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Exhibit 6.1
Editworks Ltd. Service Agreement
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Eidtworks, Ltd.
Services Agreement page 1
EDITWORKS, LTD.
SERVICES AGREEMENT
THIS SERVICES AGREEMENT is entered into as of October 1, 1999, between Reliant
Interactive Media Corp., a Nevada corporation ("RIMC") and EditWorks, Ltd., a
Nevada corporation, ("EditWorks"), and is made with reference to the following
facts. This Agreement shall commence on or about October 1, 1999.
WHEREAS, RIMC produces and exploits Short-Form Commercials and Infomercial
Productions (individually and collectively referred to as the "Infom- ercials").
WHEREAS, RIMC has requested EditWorks to perform certain services and to provide
certain equipment for the production and editing of Infomercials; and
WHEREAS, to that end, EditWorks has arranged for the delivery of certain editing
equipment owned by EditWorks for the benefit of RIMC; and
WHEREAS, RIMC desires to avail itself of the services offered by EditWorks on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Provision of Editing Equipment and Services.
a. Equipment. EditWorks shall deliver to the offices of RIMC an editing
system known as the AVID MC9000 Non-Linear editing system and
peripheral accessories and software all as more fully shown on the
attached EditWorks Inventory. The office facility for the EditWorks
Inventory shall have sufficient electrical and cooling capacity for
the optimum operation of the AVID editing system. The EditWorks
Inventory shall be delivered to this location for the benefit of RIMC
as described herein, and RIMC shall accrue an equity interest in same
as more fully described herein. The EditWorks Inventory will be
maintained and upgraded upon the mutual agreement and at the equal
expense of the parties. EditWorks will provide and maintain all
insurance coverage for loss or damage to those items shown on the
EditWorks Inventory and provide proof of insurance to RIMC upon
request.
Eidtworks, Ltd.
Services Agreement page 2
b. Editing Services. EditWorks shall as a primary responsibility provide
or supervise editing services for Infomercial productions subject to
the direction and specifications of RIMC.
2. Film and Directorial Services. EditWorks shall provide suitable personnel
to operate a camera and/or supervise the camera work in the filming of
Infomercials or to direct same. The parties shall mutually agree on a
schedule that permits these duties to be fulfilled. In connection with
these duties to RIMC, the EditWorks employees shall be provided the use of
office space at the offices of RIMC or such other accommodations as are
necessary to fulfill these duties.
3. Consideration and Fees.
a. Obligations of RIMC:
(i) Monthly Fee. A fee of $10,000 per month shall be paid by RIMC to
EditWorks beginning October 1, 1999 and monthly thereafter for
the term of this contract. The amount of $2,500 of this monthly
fee shall be in consideration of RIMC obtain- ing an equity
interest in the equipment described in the EditWorks inventory.
EditWorks shall be responsible for the payment of all of its
operating expenses, including the xxxx- xxxx of its employees.
However, RIMC may choose to hire additional editors at their sole
expense to operate the editing equipment under the direction of
EditWorks.
(ii) Royalty. RIMC shall pay to EditWorks a monthly royalty equal to
one quarter of one percent (.25%) on their gross sales (as
defined by GAAP accounting) less shipping, han- dling, returns
and taxes on all Infomercials for which EditW- orks provides
services pursuant to this Agreement. This royalty shall be due
and payable within one month of the end of each calendar month
for such gross sales received in that previous calendar month.
The royalties shall be payable for as long as there are revenues
realized on the particular infomerc- ial, however the royalties
shall only be paid on an aggregate of the first $50,000,000 in
sales as defined above. Royalties shall only be paid on new
productions and shall not be paid on re-edits of previously
produced Infomercials or on sales from any Infomercials for the
sales of computer equipment or software. Royalties shall not be
payable on any income received by RIMC from editing services
fees, whether this income is paid from EditWorks to RIMC or
directly to RIMC by third party clients.
Eidtworks, Ltd.
Services Agreement page 3
(iii) Moving Expenses. RIMC shall pay one-half of the moving expenses
(subject to a maximum payment of $4,000) for the EditWorks
Inventory.
b. Obligations of EditWorks.
(i) Fees for Third-Party Referrals. EditWorks shall pay to RIMC
one-half of all net profits (as defined by GAAP accounting)
realized from post-production contracts facilitated by RIMC with
outside parties. In the event that RIMC receives a pay- ment
directly from a third party for editing services, EditWo- rks
shall provide to RIMC an accounting of its expenses associated
with that particular contract and RIMC shall then remit to
EditWorks the amount of those expenses plus one- half of the net
profits thereon.
(ii) EditWorks Stock. As royalties are paid pursuant to section
4a.(ii) herein, one-half of these royalty payments shall be
credited to RIMC earning restricted stock of EditWorks on the
basis of one share per $5.00 of credited payments. This stock
will be issued within one month of the receipt of royal- ties
from RIMC, however certificates will not be issued until a
minimum of 100 shares have been earned in any particular period.
The price per share of stock shall be proportionately adjusted
for any increase or decrease in the number of issued shares of
EditWorks resulting from: (x) a subdivision or con- solidation of
shares; (y) the payment of a stock dividend; or (z) any other
increase or decrease in the number of such shares effected
without receipt of consideration by EditWorks. Any fraction of a
share resulting from an adjustment in the number of shares issued
shall be rounded up to the next whole share.
(iii) Monthly Rent. EditWorks shall pay to RIMC rent for use of the
office facility provided by RIMC for the EditWorks Inventory of
$200 per month.
4. Status of Parties: The parties hereto expressly agree, each for the other,
that the relationship between them hereunder is that of two principals
dealing with each other as independent contractors for the sole and
specific purpose that EditWorks shall provide and deliver services
described herein in connec- tion with the production of Infomercials,
subject to the terms and conditions of this Agreement. At no time, past,
present or future, shall the relationship of the parties herein be deemed
or intended to constitute a relationship with the characteristics of an
agency, partnership, joint venture, or of a collabora- tion for the
purposes of sharing any profits or ownership in common. Neither
Eidtworks, Ltd.
Services Agreement page 4
party shall have the right, power or authority at any time to act on behalf
of, or represent, the other party, but each party hereto shall be
separately and entirely liable for its own respective debts in all
respects. This Agreement is not for the benefit of any person who is not a
party signatory hereto or specifically named as a beneficiary herein. RIMC
may assign or license its rights hereunder in whole or in part to any
person, firm or corporation. Except for assignment to RIMC, EditWorks may
not assign or license any of its rights or obligations hereunder, or under
any agreement entered into by EditWorks with any third party. Subject to
the foregoing, the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, administrators, executors, successors and assigns, and any
past, present or future parent, subsidiary or affiliate company.
5. Notices: Any and all notices, communications and demands required or
desired to be given hereunder by either party hereto shall be in writing
and shall be validly given or made if served either personally or if
deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested. If such notice or demand be served
personally, service shall be conclusively deemed made at the time of such
personal service. If such notice or demand be served by registered or
certified mail in the manner herein provided, service shall be conclusively
deemed made two business days after the deposit thereof in the United
States mail addressed to the party to whom such notice or demand is to be
given as hereinafter set forth:
RIMC: Reliant Interactive Media Corp.
00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
EditWorks: EditWorks, Ltd.
00000 Xxxxxxx Xxxxx Xxx., Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Any party hereto may change its address for the purpose of receiving
notices or demands as herein provided by a written notice given in the
manner aforesaid to the other party hereto, which notice of change of
address shall not become effective, however, until the actual receipt
thereof by the other party.
4. Term and Purchase Rights at End of Term. This Agreement shall be for a
primary term of one year, and may be extended by RIMC for two additional
one-year terms. If this contract is terminated by RIMC at the end of one
year, EditWorks will repurchase the EditWorks Inventory for an amount equal
to one- half of the RIMC payments that were applied to its equity interest
in the equipment. In the alternative RIMC shall have the option to purchase
all right and title interest in and to the EditWorks Inventory for a lump
sum payment of
Eidtworks, Ltd.
Services Agreement page 5
$100,000 at the end of one year, $50,000 at the end of two years or $25,000
at the end of three years.
5. Miscellaneous:
(a) This Agreement shall be construed, interpreted and enforced in
accordance with and shall be governed by the laws of the State of
Nevada applicable to agreements entered into and wholly to be
performed therein. In the event of any conflict between any provisions
hereof and any applicable laws to the contrary, the latter shall
prevail, but this Agreement shall be deemed modified only to the
extent necessary to remove such conflicts.
(b) Each of the parties hereto shall execute and deliver any and all
additional documents, and shall do any and all acts and things
reasonably required in connection with the performance of the
obligations undertaken hereunder and to effectuate the extent of the
parties thereto.
(c) This Agreement constitutes the entire agreement of the parties hereto
and supersedes all oral and written agreements and understandings made
or entered into by the parties hereto prior to the date hereof. No
amendment, change or modification of this Agreement shall be valid
unless it is made in writing and signed by both parties hereto, and
any waiver of a failure to perform or breach shall not operate to
waive any subsequent failure to perform or breach
(d) The captions appearing at the commencement of the paragraphs hereof
are descriptive only and for convenience in reference to this
Agreement and should there be any conflict between any such heading
and the paragraph at the head of which it appears, the paragraph
thereof and not such heading shall control and govern in the
construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
(signatures for EditWorks, Ltd. Service Agreement)
Reliant Interactive Media Corp.
/s/
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By: Xxx Xxxxxxxxxx, President
EditWorks, Ltd.
/s/
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By: J. Xxx Xxxxxxx, President
