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EXHIBIT 10.2
SERVICES AGREEMENT BETWEEN
V2K INTERNATIONAL, INC. AND
AMERIVON HOLDINGS LLC
DATED JUNE 6, 2008
SERVICES AGREEMENT
This Services Agreement
(this “Agreement”) is made and entered into as of
the day first written on the signature page hereof by and
between V2K International, Inc., a Colorado corporation (the
“Company”) and Amerivon Holdings LLC, a Nevada
limited liability company
(“Amerivon”).
RECITALS
A.
The
Company is engaged in the sale and distribution of window fashion
treatments through independent franchisees and also to mass market,
wholesale clubs and other retailers (the
“Products”). The Company markets the
Products under its own brands or co-branded with the
manufacturer. The Company is also in the process of
raising capital to fund its growth through the placement of its
equity and debt securities.
B.
Amerivon
will refer to the Company the distribution entities set forth on
Exhibit A attached hereto (the “Distribution
Prospects”) as amended from time to time for consideration as
customers subject to the terms and conditions of this
Agreement.
C. The
Company and Amerivon each desire to enter into this
relationship for referrals to the Prospects subject to the
terms and conditions as set forth herein.
NOW,
THEREFORE, in consideration of the foregoing, the mutual
promises and covenants contained herein, and for other good
and valuable consideration, their receipt and adequacy of
which are hereby acknowledged, the parties hereby agree as
follows.
AGREEMENT
1.
DEFINITIONS
. Unless the context requires otherwise, the
following underlined terms shall have the following respective
meanings:
1.1
Agreement
. This Services Agreement.
1.2
Asserted
Liability . Any claim, demand, or
circumstance that may result in an indemnified Loss, or the
commencement or threatened commencement of any action,
proceeding, or investigation that may result in an indemnified
Loss.
1.3
Audit
. The audit of the Distributor Reports (as defined
in Section 4.2 hereof) for purposes of determining the amount
of fees to be paid to Amerivon pursuant to Section 4 hereof,
as conducted by the Auditors in accordance with Generally
Accepted Auditing Standards and special procedures to be
mutually agreed upon by the parties.
1.4
Audit
Report . The written report of the Audit
delivered by the Auditors.
1.5
Auditors
. A nationally- or regionally-based firm of
independent certified public accountants reasonably acceptable
to Amerivon (for this purpose, the Company’s current
auditors, Seligson and Giannattasio, shall be acceptable to
Amerivon) that shall conduct the Audit.
1.6
Commencement
Date . The date first written on the
signature page hereof.
1.7
Distributors
. A Distribution Prospect through which Company
sells the Products.
1.8
Amerivon
. Amerivon Holdings LLC, a Nevada limited liability
company.
1.9
Distribution
Prospects . Those entities set forth on
Exhibit A attached hereto, as amended or appended by the
mutual written consent of the parties from time to
time.
1.10
Indemnified
Party . Amerivon with respect to the
indemnification provided by Section 7.1 hereof, and the
Company with respect to the indemnification provided by
Section 7.2 hereof.
1.11
Indemnifying
Party
. The Company with respect to the indemnification
provided by Section 7.1 hereof, and the Amerivon with respect
to the indemnification provided by Section 7.2
hereof.
1.12
Company . V2K International, Inc., a Colorado
corporation.
1.13
Losses . Any and all losses, liabilities,
damages, deficiencies, demands, claims, actions, judgments, causes
of action, assessments, costs, and expenses, including but not
limited to interest, penalties, court costs, and reasonable
attorneys' fees.
1.14
Net Sales . Gross Sales for which payment has
actually been received by the Company, less returns, chargebacks,
and allowances. Gross Sales shall mean the retail sales
amount charged by the Distributor or the Company’s
independent dealers, agents or franchisees.
1.15
New Distribution Prospect . A Distribution
Prospect not listed on Exhibit A as of the Commencement
Date.
1.16
Products . A diversified portfolio of window
fashion treatments including both “hard goods” such as
shutters and blinds and “soft goods” such as window
fabrics, draperies, window coverings.
2.
SOLICITING
PROSPECTS . During the term of this
Agreement, Amerivon shall solicit the Distribution Prospects
to sell the Products.
3.
AMERIVON'S
RESPONSIBILITIES . During the term of this
Agreement, Amerivon shall:
3.1
Ethical
Responsibilities . Adhere, and use
commercially reasonable efforts to promote the highest
standards of honesty, integrity, fair dealing, and ethical
conduct in all dealings with the Distribution Prospects;
and
3.2
Marketing
Methods . Use only those materials that have
received the Company’s prior written
approval. Amerivon has no authority to make any
promise or representation on behalf of the Company and
Amerivon shall be responsible to the Company for any promise,
representation, or warranty given to a Distribution Prospect
by Amerivon that is not contained in either advertising or
marketing materials approved in writing by the
Company.
4.
FEES
.
4.1
Conditions for
Receiving Fees . The Company will pay fees
to Amerivon, pursuant to Section 4.2 hereof, for each
Distribution Prospect that becomes a Distributor and for which
the following conditions are met: (i) Amerivon notifies the
Company in writing prior to introducing a new Distribution
Prospect (the “New Prospect”) to the Company; (ii)
the Company does not notify Amerivon within three business
days following Amerivon’s notice that either the Company
has a pre-existing relationship with the New Prospect or the
Company desires for Amerivon to defer the introduction to the
New Prospect, and (iii) the Company enters into a definitive
agreement to sell Products to the Distribution Prospect, which
may be the acceptance by Company of a purchase order for
Products.
4.2
Fees
for Distributors . Subject to the conditions
set forth in Section 4.1 hereof, for the referral of
Distribution Prospects pursuant to this Agreement resulting in
a Distributor, the Company will pay to Amerivon a fee equal to
five percent (5%) of the Net Sales directly attributable to
the sale of the Products through the
Distributor. The Company shall pay fees subject to
this Section 4.2 monthly pursuant to a “Distributor
Report” which shall be delivered by the 20 th
day following the end of the calendar month in which the Net
Sales are achieved by the Company.
4.3
Expense
Reimbursement . Amerivon shall be reimbursed
for all reasonable out-of-pocket expenses incurred in the
fulfillment of its obligations herein. Said expenses shall be
presented to the Company on a monthly basis and paid within 30
days. All expenses in excess of $1,000 must be
approved by the Company in advance.
4.4
Option
Grant . Amerivon shall also receive a five
year option to purchase 3,256,810 shares of common stock of
the Company, equal to five percent (5%) of the number of
shares of the Company’s common stock outstanding, on a
fully diluted basis (assuming the exercise of all options and
warrants outstanding as of June 6, 2008) with an exercise
price equal to $.30 per share (the
“Option”). The option shall vest and
become exercisable in accordance with the vesting schedule and
benchmarks set forth in the Stock Option Agreement attached
hereto as Exhibit B. The parties will execute and
deliver the Option concurrently with the execution and
delivery of this Agreement.
4.5
Audit
Rights . Amerivon shall have the right to
Audit a Distributor Report for one (1) year after its
delivery. Prior to its engagement, (i) the Auditors
shall execute and deliver a confidentiality and non-disclosure
agreement containing usual and customary provisions protecting
the Company and (ii) the Auditors and each of the parties
shall consent in writing to the agreed upon procedures which
shall govern the Audit. The Auditors shall commence
the Audit as soon as practicable and shall complete the Audit
and deliver a preliminary Audit Report to the parties as soon
as practicable. The parties shall use their best
efforts to fully cooperate with the Auditors in its conduct of
the Audit. The parties shall have fifteen (15) days
from delivery thereof to review the preliminary Audit Report
and provide comments to the Auditors and each
other. Upon receipt of the parties’ comments,
the Auditors shall issue a final Audit Report. The
Audit Report shall be conclusive and binding upon the
parties. Amerivon shall pay the Auditors’
fees and expenses of the Audit unless there is a discrepancy
in favor of Amerivon greater than five percent (5%) of amounts
payable pursuant to the Distributor Report(s) subject to the
Audit, in which case the Company shall pay for the
Auditors’ reasonable fees and expenses.
5.
TERM
AND TERMINATION .
5.1
Term
. The term of this Agreement shall commence on the
Commencement Date and, unless sooner terminated as hereinafter
provided, shall continue for a period of one year, with
automatic one-year renewals every year unless terminated by
one of the parties as herein provided. In the
event that Amerivon makes an investment in the Company or
introduces someone who makes an investment in the Company,
then the term of this Agreement shall commence on the
Commencement Date and, unless sooner terminated as hereinafter
provided, shall continue for a period of three years, with
automatic one-year renewals every year unless terminated by
one of the parties as herein provided.
5.2
Termination
Without Cause . Either party may terminate
this Agreement after one year without cause upon giving
thirty (30) days prior written notice to the other
party. In the event that Amerivon makes an
investment in the Company or introduces someone who makes an
investment in the Company, then either party may terminate
this Agreement after three years without cause upon
giving thirty (30) days prior written notice to the other
party.
5.3
Termination For
Cause . Either party may terminate this
Agreement upon thirty (30) days prior written notice to the
other party in the following events:
(a)
Breach
. A party breaches any material provision of this
Agreement and such breach remains uncured for thirty (30) days
after written notice thereof from the nonbreaching party to
the breaching party, unless such breach is of such a nature
that it cannot be cured within thirty (30) days and the
breaching party commences a cure within thirty (30) days after
receipt of written notice of the breach and diligently
proceeds to complete the cure as soon as possible but in no
event greater than one hundred twenty (120) days after receipt
of such notice;
(b)
Voluntary
Bankruptcy . A party files or consents to
any voluntary or involuntary petition for bankruptcy,
insolvency, reorganization, liquidation, or other similar
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