CORPORATE CONSULTING AGREEMENT
Exhibit
10.5
Consulting Agreement
(Legacy
Media)
CORPORATE
CONSULTING AGREEMENT
This
Agreement (“Agreement”) dated
June 28, 2007 is between and Proton Laboratories, Inc. 0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xx a Washington Corporation (the “Company” ) and Legacy Media,
LLC., (“Consultant”).
WHEREAS,
the Company is engaged
in the marketing of functional water systems to the residential and commercial
markets. The company offers residential functional water systems that are
used
to produce alkaline-concentrated drinking water and commercial-grade functional
water systems that are used in applications ranging from food preparation
to
hospital disinfection. Its functional water systems have applications in
a range
of industries, such as corporate agriculture, organic agriculture, food
processing, medicine and dentistry, dermatology, heavy industry, mining,
environmental clean-up, product formulations, and beverages.
WHEREAS,
CONSULTANT is engaged in
providing investor relations and business services for publicly-traded
companies.
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
CONSULTANT;
1.
Shall answer and respond to telephone
inquiries from potential investors.
2.
Shall fulfill requests from potential
investors for Company information, via email or U.S.mail.
3.
Shall do design and layout work for a
corporate direct mailing campaign, oversee the printing and delivery to
potential investors, and respond and/or reply to all requests for additional
information. (The cost of printing and postage are an additional expense
to the
company).
Section
2. COMPENSATION
(a)
CASH.
The Company shall pay to the Consultant a non-refundable cash fee of one
hundred
twenty dollars ($120,000.00). Payable as follows: ten thousand dollars
($10,000.00) on or before the 21st
day of
each month after the initial six (6) months of the agreement, and sixty thousand
dollars ($60,000.00) as a signing bonus due within 120 days of the execution
of
the Agreement. Payments made after the 21st
of any
month shall constitute an increase in monthly payments for the remainder
of
agreement to twelve thousand five hundred ($12,500).
(b)
OTHER
COMPENSATION. The Company has already issued to the Consultant six hundred
thousand shares (600,000) of its restricted Common Stock, pursuant to a former
consulting agreement. Consultant shall keep such shares
notwithstanding the Parties’ settlement agreement, even though services were
never provided under the former consulting agreement or any other prior
agreement or termination of contract. Additionally, as a signing
bonus the Company shall issue to the Consultant an additional two million
six-hundred thousand (2,600,000) of its restricted Common Stock issued pursuant
to Rule 144. These 2,600,000 shares will be registered for resale by
Consultant on form SB2 with the Securities and Exchange Commission (“SEC”)
within 30 days of the execution of this Agreement, and Company will use its
best
efforts to have the registration declared effective by the SEC within 90
days.
(c)
REIMBURSEMENT OF EXPENSES. The Company shall reimburse Consultant for those
reasonable and necessary out-of-pocket expenses (including but not limited
to
travel, transportation, lodging, meals, postage, etc.) which have been incurred
by Consultant in connection with the rendering of services
hereunder. 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.
(d)
SHAREHOLDERS LIST. The Company shall provide to the Consultant a current
copy of
their Shareholders/NOBO list.
(d)
LEAK
OUT AGREEMENT. As a precondition to the effectiveness of this
Agreement, Company shall obtain a separate, valid and binding “Leak Out
Agreement” with Company shareholders Xxxxx Xxxxx and Xxxxx Xxxxxx, owners of 1.5
million shares and 2.0 million shares, respectively (the “Leak Out
Shareholders”). The Leak Out Agreement shall state that, for the next
24 months (the “Period”), the Leak Out Shareholders will not directly or
indirectly, offer for sale, sell, assign, pledge, issue, distribute, grant
any
option or enter into any contract for sale of or otherwise dispose of any
Company Common Stock, except (1) with prior written Company approval, or (2) pursuant
to
the terms of the Leak Out Agreement (“The Leak Out Terms”). The Leak
Out Terms shall state that (1) the Leak Out Shareholders may not sell more
than
5% of Leak Out Shareholders’ total respective shares, in any given week during
the Period, and (2) the Company shall be entitled to 25% of the proceeds
from
any sale made during the Period. Company shall immediately pay all
proceeds it receives under the Leak Out Agreement to
Consultant. Company agrees that it shall not give its approval for
any sale without the prior written approval of Consultant. Company shall
provide
Consultant with a monthly report of all sales of its shares. The
final Leak Out Agreement shall be subject to prior approval by
Consultant.
Section
3. RELATIONSHIP OF
PARTIES
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
The
term
of this Agreement shall be twelve (12) months commencing June 28,
2007.
Section
5. TERMINATION
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.
Termination
of the Agreement does not relieve the Company of its obligation to remunerate
CONSULTANT pursuant to the terms of this Agreement. Upon termination, any
outstanding remuneration due CONSULTANT for services rendered shall be paid
within 3 (three) business days following termination.
Section
6.
INDEMNIFICATION
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(a)
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In
consideration of CONSULTANT’s 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 CONSULTANT 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 CONSULTANT INDEMNITEES 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 CONSULTANT INDEMNITEES 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 by CONSULTANT to
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.
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(b)
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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 CONSULTANT
by The
Company. 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 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.
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(c)
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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.
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Section
7.
GOVERNING
LAW/ARBITRATION
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of California, without giving effect
to the
principles of conflict of laws. Further, any dispute, claim or
controversy arising out of or relating to this Agreement or the breach,
termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this agreement to arbitrate
shall
be determined by arbitration before one arbitrator. The arbitration
shall be administered by JAMS in Ventura, California. Judgment on the
arbitration Award shall be binding and may be entered in any court having
jurisdiction. The prevailing party in the arbitration shall be entitled,
as part
of the arbitration Award, to reimbursement of its reasonable attorneys’ fees and
expenses, including the fees of the arbitrator.
Section
8
ASSIGNABILITY.
This
Agreement and the rights and obligations of the parties hereto shall bind
and
inure to the benefit of the parties’ successor or successors by reorganization,
merger, or consolidation and any assignee of all or substantially all of
its
business and properties, but, except as to such successors or assignees,
neither
this Agreement nor any rights or benefits hereunder may be assigned by either
party. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any other person than the parties any right, benefit
or
remedy of any nature whatsoever under or by reason of this
Agreement.
Section
9.
ENTIRE
AGREEMENT
This
Agreement constitutes the entire agreement of the Company and the CONSULTANT
as
to the subject matter hereof and supersedes all prior or contemporaneous
oral
understanding or agreements regarding 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
Proton Laboratories, Inc.
/s/
Xx Xxxxxxxxx
Xx
Xxxxxxxxx
CEO
By
Legacy Media, LLC.
/s/
Xxxxx Xxxxxxx
Xxxxx
Xxxxxxx
President
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