Exhibit 10.6
AGENCY AGREEMENT
This Agency Agreement ("Agreement") is made and entered into as of this 1st day
of January 2004, by and between FreeHand Systems, Inc., ("Client") a Nevada
Corporation with offices at 00 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000 and Direct
Response Specialists, Inc. ("Agency") a Nevada Corporation with offices at 00
Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000.
Whereas, subject to the terms and conditions set forth in this Agreement, Client
hereby retains Agency as an independent contractor as Client's exclusive
provider of advertising and direct marketing services to Client for a period of
two (2) years (the "Period") from the date of execution of this Agreement to
provide services as enumerated hereinafter below. Thereafter, the Agreement will
be extended on month-to-month basis, subject to 30-day cancellation notice by
either party to the other, subject to Item #7 below, Termination Clause.
1. SERVICES TO BE PROVIDED BY AGENCY. In exchange for fees as set forth
hereinafter, Agency shall provide the following services, subject to Client
approval of all advertising and direct marketing efforts:
a) Creation of all advertising and collateral materials required by
Client.
b) All media purchases required for such advertising in print, TV and any
other media.
c) Creation, production and mailing of direct mail materials for Client
company's product(s).
d) List evaluation and recommendations as they relate to mailings or other
uses described in a), above.
e) Evaluation of test and final marketing projects to determine their
success and to formulate recommendations for future direct marketing
and advertising efforts.
f) Coordination of fulfillment efforts required as a result of any
advertising and direct marketing efforts.
All direct costs incurred by Agency on behalf of Client, such as, but not
limited to, the development and production of mailing pieces, printing, media
costs, postage, etc shall be paid by Client in a timely manner and in accordance
with the terms of each invoice for said services.
2. FEE AGREEMENT. Agency shall receive a monthly fee of nine thousand dollars
($9,000) each month or a greater amount if services provided at the request of
Client exceed fee agreement, for the first six (6) months of this agreement,
accelerating to twelve thousand dollars ($12,000) per month, each month
thereafter for the term of this agreement. Services provided shall be billed by
the fifth (5th) of the latter month. In addition, Agency shall receive a
one-time bonus in the form of 60,000 shares of Preferred Series B shares of the
Direct Response Specialists, Inc.
00 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000
650.917.3737
Client Corporation valued at $1.00 per share in exchange for Agency's
forbearance over the last two years in working with Client on its payables to
the Agency.
Agency shall xxxx Client for services rendered to Client at its standard rates.
In addition, Client shall reimburse Agency for any reasonable out-of-pocket
expenses incurred by the Agency in connection with the completion of this
agreement. Agency shall estimate costs for all advertising and direct marketing
projects in advance for Client review and approval.
3. ITEMS OF EXPENSE TO BE PAID BY CLIENT. In addition to Agency's fees as set
forth above, Client shall be responsible for the cost of list selection and
rental, data processing and tape manipulation, graphics and copywriting,
printing, mailing services, media purchases and travel and entertainment fees
associated with the preparation and/or mailing of direct mail pieces,
advertising and collateral prepared on behalf of Client. All such expenses shall
be submitted to Client in the form of a written estimate and approved by Client
prior to incurring any such expenses. In certain instances, upon agreement
between Client and Agency, specific production costs may be billed directly to
Client.
4. OUTSTANDING BALANCES. Client and Agency hereby acknowledge that there is an
outstanding balance of $432,833 owing to Agency from Client for prior services
rendered by Agency to Client and Client hereby guarantees to Agency that said
amounts shall be paid by Client to Agency. Should any portion of said amounts
remain outstanding beyond June of 2004, Agency shall have the right to convert
all, or a portion of the amount owing, at its discretion, to Preferred B Stock
of Client Corporation at the rate of $1.00 per share for each $1.00 of unpaid
debt.
5. INDEMNIFICATION. Client agrees to indemnify and hold harmless, Agency, its
employees, representative, officers, directors and agents and each person, if
any, who control Agency, from and against any and all losses, claims, damages or
liabilities, joint or several, including all reasonable out-of-pocket expense,
fee and disbursement to counsel incurred by Agency, its employees,
representatives, officers, directors, agents and such controlling person or
persons, in defending any claim, action or proceeding, whether or not resulting
in liability to Agency's employees, representatives, officers, directors, agents
and such controlling person or persons, to which they may become subject, caused
by, arising out of, or in connection with Agency's engagement by Client,
including but not limited to losses, claims, damages or liabilities caused by,
or arising out of, any untrue statement of material fact contained in
information furnished to Agency by Client or its officers, directors, employees,
representatives or advisors in connection with this Agreement, or by omission to
state therein, any material fact required or necessary to make the information
not misleading in light of circumstances under which given, including any claims
or representations about Client's products, or any other violation of the
federal laws or the laws of any state, or otherwise arising out of Agency's
engagement hereunder, except in respect of any matter as to which Agency shall
have been adjudicated to have acted with gross negligence or willful
malfeasance. Client also agrees to indemnify and hold harmless Agency with
regard to the payment of any invoices due to vendors with whom Agency contracts
to perform services necessary to fulfill the terms of this Agreement including
attorney's fees if any legal action arises out of non payment of any invoices
for trade purchases.
Direct Response Specialists, Inc.
00 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000
650.917.3737
6. CONFIDENTIALITY. Agency recognizes and confirms that certain of the
information provided and to be provided, may be either non-public, Client
confidential or proprietary in nature. Agency agrees to keep such information
confidential and will not allow, without prior consent of Client, the disclosure
of such information by its officers, directors, employees, representatives,
agent, or controlling person or persons, other than in connection with services
to be provided for Client, as described above, or as otherwise required by law.
7. TERMINATION CLAUSE. Client hereby agrees not to terminate this agreement as
long as there are any outstanding payables to Agency more than 30 days past due.
If this agreement is terminated, with 30 days written notice as indicated above
and any outstanding invoices remain open, Client hereby agrees to continue to
pay to Agency the monthly Agency fee for a period of one (1) year from the date
of termination.
8. COVENANTS. By execution of this Agreement, Client represents and warrants to
Agency that (i) Client recognizes fee payments are non-refundable; (ii) all
information Client has or will provide to Agency is true, correct, complete and
does not contain material misstatements or omissions to state facts necessary to
make provided information correct, complete or not misleading; (iii) execution
and performance of this Fee Agreement by Client does not, and will not,
constitute a breach of, or result in a default under, any contract, lease,
mortgage, indenture or other agreement of understanding to which Client is a
party or bound to by, or under which, any of the Client's assets are affected or
does not, and will not, result in the violation of any law, statute, rule,
regulation or decree of any governmental or administrative authority to which
Client is subject.
Client covenants and agrees that; all information provided to Agency in the
future will be complete, correct, and shall not contain any material
misstatement or omission to state facts necessary to make the information
presented completed, correct or true.
9. ARBITRATION. Any controversy between the Client and the Agency in connection
with this Agreement, including, without limitation, any dispute or claim arising
from the voluntary or involuntary termination hereof, shall be settled solely be
final and binding arbitration in Santa Xxxxx County in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. Judgment
on such award may be entered in a court having jurisdiction thereof.
10. WAIVER. No waiver of any breach of any paragraph, term or provision of this
Agreement shall be deemed to be a waiver of any preceding or succeeding breach
of the same or any other paragraph, term, or provision of this Agreement.
11. ATTORNEY'S FEES. If any legal action, including arbitration, and/or
mediation, is brought to enforce or interpret the provisions of this Agreement,
the prevailing party will be entitled to reasonable attorney's fees, which may
be set by the court, arbitrator, or mediator, in the same action or in a
separate action brought for that purpose, in addition to any other relief to
which that party may be entitled.
12. SOLE AND ENTIRE AGREEMENT. This Agreement constitutes the sole, complete and
entire agreement between the Client and the Agency concerning the matters
discussed herein and supersedes all prior negotiations and/or agreements between
Direct Response Specialists, Inc.
00 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000
650.917.3737
the parties, whether oral or written, concerning the matters discussed herein.
This Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
13. AMENDMENTS. No amendment or other modification of this Agreement will be
effective unless and until it is embodied in a written document signed by both
the Client and the Agency.
14. GOVERNING LAW. This Fee Agreement shall be governed by the laws of the state
of Nevada.
Dated: December 31, 2003 FreeHand Systems, Inc.
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Xxxx Xxxxxxxx, Senior Vice President
Operations/Business Development
Dated: December 31, 2003 Direct Response Specialists, Inc.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx, Vice President/
Creative Director
Direct Response Specialists, Inc.
00 Xxxxx Xxxxxx, Xxx Xxxxx, XX 00000
650.917.3737
