Exhibit 10.18

 

SERVICES AGREEMENT

 

THIS SERVICES AGREEMENT (this “Agreement”), effective as of December 11, 2015,
is entered into by and between NUGENE INC. (“NuGene” or “NG”), a California
corporation that is a wholly owned subsidiary of NuGene International, Inc.
("NUGN"), licensee of Kathy Ireland Worldwide (“KIWW”); and KBHJJ, LLC
(“KBHJJ”), a Florida limited liability company. The foregoing parties are
referred to in this Agreement collectively as the “Parties.”

 

WHEREAS, KBHJJ is owned and operated by Kevin Harrington (“KH”), Brian
Harrington and Jimmy Jongebloed (the “Team”) wherein KH is President and CEO.

 

WHEREAS, the Team and KBJJJ are experts in the field of infomercials and TV
shopping sales worldwide;

 

WHEREAS, NuGene desires to expand its sales channels into TV shopping both
domestic and worldwide;

 

WHEREAS, NuGene desires to obtain services from KBHJJ and KBHJJ desires to
provide services to NuGene;

 

NOW, THEREFORE, for good and sufficient consideration and of the mutual promises
herein contained, the receipt of which is hereby acknowledged, the Parties
hereto agree as follows:

 

1. COMPENSATION. NuGene agrees to compensate KBHJJ for the Services described in
Section 2 as follows:

 

A. Warrants. Warrants to purchase 1,350,000 shares of common stock of NUGN
("NUGN Warrants"), of which KBHJJ shall receive:  

1.NUGN Warrants to purchase 450,000 shares upon execution of this agreement,

2.NUGN Warrants to purchase 450,000 shares vesting 6 months from the execution
date of this Agreement, and the remaining

3.NUGN Warrants to purchase 450,000 shares vesting 6 months thereafter following
the schedule in Exhibit A provided that NuGene successfully funds the
infomercial.

 

B. Additional Shares Based on Results. 500,000 additional shares that can be
earned within the first 18 months of this Agreement by hitting benchmarks
established by NuGene as follows: $11 million in total Revenue from TV shopping
sales. “Revenue” shall be defined in this Agreement as gross sales minus
shipping and returns.

 

C. Pre-Paid Sales Advance. $50,000 of pre-paid sales advance upon execution of
the agreement.

 

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D. Kick-Off Fee. $50,000 kick-off fee on January 4, 2016 for services to be
performed as follows:

 

·Review of existing footage and materials, and meet with Kathy’s team

 

·Research and review of products, scientific claims, consumer testimonials,
expert testimonials, product marketplace, similar claims in industry and
industry product offers in retail, on infomercial and on TV shopping.

 

·Begin Assembly of Production Team- KBHJJ will interview 5 producers, evaluate
production proposals and ideas,

 

·Infomercial Script Writers- KBHJJ will begin to interview and evaluate several
script writers in addition to any script writers attached to the producers

 

·Review and evaluate packaging and offer for Infomercial

 

·Work closely with NuGene and KIWW team to: develop Infomercial concept, script,
website design, host to be paired with Kathy Ireland (if host different than Dr.
Kathy Anderson), product offering and any and all aspects of NuGene’s
obligations under the Brand Ambassador contract with KIWW. Utilize KIWW team,
resources and facilities were possible if it is deemed cost beneficial.

 

·Coordinate with NuGene team to perfect pitch and utilize the KH brand to
promote business. Promotion will include promotional video with KH produced by
KBHJJ and a mutually agreed personal appearance by KH

 

·Evaluate QVC and TV shopping opportunities and begin discussions with buyers
and legal department regarding claims and presentation. Begin discussions with
buyers in Jan Q1 2016.

 

·Identify potential candidates for and begin evaluation of on air host to be
paired with Kathy Ireland, transactional website designer, call center,
fulfillment operation, media buying company, and dub house set up.

 

E. 2.75% - Gross North America infomercial sales

 

F. 2.75% - Gross wholesale sales from big box retail, excluding SPA retail sales
after infomercial campaign roll out 

 

G. 5% - Gross wholesale international sales from brick and mortar retail,
excluding SPA retail sales), post infomercial campaign roll out

 

H. 7.5% - Gross wholesale QVC and TV shopping worldwide

 

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All gross sales percentages shall be paid on a quarterly basis. “Gross” shall
refer to gross revenue, minus shipping, returns, price adjustments, credits and
sales commissions.

 

All stock/shares provided herein are unregistered, restricted securities that
are highly speculative. KBHJJ agrees to comply with all applicable rules
(federal and state) regarding the sale or distribution of the unregistered
securities. Neither NuGene nor NUGN make or have made any warranties as to the
value or ability to sell such unregistered securities or to realize any amounts
in connection therewith.

 

2. KBHJJ SERVICES. KBHJJ agrees to perform using best efforts in connection with
rendering the following specific services (collectively, the “Services”):

 

A. Promotion in markets in the United States and internationally for sales of
NuGene products, through, by way of example and not limitation, social media,
press interviews, and trade shows and/or industry events at the expense of
NuGene. All expenses must be pre-approved by NuGene in advance.

 

B. Assemble the Team to produce and oversee all aspects of a full length 30
minute infomercial, the steps of which are described in Exhibit A, attached
hereto. KBHJJ will be responsible to obtain all copyright and actor releases, so
that NuGene has all rights to own and use the infomercial.

 

C. KBHJJ will act as the sales agent and representatives for NuGene in the
worldwide home shopping category.

 

D. Advising NuGene on strategies to expand the scope of its product marketing,
through, by way of example and not limitation, direct to consumer sales via
infomercial, home shopping networks, Speaking events, webinars and internet
sales.

 

E. Advising NuGene with regards to the business plan, the pitch and fundraising
efforts.

 

F. Providing NuGene with the right to use of the name, likeness and applicable
titles of KH, including “Original Shark from Shark Tank,” “Inventor of the
Infomercial,” “Founder of the Electronic Retailers Association” and “Pioneer of
AS SEEN ON TV Industry” for the purposes of promoting the products of NuGene in
which case all promotional materials are submitted in writing no later than
seven (7) days prior to the activities or printing of materials for approval in
writing and subsequently authorized by KH and KBHJJ.

 

G. KH making personal appearances during the Term of this Agreement where the
locations and events as well as length of time per appearance are mutually
agreed upon by the Parties. Reasonable airfare, lodging and ground
transportation expenses shall be paid by NuGene for the Team with prior approval
of NG in writing for such appearances. By way of example and not limitation,
such appearances may include trade shows, NuGene events, NuGene investor
relations, NuGene corporate meetings, TV appearances and other promotional
events for the NuGene products and NuGene.

 

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H. The Services will be provided as Works Made for Hire and NuGene will own all
rights, title and interest in and to the Services and all results, including but
not limited to media, advertising, footage, materials and the infomercials.

 

3. OTHER ACTIVITIES.

 

The parties acknowledge that KBHJJ will render the Services using best efforts
and will be engaged in other business activities which are unrelated to NuGene
and the Services.  Nothing contained herein shall in any way restrict KBHJJ’s
continued involvement with other business activities, except those that are in
conflict with this Agreement.

 

4. TERM AND TERMINATION.

 

A. Term. Five (5) year initial term. NuGene has the option to extend the term
for an additional Five (5) year period.

 

B. Termination. NuGene may terminate this Agreement and all compensation herein
(except for the Kick-Off Fee) if KBHJJ fails to provide any and all of the
Services herein by providing written notice with a 30-day right to cure. In the
event of any termination, all compensation herein shall terminate after a period
of 2 years following date of termination excluding the vesting of warrants which
shall terminate upon failure to cure the breach.

 

5. NUGENE DUTIES.

 

A. NuGene warrants and represents that all claims about ingredients in the
NuGene products are truthful and accurate.

 

B. NuGene agrees to provide the technical resources and medical personnel and
studies to back any claims made by NuGene regarding any and all products up to
the legal standards of the FCC, homes shopping channels worldwide, foreign
government or regional governing body regulations, medical practice standards
and product approvals in the area of NuGene products and claims worldwide.

 

6. PRESS RELEASE. NuGene may issue a press release related to this Agreement
upon prior written approval of KBHJJ. KBHJJ is required promptly to report via
email directly to the CEO (alikh@nugene.com) and carbon copy (“cc”) the
President (david@nugene.com) and VP of Business Development of NuGene on all
material milestones such as launch of infomercial, launch of product on home
shopping, and lauch of direct to consumer product campaign in foreign countries
or territories achieved and assist in the drafting of press releases related to
their material milestones.

 

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7. GOVERNING LAW AND JURISDICTION. The laws of the State of California will
govern this Agreement. The Parties consent to the exclusive jurisdiction of the
state and federal courts located in Orange County, California for any dispute
arising from or out of this Agreement, and the Parties waive their right to have
an action under this Agreement brought or tried elsewhere.

 

8. OTHER.

 

A. Assignment. The Parties may not assign this Agreement or any interest herein
without the other Party’s’ express written prior permission.

 

B. Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be an original, but all of which together will constitute one
instrument.

 

C. No Implied Waiver. Either Party’s failure to insist in any one or more
instances upon strict performance by the other Party or any of the terms of this
Agreement shall not be construed as a waiver of any continuing or subsequent
failure to perform or delay in performance of any term thereof.

 

D. Final Agreement. This Agreement terminates and supersedes all prior
understandings and agreements on the subject matter hereof. This Agreement may
be modified only by a further writing that is duly executed by both parties.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the date first set forth above.

 

NUGENE KBHJJ, LLC

 

By:     By:  

 

Title:     Title:  

 

Printed Name:     Printed Name:  

 

Address:     Address:  

 

     

 

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EXHIBIT A

 

EVALUATION OF CURRENT FOOTAGE AND MATERIALS: WEEK ONE – THREE

 

Review of all footage and meet with Kathy Ireland’s production company if
necessary. Evaluate all testimonials and materials used in the footage.

 

PRE-PRODUCTION PHASE: WEEK THREE - EIGHT

 

ON AIR HOST WITH KATHY IRELAND

 

The structure of the on air personality agreement depends on the level of
talent. Deals can be priced on a per day fee which will include a day rate for
shooting, a rate for rehearsal, and re-shoot days; a turn- key “show” rate which
includes rehearsal and shooting with a re-shoot day rate; and a reduced rate for
day or show fees with a 1%. KBHJJ will present hosts to NG to choose from to
sell the products to the public with Kathy Ireland, pending KIWW approval.

 

TRANSACTIONAL WEBSITE DESIGN AND BUILD

 

Evaluate multiple microsite creators within the infomercial website to build a
high impact, sales and conversion tested website. This site will include a
backend technology that allows NG to upsell, down sell, and cross sell
additional items to the consumer to increase Average Order Value. Website will
be the property of NuGene creative content is subject KIWW approval.

 

CALL CENTER

 

The second method to take a sale is through a call center. The call center can
be one of two natures – Live Operators or IVR (Interactive Voice Response).
KBHJJ will explore both options, each have their pros and cons, but depending on
the creative of the infomercial and the offer.

 

FULFILLMENT

 

KBHJJ will work with NG current fulfillment set up or look for other fulfillment
houses. KBHJJ have worked with several fulfillment centers in the infomercial
world that can take the order, pick, pack and ship, hit the credit cards if
necessary, and handle customer service if necessary.

 

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INFOMERCIAL MEDIA BUYING AND EVALUATION

 

This is one of the most important steps on an ongoing basis. Media will be the
lifeline to run the business and drive revenue. KBHJJ will select a leading
media agency within the infomercial business that has experience with this
category. KBHJJ will go over media plans and work with the agency to get the
best rates possible for the most desirable timeslots, stations, and locations.

 

DUB HOUSE SET UP

 

Before the infomercial goes to the TV station, it needs to flow through a
dubhouse, which will prepare the show, dub and Voice Over the 800 number, and
send it to each individual station.

 

TELEVISION STANDARDS AND FCC REGULATIONS DOCUMENTATION

 

KBHJJ will suggest a number of legal compliance groups/firms that are in the
business of clearing products and businesses for sales on broadcast and cable
TV. This is much different and comes with a much higher degree of scrutiny than
selling in retail, online or in catalogues.

 

INFOMERCIAL PRODUCTION: WEEK FIVE – TWENTY ONE

 

INFOMERCIAL PRODUCTION COST RANGE: $250,000.00 to $400,000.00

 

50% of TOTAL COST UP FRONT

 

This cost depends on which producer is selected, style of the show, and the
level of production value.

 

1. Product evaluation by Infomercial Production Company (IPC): WEEK FIVE

 

KBHJJ provide IPC with NG product for research through product use, along with
any product videos or instruction that will be helpful in the evaluation

 

2. Initial Pricing and Offer Structure with Potential Free Gifts and Upsell
Items: WEEK FIVE - SIX

 

KBHJJ and NG will provide IPC with a various price points for and combinations
of NG products, and any other products that can be added for free as
complimentary items for the offer.

 

3. Target Consumer Evaluation: WEEK FIVE - SEVEN

 

IPC will use sales and media data for the products sold through Direct Response
(“DR”) Channels similar to ours and evaluation of similar industries

 

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4. Consumer and Expert Testimonials: THREE – TWENTY ONE

 

KBHJJ provide IPC with at least 15 testimonials from average consumers using NG
for various activities and as many “expert” testimonials (high profile
professionals, celebrities, doctors, researchers, etc.)

 

5. Drafting and Finalizing the Script: EIGHT – ELEVEN

 

KBHJJ and IPC will assign a screenwriter that has worked with products in the
health and beauty categories. There will be multiple back and forths with IPC,
screenwriter, and KBHJJ to get to the best final script as possible. This will
be tailored from information from NG, who the hosts are, the style of
infomercial, big ideas, and many other variables. The script will show word for
word what the hosts of the infomercial will say (some hosts may not read word
for word), as well as accompanying video that will be on screen during those
words.

 

6. Shooting the Show: WEEK TWELVE – FIFTEEN

 

After Scripting is finalized, IPC will begin to plan the shoot dates. This will
most likely be within a 1-3 day period at a single location, then followed up
with individual product shots, testimonials, and B-Roll on other days. Depending
on the IPC, the location of this shoot can be anywhere in the United States.

 

7. Editing: WEEK SIXTEEN – NINETEEN

 

The editing process immediately follows the shooting of the show. After all
footage is captured, the IPC will throw out an initially rough draft. This is to
get all of the shot and ideas in one video, then edit from there. This rough
draft could be twice the length of the infomercial KBHJJ will ultimately come up
with. KBHJJ will go through an editing process that can take several versions of
the rough draft, until the final draft it approved by all parties.

 

8. Infomercial Media Test: TWENTY – TWENTY ONE

 

MEDIA TEST BUDGET: $10,000 UP TO $20,000 PER WEEK

 

After the final show is approved, a testing media plan would have already been
created and approved. This show will then go to the media agency and dubhouse to
get it ready for the media test. This test will first be held over a one week
period, then depending on results, may have to test one or two more times before
a roll out decision is made.

 

9. Additional Edits, Calls to Action and Shooting Days: AS SITUATION DICTATES

 

Some level of adjustment inevitably needs to be made in just about every show.
KBHJJ will get data from the media buyer and analyze everything from pace of the
show and call to action effectiveness to offer combination and price point.

 

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10. Adjustments to Call Center Scripts: ONGOING DURING TEST AND ROLLOUT

 

The call center will be monitoring the effectiveness of the product sales
scripts based on random selection of both successful and unsuccessful closes, as
well as the customer experience from intake to sales offer to upsell offers.
Adjustments will be made to try to achieve a higher close rates on the basic
product TV kit and upsells.

 

11. Media Rollout

 

MEDIA ROLLOUT BUDGET: $50,000 UP TO $200,000 PER WEEK FOR FIRST 4 to 6 WEEKS
(Until sales are paying for all media costs)

 

After the initial test and proven success, KBHJJ will work with the media agency
(or multiple) to plan and execute on the best media possible on an ongoing basis
to drive the best results. Additionally, KBHJJ will look to expand distribution
into brick and mortar, live shopping, and international distribution.

 

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