Exhibit 10.26
BUSINESS SERVICES AGREEMENT
THIS AGREEMENT ("AGREEMENT") DATED MARCH 1, 2005 IS BY AND BETWEEN XTREME
COMPANIES, INC., A NEVADA CORPORATION (THE "COMPANY" ) AND DUTCHESS ADVISORS,
LLC A CONNECTICUT LLC LOCATED AT ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ (THE
"CONSULTANT").
WHEREAS, the Company is engaged in manufacturing and selling boats through
Xtreme Companies and Challenger Offshore.
WHEREAS, Consultant is engaged in providing 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
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Consultant shall (i) advise the Company with respect to operations, business
strategy, capital structure and other matters pertaining to the Business as
shall be specified from time to time by the Company's President and/or such
other officer(s) as the Company's Board of Directors shall designate to have
principal responsibility for the operation of the Business and (ii) assist in
reviewing material transactions.
SECTION 2. COMPENSATION
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For services rendered under Section 1, Consultant shall be paid the following,
by the Company:
(a) CONSULTING FEES. 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 will issue to Consultant
as payment 2,229,101 fully paid and non-assessable shares of Common Stock of the
Company (the "Shares").
(b) 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 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. 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 twenty-four (24) months commencing on
the date and year first above written.
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, brokers, bankers, consultants, advisors,
finders or 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
or laws governing the sovereignty of Israel.
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 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
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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
Suffolk, Commonwealth of Massachusetts, USA 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 XTREME COMPANIES
/s/ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
President
BY DUTCHESS ADVISORS, LLC
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Managing Partner
