Memorandum of Understanding

 

Memorandum of Understanding

This Memorandum of Understanding (the “Memorandum”) outlines the salient terms of a proposed relationship between Bitzio, Inc. d/b/a Democratique (“Democratique”), ▇▇▇▇ vii (“▇▇▇▇”), and ▇▇▇▇▇ ▇▇▇▇ (“▇▇▇▇▇”). The above parties are desirous of working together to advance the ▇▇▇▇ brand under a newly formed company called ▇▇▇▇ Corporation (“CleoCorp”). Each party shall provide services in the formation and development of CleoCorp according the terms outlined in this Memorandum.

Premise

CleoCorp is a venture between Democratique and ▇▇▇▇▇ ▇▇▇▇ that is advancing the ▇▇▇▇ brand both in US and International markets. CleoCorp shall own 100% of ▇▇▇▇. CleoCorp will be jointly owned by Democratique and ▇▇▇▇▇ ▇▇▇▇. The parties expect to advance the business of ▇▇▇▇ through CleoCorp based on the roles and responsibilities set forth herein.

Roles

Democratique	Democratique shall provide the following:
	●	US based entity as holding company (CleoCorp)
	●	Develop and execute on a sales and marketing program to advance the business of ▇▇▇▇ both in US and international markets
	●	Develop product and marketing campaigns
	●	Develop collateral and sales materials including product brochures
	●	Develop and maintain website with ecommerce
	●	Develop sales distribution and broker networks to generate revenues
	●	Accounting and business infrastructure
	●	Inject Initial Capital of $12,000 into CleopCorp bank account to be used towards production.
	●	Provide Product financing jointly (50%) with ▇▇▇▇▇ ▇▇▇▇ for orders in excess of 2500 units per month
▇▇▇▇▇ ▇▇▇▇	▇▇▇▇▇ ▇▇▇▇ shall provide the following:
	●	Contribution of ▇▇▇▇ vii to CleoCorp
	●	Product financing to support orders as needed for up to 2500 units. Provide Product financing jointly (50%) with ▇▇▇▇▇ ▇▇▇▇ for orders in excess of 2500 units per month
	●	Warehousing and fulfillment in Miami, Florida
	●	Assistance with identification and execution of international distribution and retail outlets
	●	Brand Manager
▇▇▇▇ vii	▇▇▇▇ shall provide:
	●	Existing and new product designs

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Corporate and Economics

Domicile/Structure	CleoCorp shall be formed as a Delaware C-Corp
Subsidiaries	▇▇▇▇ vii as wholly owned subsidiaries
Shareholdings	Authorized 100, Issued 100 total
	51 shares – Democratique
	49 shares – ▇▇▇▇▇ ▇▇▇▇
Revenues	All revenues for ▇▇▇▇ products shall flow through CleoCorp.
Profit Sharing	Profit sharing shall be distributed based on ownership percentages after the following has been paid:
	●	Cost of goods sold under production financing
	●	Sales commissions and selling expenses
	●	Freight and transportation
	●	Agreed operating expenses
	●	Management fee to Democratique
Production Financing	Cleop Corp will use the $12,000 towards the first initial costs of production. After the $12,000 is consumed, production financing for ▇▇▇▇ products shall be provided by ▇▇▇▇▇ ▇▇▇▇ for the first 2500 units per month. Product will be financed jointly (50%) with ▇▇▇▇▇ ▇▇▇▇ for orders in excess of 2500 units per month. Reimbursement for production costs shall be paid by CleoCorp after collections are received.
Management Fee	Democratique shall be entitled to a management fee equal to $5,000 per month for non-allocable personnel and resources. Such amounts shall accrue until cash flow is available from CleoCorp to support.
Offices	CleoCorp shall locate with Democratique for corporate purposes, but shall maintain a warehouse office in Miami
Incentive Shares	Democratique shall provide incentive shares in its parent company to ▇▇▇▇▇ ▇▇▇▇ and/or his designees as follows:
	●	50,000,000 shares upon execution of the Memorandum at share price of $0.0015 per share with Democratique’s standard 2 year vesting period, where the shares shall vest on a quarterly basis with 6,250,000 shares vesting per period.
	●	$100,000 Democratique shares upon achievement of $1 million in annual gross revenues and the shares shall be valued at the then current trading price.
	●	An additional $100,000 shares upon achievement of $2 million in annual gross revenues the shares shall be valued at the then current trading price.

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ACKNOWLEDGED AND ACCEPTED BY:

	/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇			/s/ ▇▇▇▇▇ ▇▇▇▇
By:	▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇		By:	▇▇▇▇▇ ▇▇▇▇
For:	Bitzio, Inc. d/b/a Democratique		For:	▇▇▇▇ vii
Dated:			Dated:	2/11/14

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