this deadline, then this Agreement shall terminate effective on the January
1, 2006 and the parties shall have no further obligation to each other except
that AAI shall pay MIME $100,000 for services rendered up to January 1, 2006.
2. SERVICES - In consideration granting of the Shares (as hereinafter
defined) to MIME by AAI, MIME shall use commercially reasonable efforts to
provide non-exclusive branded entertainment consulting services to AAI during
the Term, which may include assistance, consultation, creative, introductions or
other similar services in the following areas:
(a) Work with AAI to develop original content, programming or
other branded entertainment platforms designed to promote AAI
and its services (all of which shall be owned 50% by AAI and
50% by MIME);
(b) Facilitation of relationships and alliances designed to
improve the visibility and image of AAI and its business,
(c) Facilitation of new business opportunities designed to enhance
and expand the core business and capabilities of AAI;
(d) Provide introductions and access to MIME's various branded
entertainment relationships and resources, where appropriate,
based on the needs and goals outlined by AAI; and
(e) MIME will make a designee(s) reasonably available for
meetings, conference calls, possible travel and other
reasonable requests in the due course of business deemed
necessary within reasonable notice.
(f) Included in Exhibit "A" attached to and incorporated herein by
reference is a list of examples which the parties may desire
to pursue. As all of the items on Exhibit A are contingent
upon third party approval, it is understood and agreed that
MIME cannot guarantee third party acceptance of AAI
initiatives and that certain initiatives will require
additional consideration from AAI and that AAI will evaluate
each opportunity on a "one-off" basis in its sole discretion.
Under no circumstances shall a failure by a third party to
accept the terms of AAI be considered a breach of this
Agreement between AAI and Mandalay.
3. COMPENSATION - In consideration for MIME providing services in the
areas defined in Paragraph 2 during the Term, AAI hereby agrees to grant to MIME
400,000 unrestricted shares of AAI Common Stock (the "Shares"). The Shares shall
be granted to MIME in three (3) installments. The first installment of 200,000
Shares shall be granted to MIME on January 1, 2007. The second installment of
100,000 Shares shall be granted to MIME on January 1, 2008. The third and final
installment of 100,000 Shares shall be granted to MIME on January 1, 2009. Once
the Shares have been granted to MIME, the Shares shall be MIME's to dispose of
as it deems fit, in its sole discretion.
In addition to the Shares outlined above for services rendered,
Mandalay and AAI to agree to negotiate, in good faith, additional
compensation/commissions for developing certain business opportunities and/or
effectuating sales. The parties shall enter into a more formal agreement(s) on
such additional compensation to effectuate their intent as these cases arise.
4. EXPENSE REIMBURSEMENT - The Compensation described above does not
include travel, entertainment and/or other expenses that may be incurred by MIME
in the fulfillment of the services provided to AAI. AAI agrees to reimburse MIME
for all reasonable expenses incurred in the fulfillment of its services
hereunder. MIME understands and agrees that any single expense that exceeds
$500.00 will require approval from AAI prior to expense being incurred. AAI will
promptly reimburse MIME's expenses, but in any event, no later than ten (10)
days after AAI has received an invoice detailing the expenses incurred.
5. EVENTS OF DEFAULT - The following shall be deemed to be "Events of
Default," and shall entitle the parties to the remedies specified in Section 6
below:
(a) Events of Default by MIME: A material breach by MIME of any of
MIME's material obligations under the Agreement (i.e. continued failure to
return AAI calls, no attempt to schedule meetings or make introductions for AAI,
failure to give input on AAI business) which breach is not cured within thirty
(30) days following receipt of written notice from AAI specifying the breach,
or, if such breach is not able to be cured within said 30-day period, if MIME
fails to commence to cure such breach within said 30-day period and thereafter
fails to diligently proceeds to cure such breach. For clarification purposes, a
continued failure by third parties to accept AAI initiative shall not be
construed a Event of Default.
(b) Events of Default by AAI:
(i) The failure of AAI to grant the Shares to MIME within five
(5) days of when due.
(ii) Any other material breach by AAI of any of AAI's other
material obligations under this Agreement, which breach is not cured within
thirty (30) days following receipt of written notice from MIME specifying the
breach, or, if such breach is not able to be cured within said 30-day period, if
AAI fails to commence to cure such breach within said 30-day period and
thereafter fails to diligently proceeds to cure such breach.
(iii) If AAI makes an assignment for the benefit of creditors, or a
trustee, receiver or similar officer of a court or governmental authority with
jurisdiction over the affairs or assets of AAI is appointed for AAI for a
substantial part of its property, whether with or without its consent, or an
action for bankruptcy, insolvency, composition, reorganization or liquidation
proceedings is instituted by or against AAI, and if such proceedings shall not
be dismissed within sixty (60) days from the date of institution thereof.
6. REMEDIES ON DEFAULT -
(a) AAI's Remedies - In the event of the occurrence of any of the
foregoing Events of Default by MIME, AAI shall have the right to elect to
terminate this Agreement by giving MIME written notice of such termination (a
"Termination Notice"). In the event that AAI so elects to terminate this
Agreement, or in the event of any other termination of this Agreement as
provided herein, AAI's sole and exclusive remedy will be that AAI will receive a
refund of any portion of any Fee it may have pre-paid to MIME, if any, or any
portion thereof (pro rated on the basis of a 365-day year), following the
effective date of such Termination Notice (the "Termination Date"), which refund
will be made by MIME to AAI within thirty (30) days following the Termination
Date.
(b) MIME's Remedies - In the event of the occurrence of any of the
foregoing Events of Default by AAI, then MIME will have the right to elect to
terminate this Agreement by giving AAI a Termination Notice. In the event that
MIME so elects to terminate this Agreement, then within thirty (30) days
following the effective date of such Termination Notice, AAI shall grant to MIME
the remaining Shares due to MIME through the end of the Term. Notwithstanding
the above, nothing contained herein shall be deemed or construed so as to
require MIME to terminate this Agreement following the occurrence of an Event of
Default by AAI.
(c) Other than the termination rights and remedies expressly provided
for herein, and the indemnification provisions and any rights or remedies
relating thereto provided for in this Agreement, neither party shall have any
other recourse against the other in connection with this Agreement. Except for
the rights and remedies expressly provided for in this Agreement, each
party hereby waives any and all other rights or remedies to which they may be
entitled pursuant to or in connection with this Agreement, whether at law, in
equity, or otherwise.
7. CONFIDENTIALITY - All information and materials provided to MIME by
AAI to assist MIME in the performing of its obligations hereunder shall be held
in strict confidence by MIME. Any materials containing any such confidential
information shall be retuned to AAI, at its request, at the expiration or
termination of this Agreement. This confidentiality shall survive the Term and
the duties and obligations set forth in this paragraph shall be reciprocal with
respect to any confidential information received by AAI from MIME. The parties
further agree that the terms of this Agreement, including without limitation
financial terms and consideration received by either party, shall be deemed
confidential information. Notwithstanding the foregoing, the parties may desire
to issue statements or press releases ("Press Release") to the public during the
Term. Prior to any issuance of any Press Release, the parties must mutually
approve, in writing, all aspects of the Press Release including without
limitation the content, timing and media outlets for distribution.
8. INDEMNIFICATION - AAI shall, and hereby does undertake to hold MIME
free and harmless from and indemnify MIME against any and all loss to, claims
of, damages to, expenses of, or injuries to any person, property (including
reasonable outside attorney's fee incurred by MIME), which may be claimed or
levied against MIME, based upon, or relating to, any of MIME's services
hereunder. This indemnity shall survive any termination or expiration of this
Agreement. MIME agrees to indemnify AAI and hold AAI harmless from and against
all liability, including all actions, claims, damages, costs and reasonable
outside attorney's fees, which AAI may incur resulting from willful misconduct
on MIME's part.
9. ASSIGNMENT - It is expressly understood and agreed by the parties
that: (i) MIME shall have the right to assign, pledge, mortgage, hypothecate or
transfer any or all of MIME's rights, including without limitation, MIME's right
to receive the Fee and any other payments due to MIME hereunder, or any portion
thereof, and (ii) MIME shall be entitled to assign or transfer this Agreement,
in whole or in part, to its principals ("Mandalay"), or any entity owned or
controlled by, or under common control with, MIME or Mandalay; provided that the
assignee or transferee undertakes all of MIME's obligations hereunder. Except
for the foregoing assignments, this Agreement may not be assigned by either
party, nor may either party's duties hereunder be delegated, without the prior
written approval of the other party, which approval may be given or withheld in
such other party's sole discretion.
10. GOVERNING LAW - The rights and obligations of the parties hereto
shall be governed by and construed in accordance with the internal substantive
laws of the State of California, without regard to California's choice of law
doctrine. Each party hereby irrevocably and unconditionally agrees not to
commence any legal action relating to this agreement except in a state or
federal court located in Los Angeles County and agrees not to plead or claim in
any such court that any such action brought has been brought in an inconvenient
forum.
11. STATUS OF PARTIES - At all times during the Term of this Agreement,
MIME and AAI shall be and remain independent contractors, and nothing contained
in this Agreement shall be deemed or construed as creating any joint venture,
agency or employment relationship between
the parties or their respective agents, employees or representatives, other than
that of independent contractors.
12. AUTHORITY - MIME and AAI each represent and warrant to the other
party that they have all necessary right, power and authority to enter into this
Agreement and to fully perform each and all of their respective obligations
hereunder and to grant to the other party all of the rights, privileges and
benefits provided for in this Agreement.
15. EFFECT - The parties hereby acknowledge that the services provided
under this Agreement are unique and personal in nature. Subject to the
restrictions on transfer and the other assignment provisions expressly provided
for in this Agreement, this Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and to their respective successors and
permitted assigns.
16. NOTICES - Any notices required or permitted under or pursuant to
this Agreement shall be in writing and shall be deemed delivered by personal
delivery, registered or certified mail (postage prepaid, return receipt
requested), Federal Express or other commercial overnight or second day delivery
service, or by facsimile, with confirmation copy to follow by one of the other
means listed herein, to the parties at following addresses:
To MIME: c/o Mandalay Integrated Media Entertainment, LLC
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Attention: ▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
To AAI: c/o Advanced Aesthetics, Inc.
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Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile number: ( )
All notices or other communication shall be deemed delivered upon
receipt by the other party. Either party may change the address at which it
receives notices by notifying the other party in accordance with the provisions
of this paragraph.
17. ENTIRE AGREEMENT - This Agreement expresses and contains the entire
agreement between the parties, and supersedes and replaces any prior or
contemporaneous agreements, understandings, or arrangements between the parties,
whether verbal or written. This Agreement may not be modified or amended except
by a written instrument signed by both parties.
18. HEADINGS - The headings contained in this Agreement are for
reference and convenience purposes only and are not to be used or construed in
the interpretation of the terms and provisions of this Agreement.
If the foregoing meets with your understanding of the agreement between MIME and
AAI regarding the branded entertainment consulting services provided herein,
please so indicate by signing, dating and returning the enclosed copy of this
Agreement. We look forward to a long and mutually rewarding relationship between
MIME and Advanced Aesthetics, Inc.
Sincerely,
MANDALAY INTEGRATED MEDIA ENTERTAINMENT, LLC
By: ___________________________
AGREED TO AND ACCEPTED BY:
ADVANCED AESTHETICS, INC.
By: ___________________________ Date: ____________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President & CEO
EXHIBIT A
The following are examples of potential ideas which the parties may desire to
pursue during the Term of this Agreement.
I. Develop a Mobile Traveling AAI Branded Vehicle initiative that
can be utilized to deliver beauty and aesthetics to and from
the studio and/or network environments. This vehicle or fleet
of vehicles will also further the AAI Brand through a direct
"one on one" grass-roots impression basis. This initiative
also has the ability to penetrate the fashion and modeling
segment of the marketplace as well.
II. Develop and Produce the first ever "Aesthetics" Show similar
in concept to the fashion shows in ▇▇▇▇▇, ▇▇▇▇▇, London and
NYC that literally drive their respective industries trends,
creations and purchases on a seasonal basis. The initial
thought is to create a show in Europe (Paris or Milan) and a
show in the United States (NYC or LA) that will set the
landscape for the upcoming year in the industry. The parties
anticipate that the production of the show (not unlike
traditional film or TV projects) will be financed through
third party and the underlying asset of the property will be
owned 50% by AAI and 50% by Mandalay.
III. Leverage Mandalay's unique reach within the Entertainment
business to develop a plan to integrate AAI into appropriate
awards shows and/or other viable properties that make sense
for the AAI Message and/or Brand (i.e.: Golden Globes, TV
Guide). Possibly develop a brand new party or integrate AAI
into an existing pre or post party that is highly visible that
will accomplish the same outcomes.
IV. Colllaborate on the development of a "JINGLE" or distinctive
audio signature for the AAI Brand.
V. Utilize the unique Mandalay relationship base to create
association and relationships with key Agents and/or Managers
within the Entertainment community that will be able to bring
value to the AAI Brand through their association with highly
visible and respected talent.
VI. Mandalay will act as Branded Entertainment and Integrated
Media partner to AAI and will reasonably utilize and leverage
all appropriate resources to develop and position the AAI
Brand in a desired light.
VII. AAI and Mandalay will release a series of PR statements
announcing the relationship and pronouncing the "first ever"
intersection between the Entertainment and Beauty (The Toll
Booth) space. AAI and Mandalay will lend both parties PR
resources to the initiative. . All aspects of these press
releases,
including without limitation, the content, distribution and
timing of the press release shall be mutually approved by both
AAI and Mandalay.
It is understood that Mandalay cannot guarantee third party acceptance of AAI
initiatives and that certain initiatives will require additional consideration
from AAI and that AAI will evaluate each opportunity on a "one-off" basis in its
sole discretion. Under no circumstances shall a failure by a third party to
accept the terms of AAI be considered a breach of the agreement between AAI and
Mandalay.
