EHXIBIT 10.30
CONSULTING AGREEMENT
This Consulting Agreement (Agreement) is entered and made effective as of the
11th day of October, 1999 by and between Genisys Reservation Systems, Inc. dba
xxxxxxxxx.xxx, inc. (Genisys) and Infomercial Management Inc.(IMI).
Recitals
A. Genisys is engaged in the development of an infomercial which is intended to
enhance the business activities of Genisys through the sale of the travel
business opportunity product (the Product) offered by the infomercial and the
establishment of a larger customer base for the travel activities of Genisys.
B. IMI is engaged in the development, production, testing, broadcast and
management of infomercial projects related to a variety of products, including
business opportunities.
Agreement
Now, Therefore, in consideration of the covenants exchanged hereunder, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Project Description and Projected Timetable Pursuant to the terms of this
Agreement and as further described herein, Genisys hereby engages IMI to provide
consulting services related to the coordination of the following matters within
the time periods specified;
(i) the review and analysis of the existing footage
shot for the Genisys infomercial (the
Infomercial) and delivery to Genisys of a written recommendation
and budget for modification of the infomercial and the Product,
offer and marketing plan related to the Infomercial (4 to 5
weeks);
(ii) implementation of a step-by-step action plan
jointly established by Genisys and IMI
for the modification of the Infomercial and the Product, offer
and marketing plan related to the Infomercial (6 to 10 weeks);
(iii) coordination of a media test (including media
test funding)for the revised Infomercial
(2 to 3 weeks);
4. coordination of a national roll-out (including
roll-out funding) of the revised
Infomercial if the revised Infomercial achieves greater than
"breakeven" media ratios in the media test (4 to 6 weeks). For
the purpose of this Agreement, a "breakeven" media ratio means
that total product sales from the media test are equal to or
greater than the cost of the media and the expenses associated
with the media test, which include product cost, telemarketing
charges, shipping and handling charges, royalties and product
returns and
5. such other action as may be mutually agreed by Genisys and IMI.
It is agreed by Genisys and IMI that the time periods specified above are
approximate and that each stage of the above-described work will be performed as
quickly as is reasonably possible.
2. Compensation For the services to be provided by IMI, it is agreed that
Genisys shall pay or otherwise deliver to IMI the following compensation:
1. upon execution of this Agreement, Genisys shall pay $10,000 to IMI;
2. upon IMI's delivery of a written recommendation containing analysis of the
existing infomercial footage, the current infomercial marketing plan, the
current Product and Product offer with a step-by-step plan of action, timetable
and budget for corrective action, Genisys shall pay $5,000 to IMI;
3. upon Genisys approval of the action plan, timetable and budget for revision
of the Infomercial and IMI's coordination of all work related to Product
modification, offer modification, production of new Infomercial footage, editing
of a revised Infomercial, legal review of Infomercial elements and FTC review of
the revised Infomercial, Genisys will promptly register and take all action
necessary for the delivery to IMI of 330,000 shares of Genisys stocks which may
be thereafter be freely traded;
(iv) upon completion of the revisions to the Product
and the Infomercial (to the
reasonable satisfaction of Genisys and IMI) and the completion
of a media test in the amount of $10,000 (to be funded by the
media company), Genisys will promptly register and take all
action necessary for the delivery to IMI of 170,000 shares of
Genisys stock which may thereafter be freely traded; and
(v) after completion of the media test for the
revised Infomercial, IMI shall be entitled
to the receipt of three percent (3%) of the Gross Revenues
received from the sale of the Infomercial Product and upsell
product through direct response sales. For the purposes of
this Agreement "Gross Revenues" shall mean the total revenues
received from all direct response sales less returns,
chargebacks and undeliverables. For the purposes of this
Agreement, "direct response sales" shall mean Product sales
and upsell products sold in conjunction with the Product
through the Infomercial, print, credit card inserts, direct
mail. home shopping, catalogs, radio commercials, retail
sales, outbound telemarketing and through the Internet to
customers responding to the Infomercial.
The right to payment, vesting of stock and the obligation of Genisys to fully
coordinate any of the other aspects of the compensation due IMI under this
Agreement shall automatically occur upon the completion or performance by IMI of
the duties related to such compensation. All payments or deliveries of stock to
IMI hereunder shall be earned when received and shall be non-fundable.
3. Duties of IMI It is agreed by the parties that upon execution of this
Agreement, IMI shall assume and shall have principal responsibility for
coordination and/or performance of the duties
listed on the attached Exhibit A, incorporated herein by reference, in
conjunction with the revision of the Genisys Infomercial.
4. Cooperation by Genisys It is acknowledged and agreed by Genisys that the full
performance by IMI of the duties specified in this Agreement requires the full
cooperation of Genisys. Such cooperation includes, but is not limited to, (i)
provision of all agreements related to the existing arrangements for the
production of the infomercial; (ii) communication and instruction to all
involved In the Genisys Infomercial project regarding the principal role of IMI
in the revision of the Infomercial and coordination of the Infomercial project;
(iii) timely interaction with IMI regarding review and approval of information
relating to the revision of the Infomercial and implementation of project action
items; (iv) complete and timely payment of all payments required under the
project budget approved by Genisys; (v) coordination of the creation of the
Product, Product packaging, marketing materials, support services for Product
purchasers and maintenance of the xxxxxxxxx.xxx website and (vi) all other
cooperation reasonably required by IMI for the timely and successful completion
of the duties specified in this Agreement.
5. Confidentiality It is acknowledged and agreed by both Genisys and IMI that
during the term of this agreement each party will be disclosing to the other
certain proprietary, confidential information related to the business
operations, systems, customers, vendors, products, marketing methods and other
aspects of the respective businesses of Genisys and IMI. Any documents or other
information which either Genisys or IMI consider to be proprietary and
confidential shall be so marked when delivered to the other party. Upon receipt
of confidential information, the receiving party shall take reasonable measures
to assure that such information remains confidential and shall not, directly or
indirectly, disclose or use such confidential information either during or after
the term of this Agreement without the prior written consent of the owner of
such information.
6. Ownership of Intellectual Property All intellectual property rights related
to the Infomercial, the raw footage related thereto, the Product, Product
packaging and all promotional materials created by Genisys in conjunction with
the production of the Infomercial, the Product and the direct response Marketing
campaign for the Product shall be the sole property of Genisys. When providing
any such intellectual property to IMI under this Agreement, Genisys represents
and warrants that Genisys has the right to approve the use by IMI of such
intellectual property as contemplated by this Agreement and that such use will
not violate any rights of third parties. All intellectual property rights
related to the information, memos, budgets and other information provided by IMI
to Genisys under this Agreement shall be the sole property of IMI.
7. Grant of Rights Genisys hereby grants to IMI the right to use, as IMI deems
reasonable and necessary, any and all rights related to Genisys tradamarks,
tradenames, music rights, copyrights, photos, personal appearances, existing
footage, testimonials, releases, appearance agreements, quotes, written
information and other intellectual property owned or licensed by Genisys for or
in conjunction with the infomercial. Genisys shall have the right of review and
prior approval over any off-line versions of the revised Infomercial and the
final on-line version of the Infomercial,
8, Exclusivity It is acknowledged and agreed by Genisys that an essential
condition for the effective performance by IMI of the duties specified in this
Agreement is the assurance by Genisys that during the term of this Agreement IMI
shall be the sole consultant authorized by Genisys to
coordinate the revision of the Infomercial and the other aspects of the
modification and implementation of the Genisys direct response marketing plan.
9. Nature of Relationship It is acknowledged and agreed by the parties that they
shall be independent contractors and that no relationship of partnership, joint
venture or other business agreement shall be created by this Agreement. Each
party shall be solely responsible for all licenses, permits, approvals, taxes,
reporting, employees, agents, insurance and all other aspects of the operation
of their respective business operations. Each party shall devote such time as
may be reasonably required to complete the responsibilities specified in this
Agreement. Neither party shall have the authority to obligate or bind the other
party in any agreement or to create any liability for the other party without
the express written consent of the party to be so obligated.
10. Indemnity
10.1 IMI's Indemnity of Genisys IMI shall
hold harmless, indemnify and defend
Genisys, at IMI's expense against any and all claims, demands,
liability or other harm incurred by Genisys, including
attorney's fees and costs, resulting from the breach of this
Agreement by IMI or the negligent acts or actions of IMI.
10.2 Genisys' Indemnity of IMI Genisys shall
hold harmless, indemnify and defend
IMI, at Genisys' expense, against any and all claims, demands,
liability or other harm incurred by IMI, including attorney's
fees and costs, resulting from the breach of this Agreement by
Genisys or the negligent acts or actions of Genisys.
11. Insurance During the term of this Agreement Genisys shall maintain modia
liability insurance of the type typically maintained by distributors of
infomercials and infomercial products and shall acquire products liability
insurance in the amounts specified in this Section. Each such policy of
insurance shall be in an amount of no less than $1 million per occurrence and $2
million in the aggregate and shall have the following conditions (i) a
deductible not exceeding $10,000; (ii) a rating of no less than "B+" in the Best
Guide; (iii) Genisys shall name IMI as an additional insured on each such
policy; (iv) no less than ten (10) days written notice to IMI shall be required
to decrease the policy benefits or cancel the policy and (v) Genisys shall
provide IMI with a copy of a certificate evidencing compliance with these
requirements within thirty (30) days of the date of Agreement.
12. Term of Agreement: Termination The term of this Agreement shall be for the
entire time that the Genisys Product or Sequel Product is sold through the
Infomercial or otherwise through direct response sales. For the purpose of this
Agreement, a "Sequel Product" shall mean a product which uses the same name or
marketing materials as the Product or is sold through the Infomercial or is the
same Product or a direct line extension of the Product. In the event IMI or
Genisys breach or otherwise fail to fully perform in accordance with the terms
of this Agreement, the non-breaching party shall provide the breaching party
with written notice specifying the elements of breach or non- performance. The
breaching party shall have thirty (30) days after receipt of a notice of breach
in which to correct the breach or non-performance or the non-breaching party
shall have the right to terminate this Agreement. Either party may terminate
this Agreement if the other party becomes engaged in bankruptcy proceedings,
makes an assignment for the benefit of creditors or is otherwise unable to fully
perform under this Agreement for a period exceed 30 days.
13. Accounting: Reports: Payments: Inspection. IMI and Genisys shall jointly be
responsible for coordinating the collection of all revenues from the sale of the
Product through the Infomercial and all other direct response sales. Genisys
shall keep complete and accurate books of account regarding the manufacture,
marketing and sale of The Product and the other sources of revenue which are the
subject of this Agreement. Genisys shall allow IMI the right of inspection of
such books during regular business hours and upon reasonable advance notice.
During the term of this Agreement for each month in which there are sales of the
Product or other revenue subject to this Agreement, within thirtv (30) days
after the end of the month Genisys shall provide IMI with a report containing
complete information regarding sales of the Product and as a required hereunder
the calculation of Gross Receipts, the royalties due thereon, and including
therewith a payment of any amounts due IDS for the prior month activities. Such
books of account and supporting data shall be available for inspection by IMI
during Genisys' regular business hours for a period of two (2) years following
the end of the fiscal year to which they pertain.
In the event the inspection of Genisys books and records reveals that any annual
payment to IMI was understated by five percent (5%) or more, Genisys shall be
responsible to pay for the reasonable costs of inspection, excluding travel
costs related to the inspection. Additionally, any amount due IMI which is
unpaid shall accrue interest at the rate of ten percent (10%) per annum until
the total amount due, including interest, is paid in full. Any determination of
underpayment shall not be a breach of this Agreement unless the full amount due
remains unpaid for a period exceeding ten (I0) days after receipt of written
payment demand,
14. Notices All notices under this Agreement shall be in writing and effective
when confirmed delivered by personal service, overnight delivery or other method
to the addresses indicated below or otherwise later designated in writing by the
parties:
To: IMI: To: Genisys:
Infomercial Management Inc. Genisys Reservation Systems, Inc.
0000 Xxxxx Xxx. Xxxxx 0000 Xxxxxx Xxxxxx
Xxxxx 000 Xxxxx, XX 00000
Xxx Xxxxx, XX 00000 Attn: Xxxxx Xxxx
Attn: Xxxxxxxxx X. Xxxx Fax (000) 000-0000
Fax (000) 000-0000
15. Force Xxxxxx In the event either party is prevented from performing under
this Agreement due to actions of others which are beyond such party's reasonable
control or otherwise due to weather, strikes, labor disputes, natural disasters
or acts of God, such party's performance shall be suspended for the time equal
to the delay caused by such events.
p. General Provisions
16.1 Complete Agreement This Agreement represents the complete understanding
between the parties and no modification, verbal or written, of the terms
contained herein shall be effective unless in writing and signed by the parties.
16.2 Dispute Resolution Any dispute relating to this Agreement or the
interpretation thereof shall be resolved by binding arbitration conducted under
the rules of the American Arbitration Association with the prevailing party
entitled to the recovery of attorney's fees and costs from the other party. Any
decision resulting from such arbitration may be entered in a court of competent
jurisdiction.
16.3 Counterparts This Agreement may be executed in counterparts which, when
taken together, shall represent the original of this Agreement. the @ of this
Agroment.
16.4 Assignability This Agreement may not be assigned by IMI except to
an entity which IMI owns at least a 50% interest. Genisys shall have
the rights to assign this Agreement to any entity which is capable of
fully performing the obligations of Genisys under this Agreement.
16.5 Authority to Execute Each of the undersigned warrants and
represents that they are authorized to execute and fully perform this
Agreement and that such actions will not breach or violate any
agreement to which the party for whom they are signing may be a party.
16.6 Representation Each party to this Agreement has been advised by
independent counsel regarding the terms of this Agreement and each
party has participated in the creation of this Agreement. It is agreed
that this Agreement shall not be construed against either party.
Agreed to and accepted as of the date first above written
Genisys Reservation Systems, Inc. Infomercial Management, Inc.
By:/s/___________________ By: /s/___________________
EXHIBIT A
FINANCIAL RESPONSIBILITY
DUTIES OF IMI AND GENISYS
Financial
Responsibility Duty or Action To Be Taken
IMI Review and analysis of the existing footage
shot for the Infomercial;
IMI Delivery to Genisys of a written
recommendation for the modification of the
Infomercial and the Product, offer and
marketing plan related to the Infomercial.
IMI Delivery of Genisys of budget for all
revisions and other actions recommended for
revision of the Infomercial or Product and for
the testing and roll-out of the revised
Infomercial.
Genisys Implementation of a step-by-step action plan
jointly established by Genisys and IMI for the
modification of the Infomercial and the
Product, offer and marketing plan related to
the Infomercial;
IMI Coordination of the production and editing of
new footage;
IMI Coordination of a media test (including media
test funding) for the revised Infomercial;
IMI Coordination of a national roll-out
(including roll-out
funding) of the revised Infomercial if the
revised Infomercial achieves sufficient media
ratios in the media test.
IMI Coordination of implementation of the marketing
and sale of the Product through all other
direct response media other than the
Infomercial;
IMI Consulting with Genisys regarding design and
implementation of a radio commercial campaign
for the Product;
Genisys Implementation of actions related to the
marketing and sale of the Product through all
other direct response media other than the
Infomercial; and
As Agreed Such other action as may be mutually agreed by Genisys and IMI.
