AGREEMENT
1. |
Parties
-
The parties to this Agreement are Xxxxxx Xxxx at 0000 Xxxxxxxxx Xxxxx,
Xxx
Xxxxxxx, XX 00000 (hereinafter referred to as "XXXX"), and
UKarma Corporation at 000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000
(hereinafter referred to as
"CLIENT").
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2. |
Services
-
At times and places agreed upon in advance and in writing by CLIENT
and
XXXX during the term of this Agreement, XXXX shall provide to CLIENT
consulting and advisory services relative to
business planning (hereinafter referred to as the "SUBJECT") now
under
development at CLIENT.
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3. |
Compensation
-
CLIENT agrees to pay and XXXX agrees to accept as consideration for
the
services to be provided under Section 2 (“Services”) a cash sum of $15,000
(subject to adjustment as described below) and issue a total of 33,333
shares of common stock of Client.
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The
pricing of the business plan (exclusive of the financial section) is based
on
estimated hours (including both primary and secondary research, interviews
and
writing) at a consulting rate of $150/hour. The financial section is based
on a
rate of $250/hour.
Payment
shall be 75% cash and 25% stock. Payment terms, including issuance of stock,
is
within 7 days of the actual date MILESTONE (see below). Payment terms are:
¼ of
the cash portion due upon signing of the contract, ½ of the cash portion due
upon delivery of the initial draft of the business plan, and ¼ of the cash
portion due upon delivery of the final plan (subject to adjustment as set forth
below in the event of a “Reduction” as defined below). The estimate includes up
to 2 revisions (maximum 15 hours) after the initial draft is delivered
(Additional revisions beyond the 15 hours as requested by the client will be
billed at a rate of $150 per hour). The stock price for the 25% stock portion
shall be calculated at a 25% discount to the share value offered during the
most
recent financing round and issued to XXXX in accordance with the PAYMENT
SCHEDULE below.
XXXX
shall update CLIENT periodically as to the actual number of hours required
to
finish a Section and make any requested revisions. In the event that the total
number of hours required to complete all of the Sections excluding the
“Financial Plan” (the “Actual Hours”) is less than 100 hours, then and in such
event the cash payment for business plan shall be reduced (a “Reduction”) by the
shortfall in Actual Hours as against the estimated hours below multiplied by
the
price for such hourly work, as follows:(a) 100 minus the Actual Hours, (b)
multiplied by $150 and (c) further multiplied by 75%. (For example: if the
Actual Hours are 90, then the reduction would be $1,125 derived by (a) 100-90
(i.e., 10), multiplied by (b) $150 (i.e., $1,500) and multiplied by (c) 75%
(i.e., the cash portion of the total consideration payable to XXXX)). Further,
in the event that the total number of hours required to complete the “Financial
Plan” section (the “Financial Actual Hours”) is less than 20 hours, then and in
such event the cash payment for business plan shall be reduced by a Reduction
based on the hourly rate of $250, as follows: (a) 20 minus the Financial Actual
Hours, (b) multiplied by $250 and (c) further multiplied by 75%. (For example:
if the Actual Hours are 16, then the reduction would be $750 derived by (a)
20-16 (i.e., 4), multiplied by (b) $250 (i.e., $1,000) and multiplied by (c)
75%. In the event of any Reductions pursuant to the foregoing, the final 25%
payment to XXXX upon delivery of the business plan shall be reduced by the
aggregate amount of all Reductions.
Page
1 of 6
Estimated
Hours by Section:
Section
|
Est.
Hours
|
%
Total
|
Rate
|
Cost
|
|||||||||
Introduction
|
1
|
1
|
%
|
150
|
150
|
||||||||
Executive
Summary
|
8
|
7
|
%
|
150
|
1,200
|
||||||||
UKarma
Corporate Summary
|
3
|
3
|
%
|
150
|
450
|
||||||||
Product
Descriptions
|
7
|
6
|
%
|
150
|
1,050
|
||||||||
Market
Analysis
|
30
|
25
|
%
|
150
|
4,500
|
||||||||
Strategy
|
20
|
17
|
%
|
150
|
3,000
|
||||||||
Management
Profiles
|
3
|
3
|
%
|
150
|
450
|
||||||||
Financial
Plan
|
20
|
17
|
%
|
250
|
5,000
|
||||||||
Xxxxxx
Xxxx
|
0
|
4
|
%
|
150
|
750
|
||||||||
Risk
Factors
|
5
|
4
|
%
|
150
|
750
|
||||||||
Moving
Forward
|
3
|
3
|
%
|
150
|
450
|
||||||||
Revisions
|
15
|
13
|
%
|
150
|
2,250
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Total
|
120
|
100
|
%
|
|
$
|
20,000
|
|||||||
25%
|
$
|
5,000
|
|||||||||||
Total
in Cash
|
$
|
15,000
|
|||||||||||
Share
price
|
$
|
0.20
|
|||||||||||
25%
discount to share price
|
$
|
0.15
|
|||||||||||
#Share
(repres. 25% pymt)
|
33,333
|
Estimated
dates for each MILESTONE are outlined below.
PAYMENT
SCHEDULE
MILESTONE
|
Estimated
Date
|
%Cash
|
Cash
|
Shares
|
|||||||||
Upon
Contract Signing
|
5-May
|
25
|
%
|
$
|
3,750
|
33,333*
|
|||||||
Upon
1st Draft Delivered
|
5-Jun
|
50
|
%
|
$
|
7,500
|
||||||||
Upon
Client Approval
|
10-Jun
|
25
|
%
|
$
|
3,750
|
||||||||
TOTAL:
|
100
|
%
|
$
|
15,000
|
33,333
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CLIENT
shall reimburse XXXX for all reasonable out-of-pocket expenses associated with
travel and lodging, when such travel is undertaken at the written request of
CLIENT, provided (1) receipts for such expenses are submitted to CLIENT within
thirty (30) days after such expenses are incurred and (2) CLIENT gives prior
written approval for any travel expense in excess of $250.
4. |
Deliverables
-
The final deliverable product to CLIENT will include 3 color bound
copies
and a CD which contains the business plan in both Microsoft®
Word and PDF formats. A PowerPoint Presentation of the plan (or part
thereof) is optional (and in addition to the services outlined in
Section
2) at the request of the Client at a rate of $175 per hour. Drafts
to
CLIENT will be delivered in PDF format unless otherwise
requested.
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Page
2 of 6
5. |
Confidentiality:
|
a.
|
Except
as set forth below, all information disclosed by CLIENT to XXXX shall
be
treated as confidential and proprietary information of CLIENT. XXXX
shall
only use such information for the benefit of CLIENT in the rendering
of
services for CLIENT and shall not otherwise use or disclose such
information to others without the express, written permission of
an
officer of CLIENT authorized to grant such permission. This
confidentiality obligation shall survive in
perpetuity.
|
Upon
termination of services, XXXX shall, if requested by CLIENT, within five
calendar days return to CLIENT all drawings, writings, recordings and records
of
every type (including all copies thereof) embodying in any form any confidential
information of CLIENT. The foregoing limitations of confidentiality shall not
apply to information which XXXX can establish by documentary evidence, (i)
was
at the time of disclosure to CLIENT, already in the public domain, or already
known to XXXX (except information previously acquired by XXXX directly or
indirectly from CLIENT or from a third party under a continuing obligation
of
confidence to CLIENT), or (ii) subsequent to its disclosure to XXXX, entered
the
public domain through no fault of XXXX or was received by XXXX from a third
party not owing a duty of confidence to CLIENT.
x.
|
XXXX
agrees that in rendering services to CLIENT, XXXX shall only disclose
to
CLIENT information which XXXX has the right to freely disclose without
incurring legal liability to or violating the rights of others.
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6. |
Relationship
of Parties
-
In performing services pursuant to this Agreement, XXXX shall act
as an
independent contractor having sole and exclusive control of his work
and
the manner in which it is performed. XXXX shall be free to enter
into
other consulting agreements as he deems appropriate. XXXX shall not
enter
into a consulting agreement with any other company which is in direct
competition with CLIENT’s business for a period of one year from the
termination of this agreement, as outlined in Section
9.
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7. |
Indemnity
-
CLIENT agrees to indemnify and hold XXXX (and anyone to which this
Agreement or any or all of the SERVICES have been assigned, an “Assignee”)
harmless from and against any liability, damages, cost or expense
(including without limitation reasonable attorneys fees), as incurred,
which arise as a result of any claims or actions against XXXX or
any
Assignee by any third party arising in connection with or related
to this
Agreement.
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8. |
Governing
Law
- Regardless
of the place of contracting, place of performance or otherwise, this
Agreement and the rights of the parties hereunder shall be governed
by and
construed and enforced in accordance with the laws of the State of
California, without regard to conflicts of laws principles. The provisions
of this Agreement shall be interpreted in a reasonable manner to
effect
the intentions of the parties and of this Agreement. In the event
of any
dispute arising under this Agreement, the dispute shall be resolved
exclusively pursuant to the Rules of the American Arbitration Association
(utilizing, if available, the rules applicable to commercial disputes),
by
a one-arbitrator arbitration proceeding held in Los Angeles, California.
The non-prevailing
party shall be responsible for the payment of all of the arbitration
costs
(including arbitrator’s compensation) and shall also pay to the prevailing
party all of the prevailing party’s costs and expenses incurred in
connection with such dispute (including, without limitation, reasonable
attorneys’ fees and expenses, expert witness fees and any previously
advanced arbitration fees and compensation of the arbitrator).
This Agreement has been negotiated at arms' length between persons
knowledgeable in the matters dealt with herein. In addition, each
party
has been represented by experienced and knowledgeable legal counsel.
Accordingly, any rule of law, including, but not limited to, Section
1654
of the California Civil Code, or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party
that
has drafted it, is of no application and is hereby expressly waived.
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Page
3 of 6
9.
|
Term
- This
Agreement shall be effective May 1, 2006 and shall extend to and
include
June 30, 2006.
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10. |
Miscellaneous
|
a.
|
This
Agreement contains the entire understanding of the parties with respect
to
the subject matter hereof and supersedes all prior agreements and
understandings, whether written or oral, between them with respect
to the
subject matter hereof. No modification of this Agreement shall be
effective unless contained in a writing executed by all parties
hereto.
|
x.
|
XXXX
may assign this agreement and all of its rights and obligations hereunder
to any corporation or LLC so long as XXXX controls such entity and
will
provide the services on behalf of any such
entity.
|
c.
|
The
Deliverables, as defined and described in Section 4, is intended
to be
used for internal use only and is not intended to be relied on by
any
individual or entity.
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d.
|
All
notices, requests, demands or other communications required or permitted
to be given or made hereunder shall be in writing and delivered personally
or sent by pre-paid, first class, certified or registered air mail
(or the
functional equivalent in any foreign country), return receipt requested,
or by facsimile addressed to the intended recipient thereof at the
address
and facsimile number set out below (or to such other address or facsimile
number as either party may from time to time duly notify the other).
Any
such notice, demand or communication shall be deemed to have been
given
immediately if given or made by confirmed facsimile, or three (3)
days
after mailing if given or made by letter. The addresses and facsimile
numbers, if available, for the parties for purposes of this Agreement
are:
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Page
4 of 6
XXXX:
|
Xxxxxx
Xxxx
0000
Xxxxxxxxx Xxxxx
Xxxxxx
Xxxx, XX 00000
Tel:
000-000-0000
|
CLIENT: |
Xxxx
Xxxxxx, CEO
uKarma
Corporation
000
Xxxxxxxx, 0xx Xxxxx,
Xxx
Xxxx, XX 00000
Tel:
000-000-0000
Fax:
000-000-0000
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e.
|
No
failure to exercise, and no delay in exercising any right, power
or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or
partial exercise of any right, power or remedy preclude any other
or
further exercise thereof or the exercise of any other right, power
or
remedy. No express waiver or assent of any breach of or default in
any
term or condition of this Agreement shall constitute a waiver of
or an
assent to any succeeding breach of or default in the same or any
other
term or condition hereof.
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f.
|
All
rights and restrictions contained herein may be exercised and shall
be
applicable and binding only to the extent that they do not violate
any
applicable laws and they are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid
or
unenforceable. If any term of this Agreement shall be held to be
illegal,
invalid or unenforceable by a court of competent jurisdiction, it
is the
intention of the parties that the remaining terms hereof shall constitute
their agreement with respect to the subject matter hereof and all
such
remaining terms shall remain in full force and effect (and shall
be interpreted as if the illegal, invalid or unenforceable provision
had
been omitted).
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g.
|
The
headings of sections and subsections have been included for convenience
only and shall not be considered in interpreting this
Agreement.
|
h.
|
This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed to be an original, and all of which together shall constitute
one and the same Agreement. This Agreement may be executed and delivered
by electronic facsimile transmission with the same force and effect
as if
it were executed and delivered by the parties simultaneously in the
presence of one another.
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i.
|
If
a party’s performance hereunder is reasonably delayed due to an act of
God, fire, personal illness, flood, riot, war or enacted legislation,
such
party shall not be in breach due to delayed performance and such
party
shall act reasonably and in good faith to immediately perform its
obligation(s) as soon as reasonably practicable following any such
event.
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Page
5 of 6
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
on
the date first written above.
DATE:
|
By:
|
|||
Xxxxxx Xxxx
0000
Xxxxxxxxx Xxxxx
Xxxxxx
Xxxx, XX 00000,
|
||||
UKarma
Corporation:
|
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DATE:
|
By:
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Page
6 of 6