Exhibit 10.1
BUSINESS SERVICES AGREEMENT
This Agreement ("Agreement") dated March 3, 2005 is by and between NeWave, Inc.
a Utah corporation located at 000 Xxxx Xxxxx Xx., #0000, Xxxx Xxxxx, XX (the
"Company" ) and Luminary Ventures, Inc., a Florida corporation listed at XX Xxx
0000, Xxxxxx Xxxxxxx, XX (the "Consultant").
WHEREAS, the Company is engaged in direct marketing company that utilizes
the internet to maximize the income potential of its customers by offering a
fully integrated turnkey ecommerce solution
WHEREAS, the Consultant is engaged in providing celebrity endorsements and
other promotional services to businesses.
WHEREAS, the Company desires to obtain the benefits of Consultant's
experience and know-how, and accordingly, the Company has offered to engage
Consultant to render consulting and advisory services to the Company on the
terms and conditions hereinafter set forth.
WHEREAS, Consultant desires to accept such engagement upon such terms and
conditions hereinafter set forth.
NOWTHEREFORE in consideration of the foregoing, the parties agree as
follows:
Section 1. SERVICES RENDERED
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The Consultant affirms that it represents celebrity personality and game
show host Mr. Xxx Xxxxxxx ("Xxxxxxx") in his business affairs. To assist the
Company strengthen its brand, franchise and image, Consultant shall cause
Xxxxxxx to become the "public persona" of the Company by providing the following
services;
1. The likeness and image of Xxxxxxx shall be featured prominently on
Online's commercial website. Other internet promotions such as
"personal" emails, advertisements and other correspondence
("Correspondence") may emanate from Xxxxxxx on behalf of the Company
to its customers, vendors, employees and/or partners. The Company
shall be responsible for all technical aspects, fulfillment and costs
associated with the transmission of Correspondence. The content of
Correspondence shall be subject to approval by Consultant in writing
prior to release.
2. To promote awareness of the Company, Xxxxxxx shall make personal
promotional appearances ("Appearances") from time to time in his
capacity as an agent of the Company. The timing of such Appearances
are subject to the limitations of Xxxxxxx personal schedule, however
Xxxxxxx shall make no less than four personal Appearances on behalf of
the Company during the term of this Agreement. The timing of each
Appearance shall be mutually agreed upon prior to each appearance.
3. The Consultant shall assist the Company in all facets of advertising
including but not limited to the production and display of;
infomercials, print, television, radio, internet (including pop-ups),
email campaigns or other forms of advertisements ("Ads"). Consultant
is familiar in the areas of; budgeting, concept, arrangement and
airing of Ads. Xxxxxxx shall be featured prominently in any Ad as an
agent of the Company as long as Consultant approves of Ad.
4. The Consultant shall from time to time introduce the Company to
potential strategic partners and business relationships which could
assist the Company in the development of its business plan.
Section 2. COMPENSATION
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In consideration for the availability of Consultant during the term hereunder
and the services rendered pursuant to this Agreement, promptly upon execution of
this Agreement, the Company shall pay to Consultant the following:
(a) RETAINER. The sum of ten-thousand dollars ($10,000) per month for
non-accountable expenses ("Retainer"). Payment is due by the 5th business day of
each month during the term of this Agreement. Payment may be made either; (i) in
cash or (ii) shares of the Company's common stock ("Retainer Shares"). If
payment is made in Retainer Shares, the Company represents that the Retainer
Shares shall be free of any encumbrances or regulatory restrictions and will be
eligible for immediate resale. The Company shall issue Retainer Shares to
designee(s) performing services under Section 1, as named by Consultant. All
shares paid under this Agreement will be paid to a natural person only. The
Consultant shall also receive sufficient Retainer Shares each month for
Consultant to net $10,000, after commissions and other associated trading costs.
The Company shall retain the sole right to determine the method of payment
monthly. The first payment under the Agreement in the amount of $10,000, shall
be made at the time of execution of the within agreement.
Additionally, the Consultant is currently the beneficial owner of shares of the
Company's common stock ("Earned Shares") received pursuant to the Business
Services Agreement dated March 2, 2004. The Earned Shares are currently eligible
for resale either pursuant to an effective registration statement or an
exemption pursuant to Rule 144. The Consultant wishes to sell Earned Shares
pursuant to a Leak Out Agreement dated February 23, 2005 ("Leak Out Agreement").
The Consultant shall receive a minimum of an additional five-thousand dollars
($5,000) per month from sales of the Earned Shares. If the Consultant is unable
to sell Earned Shares yielding minimum gross proceeds of $5,000 per month, the
Company shall pay the Consultant the differential between $5,000 and the amount
realized from the sale of Earned Shares, each month during the term of this
Agreement.
(b) INCENTIVE FEES. (i) The sum of two-hundred and fifty-thousand (250,000)
shares of Stock ("Incentive Stock"). The Incentive Stock shall be restricted and
issued pursuant to Rule 144 and (ii) a 3 year "Warrant" to acquire two hundred
and fifty-thousand (250,000) shares of Stock, at a cashless exercise price of
two dollars and fifty cents ($2.50) and (iii) a 3 year "Warrant" to acquire
two-hundred and fifty-thousand (250,000) shares of Stock, at a cashless exercise
price of three dollars and fifty cents ($3.50). The Shares underlying the
Warrants shall carry piggy-back registration rights. The Company shall provide
all requisite legal opinions upon the Stock's eligibility for resale, at no cost
to the Consultant. Under no circumstance may the Consultant loan, hypothecate,
pledge, or transfer any Retainer Shares or Incentive Stock for a period of two
years commencing on the date of this Agreement. However, sales and/or transfer
of all shares of the Company's Stock by the Consultant shall be governed by the
terms and conditions of the Leak-Out Agreement.
(c) REIMBURSEMENT OF EXPENSES. The Company shall reimburse Consultant and/or
Xxxxxxx for those reasonable and necessary out-of-pocket expenses (including but
not limited to travel, transportation, lodging, meals etc.) which have been
approved by the President of the Company prior to their incurrence and which
have been incurred by Consultant in connection with the rendering of services
hereunder. Lodging shall mean four to five star hotel occupation by Xxxxxxx.
Transportation shall mean first-class travel for Xxxxxxx, whether by train,
airplane or automobile. "Xxxxx Xxxxxxxxx" shall be entitled to the same lodging
accommodations as Xxxxxxx, but not first class travel accommodations.
Any reimbursement to be made by the Company pursuant to this Section shall be
made following submission to the Company by Consultant of reasonable
documentation of the expenses incurred.
Section 3. RELATIONSHIP OF PARTIES
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This Agreement shall not constitute an employer-employee relationship. It
is the intention of each party that Consultant shall be an independent
contractor and not an employee of the Company. All compensation paid to
Consultant shall constitute earnings to Consultant and be classified as normal
income. The Company shall not withhold any amounts therefrom as U.S. federal or
state income tax withholding, or as employee contribution to Social Security or
any other employer withholding applicable under state or federal law.
Section 4. TERM
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The term of this Agreement shall be twelve (12) months commencing on the
date and year first above written. The Company may not further use/utilize
Xxxxxxx' name, likeness, identity, voice, pictures, photographs or images in the
event that the Agreement is terminated by either party.
Section 5. EXCLUSIVITY
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The Company shall deem Consultant to be its exclusive advisor for services
performed as outlined under Section 1. of this Agreement. The Company also
agrees it will not retain other agents other parties for the purpose of
performing any of those services as outlined under Section 1. of this Agreement,
unless waived in writing by Consultant.
Section 6. TERMINATION
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This Agreement may be terminated by either party with cause only, and only under
the following circumstances; when either party (i) knowing and willfully
breaches any term(s) of this Agreement, or (ii) knowing and willfully commits
any act(s) related to the normal conduct of business which are unlawful, or any
serious criminal action as promulgated pursuant to local, state, or federal law.
Section 7. INDEMNIFICATION
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(a) In consideration of Consultant' execution and delivery of the this
Agreement in addition to all of The Company's other obligations under this
Agreement, The Company shall defend, protect, indemnify and hold harmless
Consultant and all of its officers, directors, employees and direct or
indirect investors and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "CONSULTANT INDEMNITEES") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys'
fees and disbursements (the "CONSULTANT INDEMNIFIED LIABILITIES'), incurred
by any Indemnitee as a result of, or arising out of, or relating to (i) any
misrepresentation or breach of any representation or warranty made by The
Company in this Agreement or any other certificate, instrument or document
contemplated hereby or thereby (ii) any breach of any covenant, agreement
or obligation of The Company contained in this Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (iii)
any cause of action, suit or claim brought or made against such Indemnitee
by a third party and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other
certificate, instrument or document contemplated hereby or thereby, except
insofar as any such misrepresentation, breach or any untrue statement,
alleged untrue statement, omission or alleged omission is made in reliance
upon and in conformity with written information furnished to Consultant by
The Company. To the extent that the foregoing undertaking by The Company
may be unenforceable for any reason, The Company shall make the maximum
contribution to the payment and satisfaction of each of the Consultant
Indemnified Liabilities which is permissible under applicable law. The
indemnity provisions contained herein shall be in addition to any cause of
action or similar rights Consultant may have, and any liabilities
Consultant may be subject to.
(b) In consideration of The Company's execution and delivery of the this
Agreement and in addition to all of the Consultant' other obligations under
this Agreement, Consultant shall defend, protect, indemnify and hold
harmless The Company and all of its subsidiaries, shareholders, officers,
directors and employees and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "THE COMPANY INDEMNITEES") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective
of whether any such The Company Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "THE COMPANY INDEMNIFIED
LIABILITIES'), incurred by any The Company Indemnitee as a result of, or
arising out of, or relating to (i) any misrepresentation or breach of any
representation or warranty made by Consultant in the Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (ii)
any breach of any covenant, agreement or obligation of Consultant contained
in the Agreement or any other certificate, instrument or document
contemplated hereby or thereby, (iii) any cause of action, suit or claim
brought or made against such The Company Indemnitee by a third party and
arising out of or resulting from the execution, delivery, performance or
enforcement of the Agreement or any other certificate, instrument or
document contemplated hereby or thereby, and except insofar as any such
misrepresentation, breach or any untrue statement, alleged untrue
statement, omission or alleged omission is made in reliance upon and in
conformity with written information furnished to The Company by Consultant.
To the extent that the foregoing undertaking by Consultant may be
unenforceable for any reason, Consultant shall make the maximum
contribution to the payment and satisfaction of each of the The Company
Indemnified Liabilities which is permissible under applicable law. The
indemnity provisions contained herein shall be in addition to any cause of
action or similar rights The Company may have, and any liabilities The
Company may be subject to.
(c) Indemnification Procedure. Any party entitled to indemnification under
-------------------------- this Section (an "INDEMNIFIED PARTY") will
give written notice to the indemnifying party of any matters giving rise to
a claim for indemnification; provided, that the failure of any party
entitled to indemnification hereunder to give notice as provided herein
shall not relieve the indemnifying party of its obligations under this
Section except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any action, proceeding
or claim is brought against an indemnified party in respect of which
indemnification is sought hereunder, the indemnifying party shall be
entitled to participate in and, unless in the reasonable judgment of
counsel to the indemnified party a conflict of interest between it and the
indemnifying party may exist with respect to such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory
to the indemnified party. In the event that the indemnifying party advises
an indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any
indemnification notice to notify, in writing, such person of its election
to defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option,
defend, settle or otherwise compromise or pay such action or claim. In any
event, unless and until the indemnifying party elects in writing to assume
and does so assume the defense of any such claim, proceeding or action, the
indemnified party's costs and expenses arising out of the defense,
settlement or compromise of any such action, claim or proceeding shall be
losses subject to indemnification hereunder. The indemnified party shall
cooperate fully with the indemnifying party in connection with any
settlement negotiations or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to
such action or claim. The indemnifying party shall keep the indemnified
party fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. If the indemnifying party
elects to defend any such action or claim, then the indemnified party shall
be entitled to participate in such defense with counsel of its choice at
its sole cost and expense. The indemnifying party shall not be liable for
any settlement of any action, claim or proceeding effected without its
prior written consent. Notwithstanding anything in this Section to the
contrary, the indemnifying party shall not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry
of any judgment in respect thereof which imposes any future obligation on
the indemnified party or which does not include, as an unconditional term
thereof, the giving by the claimant or the plaintiff to the indemnified
party of a release from all liability in respect of such claim. The
indemnification required by this Section shall be made by periodic payments
of the amount thereof during the course of investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred,
within ten (10) Business Days of written notice thereof to the indemnifying
party so long as the indemnified party irrevocably agrees to refund such
moneys if it is ultimately determined by a court of competent jurisdiction
that such party was not entitled to indemnification. The indemnity
agreements contained herein shall be in addition to (a) any cause of action
or similar rights of the indemnified party against the indemnifying party
or others, and (b) any liabilities the indemnifying party may be subject
to.
Section 8. GOVERNING LAW
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Any controversy, claim or dispute arising from the interpretation of this
Agreement, or breach thereof, shall settled by arbitration in the County of Los
Angeles, State of California in accordance with the rules of the American
Arbitration Association there in effect, except that the parties thereto shall
have any right to discovery as would permitted by the Federal Rules of Civil
Procedure. The prevailing Party shall be entitled to reimbursement of actual
costs and attorney's fees from the arbitration and the decision of the
Arbitrator(s) shall be final.
Section 9. ASSIGNABILITY
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This Agreement and the rights and obligations of the parties hereto shall
bind and inure to the benefit of Consultant and its legal representatives and
heirs and the Company and any successor or successors of the Company by
reorganization, merger, or consolidation and any assignee of all or
substantially all of its business and properties, but, except as to any such
legal representatives or heirs of Consultant or successor or assignee of the
Company, neither this Agreement nor any rights or benefits hereunder may be
assigned by the Company or the Executive. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Section 10. ENTIRE AGREEMENT
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This Agreement constitutes the entire agreement of the Company and the
Consultant as to the subject matter hereof, superseding all prior written and
prior or contemporaneous oral understanding or agreements, including any
previous agreements, or understandings with respect to the subject matter
covered in this Agreement. This Agreement may not be modified or amended, nor
may any right be waived, except by a writing which expressly refers to this
Agreement, states that it is intended to be a modification, amendment, or waiver
and is signed by both parties in the case of a modification or amendment or by
the party granting the waiver. No course of conduct or dealing between the
parties and no custom or trade usage shall be relied upon to vary the terms of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
By NeWave Inc.
/s/ Xxxxxxx X Xxxxxxxx
Xxxxxxx X. Xxxxxxxx, Chairman of the Board
By Luminary Ventures, Inc.
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, CEO
