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BUSINESS SERVICES AGREEMENT
THIS AGREEMENT ("AGREEMENT") DATED MARCH 2, 2004 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 LOCATED AT XX
XXX 0000, XXXXXX XXXXXXX, XX (THE "CONSULTANT").
WHEREAS, the Company through its wholly-owned subsidiary Xxxxxxxxxxxxxx.xxx
("Online") offers a comprehensive line of products and services at wholesale
prices through its online club membership. Additionally, the Company's
technology allows both large complex organizations and small stand-alone
businesses to create, manage, and maintain effective website solutions for
e-commerce.
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.
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. 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.
(b) INCENTIVE FEES. 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. Fifty-thousand (50,000) shares ("Initial Shares") of the
Incentive Stock shall carry piggy-back registration rights. The remaining
two-hundred thousand (200,000) shares ("Balance Shares") of the Incentive Stock
shall be eligible for resale only after the one year anniversary from issuance.
The Initial Shares and Balance Shares are subject to the following the resale
restrictions; During the two-year period starting with the commencement of this
Agreement ("Bleed-Out Period"), under no circumstance may the Consultant sell
more than one twelfth (1/12) of the total number of Initial Shares or Balance
Shares in any one month. 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.
(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 Xxxx
_____________________________________________
Xxxxxxx Xxxx
President
BY LUMINARY VENTURES, INC.
/s/ Xxxxx Xxxxxxxxx
________________________________________________
Xxxxx Xxxxxxxxx
CEO
