SERVICES AGREEMENT BETWEEN V2K INTERNATIONAL, INC. AND AMERIVON HOLDINGS LLC DATED JUNE 6, 2008
EXHIBIT 10.2
SERVICES AGREEMENT BETWEEN
V2K INTERNATIONAL, INC. AND AMERIVON HOLDINGS
LLC
DATED JUNE 6, 2008
This Services Agreement (this
“Agreement”) is made and entered into as of the day first written on the
signature page hereof by and between V2K International, Inc., a Colorado
corporation (the “Company”) and Amerivon Holdings LLC, a Nevada limited
liability company (“Amerivon”).
RECITALS
A. The
Company is engaged in the sale and distribution of window fashion treatments
through independent franchisees and also to mass market, wholesale clubs and
other retailers (the “Products”). The Company markets the Products
under its own brands or co-branded with the manufacturer. The Company
is also in the process of raising capital to fund its growth through the
placement of its equity and debt securities.
B. Amerivon
will refer to the Company the distribution entities set forth on Exhibit A
attached hereto (the “Distribution Prospects”) as amended from time
to time for consideration as customers subject to the terms and conditions of
this Agreement.
C. The
Company and Amerivon each desire to enter into this relationship for referrals
to the Prospects subject to the terms and conditions as set forth
herein.
NOW,
THEREFORE, in consideration of the foregoing, the mutual promises and covenants
contained herein, and for other good and valuable consideration, their receipt
and adequacy of which are hereby acknowledged, the parties hereby agree as
follows.
AGREEMENT
1. DEFINITIONS. Unless
the context requires otherwise, the following underlined terms shall have the
following respective meanings:
1.1 Agreement. This
Services Agreement.
1.2 Asserted
Liability. Any claim, demand, or circumstance that may result
in an indemnified Loss, or the commencement or threatened commencement of any
action, proceeding, or investigation that may result in an indemnified
Loss.
1.3 Audit. The
audit of the Distributor Reports (as defined in Section 4.2 hereof) for purposes
of determining the amount of fees to be paid to Amerivon pursuant to Section 4
hereof, as conducted by the Auditors in accordance with Generally Accepted
Auditing Standards and special procedures to be mutually agreed upon by the
parties.
1.4 Audit
Report. The written report of the Audit delivered by the
Auditors.
1.5 Auditors. A
nationally- or regionally-based firm of independent certified public accountants
reasonably acceptable to Amerivon (for this purpose, the Company’s current
auditors, Xxxxxxxx and Xxxxxxxxxxxx, shall be acceptable to Amerivon) that shall
conduct the Audit.
1.6 Commencement
Date. The date first written on the signature page
hereof.
1.7 Distributors. A
Distribution Prospect through which Company sells the Products.
1.8 Amerivon. Amerivon
Holdings LLC, a Nevada limited liability company.
1.9 Distribution
Prospects. Those entities set forth on Exhibit A attached
hereto, as amended or appended by the mutual written consent of the parties from
time to time.
1.10 Indemnified
Party. Amerivon with respect to the indemnification provided
by Section 7.1 hereof, and the Company with respect to the indemnification
provided by Section 7.2 hereof.
1.11 Indemnifying Party. The
Company with respect to the indemnification provided by Section 7.1 hereof, and
the Amerivon with respect to the indemnification provided by Section 7.2
hereof.
1.12 Company. V2K
International, Inc., a Colorado corporation.
1.13 Losses. Any
and all losses, liabilities, damages, deficiencies, demands, claims, actions,
judgments, causes of action, assessments, costs, and expenses, including but not
limited to interest, penalties, court costs, and reasonable attorneys'
fees.
1.14 Net
Sales. Gross Sales for which payment has actually been
received by the Company, less returns, chargebacks, and
allowances. Gross Sales shall mean the retail sales amount charged by
the Distributor or the Company’s independent dealers, agents or
franchisees.
1.15 New Distribution
Prospect. A Distribution Prospect not listed on Exhibit A as
of the Commencement Date.
1.16 Products. A
diversified portfolio of window fashion treatments including both “hard goods”
such as shutters and blinds and “soft goods” such as window fabrics, draperies,
window coverings.
2. SOLICITING
PROSPECTS. During the term of this Agreement, Amerivon shall
solicit the Distribution Prospects to sell the Products.
3. AMERIVON'S
RESPONSIBILITIES. During the term of this Agreement, Amerivon
shall:
3.1 Ethical
Responsibilities. Adhere, and use commercially reasonable
efforts to promote the highest standards of honesty, integrity, fair dealing,
and ethical conduct in all dealings with the Distribution Prospects;
and
3.2 Marketing
Methods. Use only those materials that have received the
Company’s prior written approval. Amerivon has no authority to make
any promise or representation on behalf of the Company and Amerivon shall be
responsible to the Company for any promise, representation, or warranty given to
a Distribution Prospect by Amerivon that is not contained in either advertising
or marketing materials approved in writing by the Company.
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4. FEES.
4.1 Conditions for Receiving
Fees. The Company will pay fees to Amerivon, pursuant to
Section 4.2 hereof, for each Distribution Prospect that becomes a Distributor
and for which the following conditions are met: (i) Amerivon notifies the
Company in writing prior to introducing a new Distribution Prospect (the “New
Prospect”) to the Company; (ii) the Company does not notify Amerivon within
three business days following Amerivon’s notice that either the Company has a
pre-existing relationship with the New Prospect or the Company desires for
Amerivon to defer the introduction to the New Prospect, and (iii) the Company
enters into a definitive agreement to sell Products to the Distribution
Prospect, which may be the acceptance by Company of a purchase order for
Products.
4.2 Fees for
Distributors. Subject to the conditions set forth in Section
4.1 hereof, for the referral of Distribution Prospects pursuant to this
Agreement resulting in a Distributor, the Company will pay to Amerivon a fee
equal to five percent (5%) of the Net Sales directly attributable to the sale of
the Products through the Distributor. The Company shall pay fees
subject to this Section 4.2 monthly pursuant to a “Distributor Report” which
shall be delivered by the 20th day
following the end of the calendar month in which the Net Sales are achieved by
the Company.
4.3 Expense
Reimbursement. Amerivon shall be reimbursed for all reasonable
out-of-pocket expenses incurred in the fulfillment of its obligations herein.
Said expenses shall be presented to the Company on a monthly basis and paid
within 30 days. All expenses in excess of $1,000 must be approved by
the Company in advance.
4.4 Option
Grant. Amerivon shall also receive a five year option to
purchase 3,256,810 shares of common stock of the Company, equal to five percent
(5%) of the number of shares of the Company’s common stock outstanding, on a
fully diluted basis (assuming the exercise of all options and warrants
outstanding as of June 6, 2008) with an exercise price equal to $.30 per share
(the “Option”). The option shall vest and become exercisable in
accordance with the vesting schedule and benchmarks set forth in the Stock
Option Agreement attached hereto as Exhibit B. The parties will
execute and deliver the Option concurrently with the execution and delivery of
this Agreement.
4.5 Audit
Rights. Amerivon shall have the right to Audit a Distributor
Report for one (1) year after its delivery. Prior to its engagement,
(i) the Auditors shall execute and deliver a confidentiality and non-disclosure
agreement containing usual and customary provisions protecting the Company and
(ii) the Auditors and each of the parties shall consent in writing to the agreed
upon procedures which shall govern the Audit. The Auditors shall
commence the Audit as soon as practicable and shall complete the Audit and
deliver a preliminary Audit Report to the parties as soon as
practicable. The parties shall use their best efforts to fully
cooperate with the Auditors in its conduct of the Audit. The parties
shall have fifteen (15) days from delivery thereof to review the preliminary
Audit Report and provide comments to the Auditors and each
other. Upon receipt of the parties’ comments, the Auditors shall
issue a final Audit Report. The Audit Report shall be conclusive and
binding upon the parties. Amerivon shall pay the Auditors’ fees and
expenses of the Audit unless there is a discrepancy in favor of Amerivon greater
than five percent (5%) of amounts payable pursuant to the Distributor Report(s)
subject to the Audit, in which case the Company shall pay for the Auditors’
reasonable fees and expenses.
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5. TERM AND
TERMINATION.
5.1 Term. The
term of this Agreement shall commence on the Commencement Date and, unless
sooner terminated as hereinafter provided, shall continue for a period of one
year, with automatic one-year renewals every year unless terminated by one of
the parties as herein provided. In the event that Amerivon
makes an investment in the Company or introduces someone who makes an investment
in the Company, then the term of this Agreement shall commence on the
Commencement Date and, unless sooner terminated as hereinafter provided, shall
continue for a period of three years, with automatic one-year renewals every
year unless terminated by one of the parties as herein provided.
5.2 Termination Without
Cause. Either party may terminate this Agreement after one
year without cause upon giving thirty (30) days prior written notice to the
other party. In the event that Amerivon makes an investment in the
Company or introduces someone who makes an investment in the Company, then
either party may terminate this Agreement after three years without cause
upon giving thirty (30) days prior written notice to the other
party.
5.3 Termination For
Cause. Either party may terminate this Agreement upon thirty
(30) days prior written notice to the other party in the following
events:
(a) Breach. A
party breaches any material provision of this Agreement and such breach remains
uncured for thirty (30) days after written notice thereof from the nonbreaching
party to the breaching party, unless such breach is of such a nature that it
cannot be cured within thirty (30) days and the breaching party commences a cure
within thirty (30) days after receipt of written notice of the breach and
diligently proceeds to complete the cure as soon as possible but in no event
greater than one hundred twenty (120) days after receipt of such
notice;
(b) Voluntary
Bankruptcy. A party files or consents to any voluntary or
involuntary petition for bankruptcy, insolvency, reorganization, liquidation, or
other similar form of debtor relief, or petitions for or consents to the
appointment of a receiver, trustee, or liquidator on its behalf for all or a
substantial portion of its assets, or makes a general assignment for the benefit
of creditors; or
(c) Involuntary
Bankruptcy. A party is the subject of any involuntary petition
for bankruptcy, insolvency, reorganization, liquidation, or other similar form
of debtor relief, or has a receiver, trustee, or liquidator appointed on its
behalf for all or a substantial portion of its assets, unless such petition or
appointment is set aside, withdrawn, or ceases to be in effect within ninety
(90) days from the date of any such petition or appointment.
5.4 Effect of
Termination. With respect to a termination of this Agreement
pursuant to Sections 5.1, 5.2, or 5.3 hereof, the Company shall have the
obligation to pay fees for only those Distribution Prospects or Distributors who
enter into a binding, written agreement with the Company within one year from
the termination date. In the event that Amerivon makes an investment in the
Company or introduces someone who makes an investment in the Company, the
Company will be obligated to pay fees for three years from the termination
date.
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6. RELATIONSHIP.
6.1 Relationship. The
parties hereby acknowledge and agree that the relationship arising from this
Agreement does not constitute or create a general agency, joint venture,
partnership, employment relationship, or franchise between them. The
parties agree and acknowledge that they are independent businesses and are
independent contractors and not employees of the other party for any
purpose. Each party has the right to operate such party’s business as
the party sees fit, and shall hire employees and have the right to engage other
personnel as such party may deem necessary or desirable, and such party shall
exercise the sole and exclusive control and supervision of such persons. In
addition, each party is free to engage in such other business activities as such
party may desire to pursue, so long as such other business activities do not
interfere with such party’s performance hereunder, violate the provisions
hereof, or breach any other contractual obligation of the party; provided,
however, that Amerivon shall not represent, directly or indirectly, any other
person or entity who sells a product which competes with any Product in any
geographic area in which the Company shall be selling or distributing its
Products and shall not, directly or indirectly represent any person or entity in
the sale or distribution of olives in the United States. Each party
will be responsible for the costs, deductions, withholdings, and contributions
with respect to such party on account of social security, insurance,
unemployment compensation, income tax, or otherwise, under any federal, state,
or local law applicable to the relationship of employer and
employee.
7. INDEMNIFICATION.
7.1 Indemnification by the
Company. The Company shall indemnify, save, defend, and hold
Amerivon harmless from and against any and all Losses based upon, arising out
of, or otherwise in respect of any negligent, grossly negligent, or
intentionally wrongful act or omission of the Company or its employees or agents
under this Agreement, any material breach by the Company of any warranty,
representation, covenant or agreement contained herein, any violation or
infringement of any copyright, trademark or any other intellectual property
right, or violation of any third party’s right of publicity; provided that any
claim for indemnification must exceed Five Thousand Dollars ($5,000) for
each single or related acts or omissions for which indemnification is
claimed.
7.2 Indemnification by
Amerivon. Amerivon shall indemnify, save, defend, and hold the
Company harmless from and against any and all Losses based upon, arising out of,
or otherwise in respect of any negligent, grossly negligent, or
intentionally wrongful act or omission of Amerivon or its employees, or agents
under this Agreement, any breach by Amerivon of any material warranty,
representation, covenant or agreement contained herein, any violation or
infringement of any copyright, trademark or any other intellectual property
right, or violation of any third party’s right of publicity; provided that any
claim for indemnification must exceed Five Thousand Dollars ($5,000) for each
single or related acts or omissions for which indemnification is
claimed.
7.3 Notice of Asserted
Liability. Promptly after receipt by an Indemnified Party of
notice of any Asserted Liability, the Indemnified Party shall give written
notice thereof to the Indemnifying Party. The notice shall describe
the Asserted Liability in reasonable detail, and shall indicate the amount
(estimated, if necessary and to the extent feasible) of the Losses that have
been or may be suffered by the Indemnified Party. The failure to give
such notice shall not affect the Indemnified Party’s right to seek
indemnification from the Indemnifying Party unless the Indemnified Party is
materially prejudiced by such lack of notice.
7.4 Asserted Liability Not
Involving a Third Party. Upon receipt of a notice of an
Asserted Liability not involving a third party, unless the Indemnifying Party
provides written
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objections
as set forth in Section 7.6 of this Agreement, the Indemnifying Party shall
promptly reimburse the Indemnified Party for the Losses suffered by the
Indemnified Party.
7.5 Asserted Liability Involving
a Third Party. Upon receipt of a notice of an Asserted Liability
involving a third party, unless the Indemnifying Party provides written
objections as set forth in Section 7.6 of this Agreement, the Indemnifying Party
shall provide a defense of the Asserted Liability for the Indemnified Party,
using qualified legal counsel, and shall pay all reasonable costs of defense and
the amount of any judgment, order, award, settlement, compromise, or
otherwise. The Indemnified Party shall cooperate with the
Indemnifying Party in any such defense, and the Indemnified Party may
participate in such defense using legal counsel of its own choice at its
own expense. The Indemnifying Party may not settle or compromise any
claim without the consent of the Indemnified Party, which consent may not be
unreasonably withheld or delayed; provided that the Indemnifying Party may
settle or compromise any claim without the consent of the Indemnified Party if
(i) the Indemnifying Party pays the full amount of such settlement or compromise
and all expenses, and (ii) the settlement or compromise does not require the
Indemnified Party to perform any act or to refrain from performing any
act. If the Indemnifying Party fails to give the Indemnified Party
written notice within thirty (30) days after receipt of the notice of the
Asserted Liability that the Indemnifying Party is assuming the defense of the
Asserted Liability, or if the Indemnifying Party fails to assume and continually
maintain the defense of the Asserted Liability within thirty (30) days after
receipt of the notice of the Asserted Liability, then the Indemnified Party may
assume control of the defense of the Asserted Liability using legal counsel of
its own choice at the expense of the Indemnifying Party, and the Indemnified
Party may settle or compromise any claim with the consent of the Indemnifying
Party, which consent may not be unreasonably withheld or delayed, at the expense
of the Indemnifying Party.
7.6 Objections. If
the Indemnifying Party disputes any notice of an Asserted Liability, then the
Indemnifying Party shall have thirty (30) days from receipt of such notice to
give written objections to the Indemnified Party or such objections shall be
deemed waived. On delivery of the written objections, the Indemnified
Party and the Indemnifying Party shall have until the earlier of thirty (30)
days from the date of receipt of the written objections or five (5) days before
the Indemnified Party must file a response with a court, arbitrator, or similar
entity with respect to the Asserted Liability to negotiate and attempt to
resolve their differences. If the parties are unable to resolve their
differences during such thirty (30)-day period, then the Indemnified Party may,
subject to the provisions of this Agreement, immediately thereafter pursue any
legal remedies available.
7.7. Jurisdiction. The
parties hereby consent to the exclusive jurisdiction of all courts of the State
of Nevada and the United States District Court for the State of Nevada as well
as to the jurisdiction of all courts from which an appeal may be taken from such
courts, for the purpose of any suit, action or other proceeding arising out of
or with respect to this Agreement. THE PARTIES HEREBY EXPRESSLY WAIVE
ANY AND ALL OBJECTIONS WHICH THEY MAY HAVE AS TO VENUE IN ANY SUCH COURTS AND
ALSO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. Each party may file a copy of this Agreement as evidence
of the foregoing waiver of right to jury trial.
8. LIMITATIONS OF WARRANTIES
AND LIABILITIES.
8.1 Warranty
Restrictions. The Company makes no warranty, express or
implied, regarding the Products, including any warranty of merchantability or
fitness for a particular purpose.
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8.2 No Liability for
Consequential Damages. Neither party shall be liable for special,
indirect, incidental, exemplary, punitive, or consequential damages, including
but not limited to loss of profits, related to or arising out of the performance
of this Agreement, even if advised of the possibility of such
damages.
8.3 The
Company’s
Representations and Warranties. The Company represents and warrants that:
(i) it is a corporation company duly organized, validly existing and in good
standing under the laws of the State of Colorado (ii) it has the lawful right,
power, authority and capacity to enter into this Agreement; (iii) the person
signing this Agreement is authorized to do so; (iv) neither the execution nor
the performance of this Agreement shall constitute a violation of or interfere
with the Company’s obligations to any third party; (v) to the Company’s actual
knowledge, the Products or their use do not infringe any patents, copyrights,
trademarks, trade secrets, or any other intellectual property rights relating to
their uses; and (vi) that there are no suits or proceedings pending or, to the
Company’s actual knowledge, threatened which allege any infringement of such
proprietary rights.
8.4 Amerivon’s Representations
and Warranties. Amerivon represents and warrants that: (i) if
it is not an individual, it is a entity validly existing and in good standing
under the laws of its jurisdiction; (ii) it has the lawful right, power,
authority and capacity to enter into this Agreement; (iii) the person signing
this Agreement is authorized to do so; and (iv) neither the execution nor the
performance of this Agreement shall constitute a violation of or interfere with
Amerivon’s obligations to any third party.
9. GENERAL
PROVISIONS.
9.1 Amendment. All
amendments or modifications of this Agreement shall be in writing and shall be
signed by each of the parties hereto.
9.2 Waiver. Any
waiver of any right, power, or privilege hereunder must be in writing and signed
by the party being charged with the waiver. No delay on the part of
any party hereto in exercising any right, power, or privilege hereunder shall
operate as a waiver of any other right, power, or privilege hereunder, nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege.
9.3 Notices. Except
for Distributor Reports, all notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be delivered personally or sent by overnight courier, by telecopy with
confirmation by first-class mail, or by certified mail, return receipt
requested, or by e-mail with receipt confirmation. Notices delivered
personally or sent by overnight courier or by telecopy with confirmation by
first-class mail shall be effective on the date first received, while notices
sent by certified mail, return receipt requested, shall be deemed to have been
received and to be effective four (4) business days after deposit into the
mails. Notices shall be given to the parties at the following
respective addresses, or to such other addresses as any party shall designate in
writing:
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If to the
Company: V2K
International, Inc.
00000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx,
Xxxxxxxx 00000
Attn: Xxx
Xxxxx
Chief Executive Officer
Telephone: (000)
000-0000
Telecopier: (000)
000-0000
E-mail: xxxxxx@x0x.xxx
with a
copy
to: Xxx
X. Xxxxxxxxx, Esq.
Xxxx Xxxx Xxxx Xxxxxxxxxx &
Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx
Xxxxx
000
Xxxxxx,
Xxxxxxxx 00000
Telephone: (000)
000-0000
Telecopier: (000)
000-0000
E-mail: xxx@xxxxxxxxxxx.xxx
If to
Amerivon: Xx.
Xxx X. Xxxxxx
Chief Executive Officer
Amerivon Holdings LLC
000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx
Xxxxxxx, Xxxxxx 00000-0000
Telephone/Telecopier:
(000) 000-0000
E-mail: xxxx@xxxxxxxx.xxx
with a
copy
to: Xxxxxxx
X. XxXxx, Esq.
Nevers, Palazzo, Xxxxxx & Packard,
plc
00000 Xxx Xxxxx Xxxxx.
Xxxxx 000
Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier:
E-mail: xxxxxxx@xxxx.xxx
9.4 Successors and
Assigns. This Agreement and each of its provisions shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, successors, and
assigns.
9.5 Law
Governing. This Agreement has been negotiated, executed, and
delivered and shall be performed in the State of Nevada and shall be governed by
and construed and enforced in accordance with the laws of the State of
Nevada without regard for its conflict of laws rules. The
parties hereby irrevocably submit to the exclusive jurisdiction of the courts of
the State of Nevada and any United States District Court situated in
the State of Nevada for the purposes of construing and enforcing this
Agreement.
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9.6 Attorneys’
Fees. Should a lawsuit be commenced to interpret or enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
costs and reasonable attorneys’ fees in addition to any other recovery to which
such party may be entitled.
9.7 Counterparts. This
Agreement may be executed in two or more counterparts, including by facsimile
transmission, all of which together shall constitute a single
instrument.
9.8 Severability of
Provisions. In the event any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
9.9 Construction. The
headings in the sections and paragraphs of this Agreement are for convenience
only and shall not constitute a part hereof. Whenever the context so
requires, the masculine shall include the feminine and the neuter, the singular
shall include the plural, and conversely. The terms and all parts of
this Agreement shall in all cases be interpreted simply and according to their
plain meaning and neither for nor against any party hereto.
IN
WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as
of June 6, 2008.
V2K
International, Inc.
By: /s/ Xxxxxx X.
Xxxxx
Title: Chief Executive
Officer
Amerivon
Holdings LLC
By: /s/ Xxx X.
Xxxxxx
Title: Chief Executive
Officer
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