Exhibit 10.5
IP PROMOTIONS, INC.
March 24th, 2005
Xxxx Xxxxxxxxx
000X Xxxxxxxxxx Xxxxx Xxx
Xxxxxxx, XX 00000
Re: Employment & Compensation Agreement
Dear Xx. Xxxxxxxxx:
This letter confirms our understanding and agreement between Xxxx Xxxxxxxx
(Xxxxxxxx) and IP Promotions, Inc. ("IP Promotions or the Company") with regard
to all matters described below, including, without limitation, the matters
described in the paragraph 1 as follows:
1. IP Promotions hereby engages Xxxxxxxx as the Company's Chief Technology
officer and to serve as a member of the Board of Directors of IP Promotions Inc.
2. Xxxxxxxx hereby accepts the engagement described in paragraph 1 and, in
connection with such engagement agrees to:
(a) to faithfully and to the best of his abilities serve as the Chief
Technology Officer of IP Promotions, Inc.
(b) to faithfully serve as a member of the Board of Directors of IP
Promotions and to act in the best interest of the company; and
(c) to supervise the development of the company's online technology,
(d) to supervise the creation of the budget for the technology relating
purchases that IP Promotions, Inc. will be making subsequent to the
completion of its registered dividend transaction,
(e) to manage all aspects of the company's online presence as well as
all technological assets of the company,
(f) to be ultimately responsible for all aspects of business of and
pertaining to the technology of IP Promotions Inc. including
operations, finance and relationships.
(g) to manage and supervise IP Promotions activities as they pertain to
web design, web hosting, search engine optimization, affiliate program
management, and online advertising, sales, buying and management.
(h) The company may terminate this agreement for failure to perform
above of the stated duties.
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3. The Board of Directors of IP Promotions Inc. shall make available to Xxxxxxxx
all information concerning the business of IP Promotions Inc. which Peteson
reasonably requests in connection with the performance of his obligations
hereunder, including all financial information and forecasts that Xxxxxxxx deems
relevant. All such information provided by or on behalf of the Xxxxxxxx shall be
complete and accurate and not misleading in all material respects, and Xxxxxxxx
may rely upon the accuracy and completeness of all such information without
independent verification.
4. As compensation for the services rendered by Xxxxxxxx hereunder, the Company
shall pay Xxxxxxxx as follows:
(a) IP Promotions Inc. shall issue Xxxxxxxx 200,000 Class A Warrants,
and
(b) Upon the receipt of sufficient funds, IP Promotions Inc. shall pay
Xxxxxxxx an annual salary of $40,000, and any monies due him for work
completed prior to this agreeement. This includes any design or
advising work that was done by Xxxxxxxx for IP Promotions, Inc. that
went unpaid at the time of service; and
(c) IP Promotions, Inc. shall pay Xxxxxxxx 40% of the net profits on
his work as it pertains to web design/hosting, search engine
optimization, and affiliate program management; and
(d) Upon the company obtaining a listing for its common shares on a
major stock exchange either the American Stock Exchange, New York Stock
Exchange or the NASDAQ market, the Company shall issue Xxxxxxxx 500,000
shares of the Company's common stock; and
(e) The shares of the Company's common stock issued to Xxxxxxxx in
4(a), and 4(d) shall carry "piggy back" registration rights allowing
their inclusion in the shares to be registered should an appropriate
registration statement be planned, or "demand registration" rights for
registration via an S-8 Registration statement that Xxxxxxxx shall pay
the expense of should he decide to exercise such "demand registration"
rights.
(f) The company further agrees to compensate Xxxxxxxx in a manner
consistent with his contribution should he develop new technologies or
revenue generating business units at any time in the future. The
specific amount of that compensation will be agreed to should the
situation arise.
5. In addition to any fees paid pursuant to paragraph 4 herein, the Company
shall reimburse Xxxxxxxx for all reasonable out-of-pocket expenses incurred
during the term of this engagement hereunder with respect to the services to be
rendered by Xxxxxxxx. Furthermore, any expenses beyond travel and entertainment
expenses shall be approved in writing, by the Board of Directors prior to
expenditure.
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6. In consideration of Xxxxxxxx'x services contemplated hereby, IP Promotions
agrees to: (a) indemnify and hold harmless Xxxxxxxx against any and all losses,
claims, damages or liabilities to which Xxxxxxxx may become subject arising in
any manner out of or in connection with the rendering of services by Xxxxxxxx
hereunder, unless it is finally judicially determined by a court of competent
jurisdiction that such losses, claims, damages or liabilities resulted directly
from the negligence, bad faith, or willful misconduct of Xxxxxxxx; and (b)
reimburse Xxxxxxxx immediately for all reasonable legal or other expenses
reasonably incurred and actually paid by Xxxxxxxx in connection with
investigating, preparing to defend or defending any lawsuits, claims or other
proceedings naming him as a defendant and arising in any manner out of or in
connection with the rendering of services by Xxxxxxxx hereunder.
7. IP Promotions Inc. agrees: (a) that the indemnification and reimbursement
commitments set forth in paragraph 6 shall apply whether or not Xxxxxxxx is a
formal party to any such lawsuits, claims or other proceedings; and (b) that if
Xxxxxxxx is advised in writing by counsel that there are one or more defenses
available to him that are different from in addition to those available to IP
Promotions Inc., that Xxxxxxxx is entitled to retain separate counsel of his
choice in connection with any of the matters to which such commitments relate.
8. IP Promotions, Inc. and Xxxxxxxx agree that if any indemnification or
reimbursement sought pursuant to paragraph 6 judicially determined to be
unavailable for a reason other than the negligence, bad faith or willful
misconduct of Xxxxxxxx, then IP Promotions Inc. shall contribute to the losses,
claims, damages, liabilities and expenses for which such indemnification or
reimbursement is held unavailable (I) in such proportion as is appropriate to
reflect the relative benefits to IP Promotions Inc. on the one hand, and
Xxxxxxxx on the other hand, in connection with the transactions to which such
indemnification or reimbursement relates, or (ii) if the allocation provided by
clause (I) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (1)
but also the relative faults of IP Promotions Inc. on the one hand, and Xxxxxxxx
on the other hand, as well as any other equitable considerations; PROVIDED,
HOWEVER, that in no event shall the amount to be contributed by Xxxxxxxx
pursuant to this paragraph exceed the amount of fees actually received by
Xxxxxxxx hereunder.
9. Except as contemplated by the terms hereof or as required by applicable law
or pursuant to an order entered or subpoena issued by a court of competent
jurisdiction, Xxxxxxxx shall keep confidential all material non-public
information provided to it by IP Promotions Inc. and shall not disclose such
information to any third party, other than such of its advisors as Xxxxxxxx
determines to have a need to know.
10. This engagement will extend for twelve months from the date hereof and shall
renew automatically thereafter on a month-to-month basis unless either party has
given at least thirty (30) days' prior written notice to the other that it
desires to terminate this engagement; PROVIDED, HOWEVER, that in the event of
such termination, IP Promotions, Inc. shall be responsible for the reimbursement
of expenses referred to in paragraph 5 incurred through date of termination and
the payment of fees under paragraph 4 for transactions of the type contemplated
by this agreement which are concluded during the term hereof or within or within
two (2) years after the day of termination; and provided, further, that the
provisions of paragraphs 6, 7, and 8 shall survive the termination of this
letter and shall be binding upon any successors or assigns of IP Promotions,
Inc.
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(a) In the event that IP Promotions, Inc. shall decide to terminate
this Employment and Compensation Agreement after an application has
been made to upgrade the quality of listing of the Company's common
stock, but prior to its being declared effective, then IP Promotions,
Inc. shall immediately cause to be issued the shares specified in Item
4(d).
(c) In the event that IP Promotions, Inc. shall decide to terminate
this Employment and Compensation Agreement prior to its expiration,
then registration rights specified in Item 4(e) shall remain in effect.
(d) In the event that IP Promotions, Inc. shall decide to terminate
this Employment and Compensation Agreement prior to its expiration,
then IP Promotions, Inc. shall immediately pay Xxxxxxxx two (2) months
salary as specified in Item 4(b).
(e) In the event that Xxxxxxxx shall decide to terminate this
Employment and Compensation Agreement prior to its termination, then
the registration rights specified in Item 4(e) shall remain in effect,
the company shall pay Xxxxxxxx two (2) months salary as specified in
Item 4(b), however the rights to any un-issued shares shall be
forfeited.
11. The terms and provisions of this letter are solely for the benefit of IP
Promotions, Inc. and Xxxxxxxx and their respective successors, assigns, heirs
and personal representatives, and no other person shall acquire or have any
right by virtue of this letter. This letter shall be governed by, and construed
in accordance with, the substantive laws of the State of Georgia without regard
to the principle of conflicts of law, and may be amended, modified or
supplemented only by written instrument executed by parties hereto.
12. The invalidity or enforceability of any provision of this letter shall not
affect the validity or enforceability of any other provisions of this letter,
which shall remain in full force and effect.
13 This letter may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, not withstanding
that all such parties are not signatories to the original or the same
counterpart.
Agreed to & Accepted, Agreed to & Accepted
May 24th, 2005 May 24th, 2005
/S/ Xxxxxxx Xxxxxxx /S/ Xxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxx Xxxx Xxxxxxxxx
President, CEO
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