Exhibit 10-3
SERVICES AGREEMENT
AGREEMENT, dated June 23, 2004, effective as of April 26, 2004, among
@xxxxxxx.xxxxx inc., a New York corporation ("Radical"), AGU Entertainment
Corp., a Colorado corporation ("AGU"), and The Tube Music Network, Inc., a
Florida corporation (the "Tube").
BACKGROUND
The Tube is a wholly-owned subsidiary of AGU and will be launching a 24-hour
music television network.
AGU and the Tube desire to engage Radical to perform certain branding services
for the Tube (the "Project") and Radical desires to provide such services as
more fully set forth herein.
ACCORDINGLY, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Services. Each of AGU and the Tube hereby engages Radical, on a work
for hire basis only, to provide the following branding services in connection
with the Project:
(a) Design a network logo for the Tube.
(b) Create on-air graphic standards and look and feel of the screen,
including type treatments and logo placement, and provide template and broadcast
style guide for future use by the Tube.
(c) Create a template for five promotional campaigns, each
consisting of a minimum of three promotional messages. (d) Develop a minimum of
30 unique interstitials, with one cut-down for each, for an aggregate of 60
interstitials. Each interstitial shall be no less than five seconds in length.
(e) Provide design services for stage one of a website, consisting
of an animated splash page that culminates in presenting contact and network
information, which page shall be designed with future stages of the website in
mind.
(f) Create one top of the hour identification and one bottom of the
hour identification consisting of the full corporate name of the Tube.
(g) Each of the services provided by Radical in (a) - (f) above
shall be performed in a professional manner in accordance with the highest
standards of the media industry and completed to the satisfaction of the Tube.
(h) All campaign material, logos, designs and services provided by
Radical in (a) - (f) above that are approved by AGU or the Tube for use in
connection with the Project and are produced and delivered by Radical (the
"Final Deliverables") shall, upon full payment of the consideration set forth in
Section 3 hereof, be the sole property of AGU and the Tube. All campaign
material, logos, designs and services provided by Radical that do not become
Final Deliverables shall remain the sole property of Radical and/or its agents;
it being understood that to the extent Radical and the Tube mutually agree in
writing, the Tube may be permitted to use original camera footage and xxxxx to
produce future spots that follow the template established by Radical. Except for
the consideration provided in Section 3 hereof, Radical shall not be entitled to
any other compensation whatsoever. Except as specifically provided in this
Section 1(h), nothing herein shall be deemed to grant any license or other
rights to Radical, and Radical shall have no claim to the exclusive ownership or
any right of use of the Final Deliverables.
2. Project Phases. The service described in Section 1 above shall be
provided in four phases as follows:
(a) Phase I shall consist of Radical developing the creative
concepts for the Project and shall be conducted during the period from April 26,
2004 through the week of June 7, 2004.
(b) Phase II shall consist of Radical presenting the creative
concepts for the Project to the Tube and shall be conducted during the period
from June 1, 2004 through the week of June 14, 2004. Upon approval by the Tube
of the creative concepts, Radical shall determine, based upon the Project budget
and the available time for production, the final quantities of the deliverables
set forth in Section 1 (subject to the minimum delivery requirements set forth
therein) and the timetable for delivery in accordance with the schedule for
Phases III and IV of the Project.
(c) Phase III shall consist of delivery by Radical of the campaign
elements agreed upon at the conclusion of Phase II for the Tube's soft launch
scheduled for July 2, 2004. Phase III shall be concluded by July 1, 2004.
(d) Phase IV shall consist of delivery by Radical of the campaign
elements agreed upon at the conclusion of Phase II for the Tube's hard launch
scheduled for September 1, 2004. Phase IV shall be concluded by August 13, 2004.
3. Consideration.
(a) As consideration for the services provided by Radical hereunder,
AGU shall pay to Radical (or its designee) a fee equal to $650,000 (the "Fee").
The Fee shall be consist of $200,000 in cash and 112,500 shares of
non-registered common stock of AGU (the "Shares").
(b) The Fee shall be payable in installments as follows: On or
before each of the Payment Dates listed below, AGU shall (i) pay to Radical, by
certified check or wire transfer of immediately available funds, an amount equal
to $50,000, (ii) deliver to Radical a duly executed stock certificate of AGU
evidencing 25,000 shares of the common stock of AGU and (iii) deliver to Xxxxx
Xxxxxxxx a duly executed stock certificate of AGU evidencing 3,125 shares of the
common stock of AGU. The "Payment Dates" shall mean (A) the execution date of
this Agreement, (B) June 21, 2004, (C) July 10, 2004 and (D) August 10, 2004.
2
(c) In the event that AGU or the Tube require Radical to perform any
services following August 13, 2004, Radical will provide a written estimate of
Radical's charges for such services, and will obtain the written authorization
of AGU or the Tube regarding such estimate before performing such services. AGU
and/or Tube shall pay to Radical any such charges within three days after
receipt of Radical's invoice.
(d) In the event that AGU or the Tube shall terminate Radical's services
at any time, AGU shall immediately pay to Radical any unpaid balance of the Fee
(and other charges pursuant to Section 3(c) above) owing through the date of
termination.
4. Representations and Covenants by AGU and the Tube.
(a) Organization. Each of AGU and the Tube is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
(b) Authority; Enforceability. Each of AGU and the Tube has
requisite power and authority to enter into this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of AGU and the Tube. The Agreement has been
duly executed and delivered by each of AGU and the Tube and constitutes the
legal, valid and binding obligation of each of them, enforceable in accordance
with its terms.
(c) Consents. No consent, waiver, approval, order, or authorization
of, or registration, declaration or filing with, any governmental entity or any
third party is required by or with respect to AGU or the Tube in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated thereby.
(d) Shares. The Shares have been duly authorized, validly issued,
and are fully-paid and non-assessable, free and clear of any claims,
encumbrances, proxies, voting trusts or other voting agreements, calls or
commitments of any kind. Upon delivery of the Shares by AGU, Radical (and its
designee) will have good and marketable title to the Shares, free and clear of
any liens, claims or encumbrances of any kind. The Shares have not been
registered under Securities Act of 1933, as amended, and neither the Shares nor
the consummation of the transactions contemplated by this Agreement are required
to be registered under such act.
(e) Compliance. The Company is in material compliance with all laws,
rules, regulations and orders applicable to it.
5. Representations by Radical.
(a) Organization. Radical is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation.
3
(b) Authority; Enforceability. Radical has requisite power and
authority to enter into this Agreement and to perform its obligation hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Radical. The Agreement has been duly executed and delivered by Radical and
constitutes the legal, valid and binding obligation of Radical, enforceable in
accordance with its terms.
(c) Consents. No consent, waiver, approval, order or authorization
of, or registration, declaration of filing with, any governmental entity or any
third party is required by or with respect to Radical in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated thereby.
(d) Originality of Material. All deliverables, campaign material,
logos, designs and services provided by Radical hereunder as required under
Section 1 shall be of original origin and shall not, to the best knowledge of
Radical, infringe on the intellectual property rights of any third party.
Radical does not license or have any agreement to purchase, make residual
payments or provide other compensation to any third party for any of the
deliverables, campaign material, logos, designs and services provided by Radical
hereunder as required under Section 1.
6. Indemnification.
(a) Radical hereby agrees to defend, indemnify and hold AGU, the
Tube and their respective officers, directors, shareholders, employees, agents,
successors and assigns harmless from and against any and all third party claims,
demands, regulatory proceedings, damages, costs (including, without limitation,
settlement costs), and expenses, including, without limitation, reasonable
attorneys' fees (collectively, "Losses"), arising from (i) any claim pertaining
to libel, slander, defamation, copyright infringement, invasion of privacy,
piracy, and/or plagiarism arising from the use by AGU or the Tube, consistent
with releases and agreements with third parties of any materials Radical creates
or supplies to you, except to the extent that such claim arises from materials
created or supplied by AGU or the Tube or (ii) any breach by Radical of any
representation, warranty, covenant or agreement made by Radical this Agreement.
In all events, AGU and the Tube shall have the right, but not the obligation, to
participate at their own expense in the defense of such suit or proceeding
through counsel of their own choosing.
(b) Other than that for which Radical agrees to indemnify AGU and
the Tube pursuant to Section 6(a) above, each of AGU and the Tube hereby agrees
to indemnify and hold Radical and its officers, directors, shareholders,
employees, agents, successors and assigns harmless from and against any and all
Losses arising from or relating to (i) any activities undertaken by Radical on
behalf of AGU and the Tube, the use by AGU or the Tube or anyone else of any
materials that Radical creates or supplies to AGU and the Tube, or the products
and services of AGU and the Tube, (ii) any content broadcast on the television
network launched by the Tube or (iii) any breach by AGU or the Tube of any
representation, warranty, covenant or agreement made by either of them in this
Agreement. In all events, Radical shall have the right, but not the obligation,
to participate at its own expense in the defense of such suit or proceeding
through counsel of its own choosing.
4
7. Trademarks. With respect to any slogans, tag lines or trademarks
("Marks") created by Radical hereunder, AGU and the Tube shall be responsible
for performing such trademark searches as may be necessary or advisable and for
the registration of any Marks. All such Marks relating to Final Deliverables
shall be solely owned by AGU and/or the Tube as they shall determine in their
sole discretion.
8. Confidentiality. Each party acknowledges that during the course of
Radical providing the services hereunder, each party will have access to
information regarding the other hereto that is non-public, confidential or
proprietary in nature (collectively, "Confidential Information"). Each party
agrees not to disclose Confidential Information without the consent of the
disclosing party other than as reasonably necessary to perform its obligations
hereunder or as required by law. Confidential Information will not include
information which (i) is or becomes publicly available through no act or failure
on the part of the receiving party, (ii) was known by the receiving party prior
to disclosure to the receiving party or (iii) properly comes into the receiving
party's possession from a third party that is not under any obligation to
maintain the confidentiality of the information.
9. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) In the event that any provision of this Agreement shall be held
to be, in whole or in part, void or unenforceable, the remaining provisions of
this Agreement, and the remaining portion of any provision held void or
unenforceable in part, shall continue in full force and effect.
(c) This Agreement may be executed in one or more counterparts, each
of which will be deemed an original and which together shall constitute one and
the same instrument.
(d) This Agreement may not be assigned by either party without the
consent of the other, but shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns upon any assignment so
permitted.
(e) Notwithstanding anything in this Agreement to the contrary, the
terms and provisions of this Agreement are intended solely for the benefit of
each of the parties hereto. This Agreement shall in no way be construed to inure
to the benefit of any third parties.
(f) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and hereby supersedes any prior
written or oral agreements or understandings between the parties with respect to
such subject matter.
(g) The parties agree to execute such further documents and to take
such further actions as may be necessary to effectuate the terms of this
Agreement, including without limitation, the execution and delivery of
production services agreements and such other documents as may be necessary or
appropriate.
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
@XXXXXXX.XXXXX INC.
By: /s/ [ILLEGIBLE]
------------------------
Name: [ILLEGIBLE]
Title: COO/CFO
AGU ENTERTAINMENT CORP.
By: /s/ Xxxxx Xxxx
------------------------
Name: Xxxxx Xxxx
Title: President
THE TUBE NETWORK INC.
By: /s/ [ILLEGIBLE]
------------------------
Name: [ILLEGIBLE]
Title: [ILLEGIBLE]
