Exhibit 3.14
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT ("Agreement") is made as of April 30, 1997, by
and between Sky Games International Ltd., a Bermuda exempted company (the
"Company"), and Xxxxx X. Xxxxxx ("Consultant").
R E C I T A L S
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A. The Company acquired certain assets used in the Business (as herein
defined from Sky Games International Inc., a Nevada corporation controlled by
Consultant ("SGII"), pursuant to an Asset Purchase Agreement dated November 7,
1991, as amended (the "Purchase Agreement").
B. Consultant has provided various consulting and advisory services to
the Company in connection with the Business since it was acquired from SGII and
the Company desires for Consultant to continue providing such services.
C. The Company and Consultant desire to (i) specify the terms of
Consultant's role with the Company and (ii) provide for the protection of
Confidential Information (as herein defined) and restrictions on Consultant
during and following the Consulting Term (as herein defined).
A G R E E M E N T S
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Adoption of Recitals. The parties hereto adopt the foregoing Recitals
and agree and affirm that construction of this Agreement shall be guided
thereby.
2. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
"Affiliate" of a Person means, a spouse or child of such Person, any
other Person controlling, controlled by or under common control with such Person
and any partner of such Person if such Person is a partnership and any member of
such Person if such Person is a limited liability company;
"Board" means the board of directors of the Company;
"Business" means the development, sale and operation of content for
in-flight entertainment systems (including, without limitation, gaming systems),
and any other business conducted by the Company or any subsidiary;
"Competing Business" means any business which is, in whole or in part,
directly or indirectly, engaged in the Business;
"Confidential Information" means any information of any kind relating
to the Business,
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Exhibit 3.14
the Company Group or any Affiliates of a member of the Company Group except such
information as (a) was publicly available prior to the date of this Agreement or
becomes a part of the public domain, without fault or breach of Consultant, (b)
was known to Consultant prior to this Agreement without any obligation of
confidentiality by Consultant, (c) is rightfully obtained by Consultant from a
third party who does not have any obligation of confidentiality with respect to
such information or (d) Consultant is advised in writing by legal counsel that
such information is required to be disclosed by law and then only such
information as is required to be disclosed and only if Consultant has given the
Company reasonable prior notice of the obligation prior to any disclosure;
"Company Group" means the Company and its Subsidiaries;
"Intellectual Property" shall mean all trade secrets, ideas,
inventions, designs, developments, devices, methods and processes (whether or
not patented or patentable, reduced to practice or included in the Confidential
Information) and all patents and patent applications related thereto, all
copyrights, copyrightable works and mask works (whether or not included in the
Confidential Information) and all registrations and applications for
registration related thereto, all Confidential Information, and all other
proprietary rights contributed to, or conceived or created by, Consultant
(whether alone or jointly with others) at any time during Consultant's
engagement by the Company that: (a) relate to the Business or to the actual or
anticipated research or development of the Company Group; (b) result from any
work that Consultant performs for the Company; or (c) are created using the
equipment, supplies or facilities of the Company or any Confidential
Information.
"Person" means an individual, a partnership, a corporation, a limited
liability company or partnership, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or the United States of
America or any other nation, any state or other political subdivision thereof,
or any entity exercising executive, legislative, judicial, regulatory or
administrative functions of government;
"Subsidiary" means: (i) any Person of which the Company owns, directly
or indirectly, securities having a majority of the voting power in electing the
board of directors directly or through one or more subsidiaries (or, in the case
of a partnership, limited liability company or other similar entity, securities
conveying, directly or indirectly, a majority of the economic interests in such
partnership or entity), or (ii) any other Person of which any member of the
Company Group serves as general partner or managing member; and
"Termination Date" means the date on which the Consulting Term expires
or terminates or its terminated for any reason.
3. Engagement and Scope of Duties.
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(a) The Company hereby engages Consultant as a consultant to the
Company, and Consultant hereby accepts such engagement, to provide the services
described in paragraph (b) below, all on the terms and subject to the conditions
set forth herein.
(b) Consultant shall be reasonably available to the Board and
executive officers of the Company to render, upon request, advice with respect
to (i) the general supervision and
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Exhibit 3.14
management of the Business as conducted by the Company Group, (ii)
developing and integrating the products offered by the Company Group with
the systems of its clients, and (iii) and protecting and promoting the
reputation and goodwill of the Company Group and its products.
4. Term. The term of the engagement of Consultant by the Company as a
consultant under this Agreement (the "Consulting Term") shall:
(a) commence as of the date hereof and shall expire on April 30,
1998; and
(b) may be terminated by either party at any time: (a) by service of
written notice of such termination not less than 45 days prior to the
effective date of such termination; and (b) immediately upon a material
breach of this Agreement by the other party.
5. Consulting Fee.
(a) The Company shall issue Consultant five hundred eighty-six
thousand seventy-seven (586,077) fully paid shares of common stock, par
value Cdn.$01 per share, of the Company (the "Common Stock") as the sole
consideration for all consulting services previously furnished by
Consultant to the Company and for all services to be provided by Consultant
to the Company hereunder. Consultant shall be reimbursed for all reasonable
expenses incurred by Consultant in performing his services hereunder;
provided he has received prior written authorization from the Chief
Executive Officer to incur such specific expenses.
(b) The Company shall deliver to Consultant as promptly as
practicable but no later than May 30, 1997, a certificate representing the
Common Stock to be issued to Consultant under this Agreement bearing the
appropriate legends to indicate it is restricted stock.
(c) All payments payable to or on behalf of Consultant hereunder
shall be subject to such deductions and withholdings as required by
applicable law and the Company shall deliver a Form 1099 to Consultant.
(d) In the event this Agreement is terminated pursuant to Section
4(b), no part of the Common Stock paid pursuant to Section 5(a) as the fee
hereunder shall be refunded to the Company.
(e) In the event that Consultant sells, transfers, attempts to sell
or attempts to transfer the Common Stock to be issued to Consultant under
this Agreement within one year after issuance of the Common Stock in a
manner which violates federal or state securities laws, including, without
limitation, the 1933 Act (as herein defined), the Company shall have the
right to repurchase the Common Stock at a price of one dollar ($1.00) per
share.
6. Covenants of Non-Competition and Non-Disclosure. Consultant
acknowledges that: through his continuing service to the Company, he has had and
will have and has learned and will learn valuable trade secrets and other
proprietary information relating to the Business, including without limitation,
Confidential Information; has been and will be exposed to and may have been and
may be
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Exhibit 3.14
involved in creating Intellectual Property that may be subject to trade secret
protection; and the services of Consultant are unique. Accordingly, as an
inducement to the Company to enter into this Agreement and in consideration of
the Company's agreement contained in Sections 4 and 5 hereof, Consultant
covenants and agrees that:
(a) from the date hereof and continuing for the lesser of (x) one (1)
year from the Termination Date and (y) the longest time permitted by
applicable law, neither Consultant nor any Affiliate of Consultant shall do
any one or more of the following, directly or indirectly:
(i) engage or participate (including by advertising and other
forms of solicitation), anywhere in the world (Consultant hereby
acknowledging that since the Company's customers are international
airlines, the geographic scope of the Business as conducted by the
Company Group is worldwide), as an owner, director, employee, partner,
shareholder, consultant, or (without limitation by the specific
enumeration of the foregoing) otherwise in any Competing Business; or
(ii) take any actions which are calculated to persuade any
current or potential customers, employees, representatives or agents
of the Company Group to terminate their association with the Company;
or
(iii) hire, engage or in any way retain any person who was an
employee, representative or agent of the Company Group at any time
during the Consulting Term; and
(b) during the time that he is engaged by the Company, and for the
longest period permitted by law following the Termination Date, he will not
divulge to persons not employed or engaged by the Company or use for his
own benefit or the benefit of Persons not employed or engaged by the
Company, any Confidential Information.
In the event of any breach of subsection (a) or (b) of this Section 6, the time
period during which Consultant remains in breach of said subsection shall extend
the term of each covenant contained in said subsection for the period of such
breach. The foregoing covenants are in addition to, and shall not be construed
to be in derogation of Consultant's obligations under the Purchase Agreement.
7. Ownership. All Intellectual Property is, shall be and shall remain the
exclusive property of the Company. Consultant hereby assigns to the Company all
right, title and interest in and to the Intellectual Property; provided,
however, that, when applicable, the Company shall own the copyrights in all
copyrightable works included in the Intellectual Property pursuant to the "work-
made-for-hire" doctrine (rather than by assignment), as such term is defined in
the 1976 Copyright Act. All Intellectual Property shall be owned by the Company
irrespective of any copyright notices or confidentiality legends to the
contrary which may have been placed on such works by Consultant or others.
Consultant shall ensure that all copyright notices and confidentiality legends
on all Intellectual Property authored by Consultant shall conform to the
Company's practices and shall specify the Company as the owner of the work.
8. Return of Documents. Promptly upon the Termination Date, Consultant
(or in the event
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Exhibit 3.14
of his death, his personal representative) shall, at the written request of the
Company, return to the Company any and all copies (whether prepared by himself
or by any member of the Company), of books, records, notes, materials, memoranda
and other data containing or pertaining to Confidential Information or
Intellectual Property, which are in his possession or control at the time of
such termination or expiration. Consultant acknowledges that he does not have,
nor can he acquire, any property rights or claims to any of such materials or
the underlying data.
9. Cooperation. At the request of the Company or any of its Affiliates
made at any time or from time to time hereafter, Consultant (or in the event of
his death, his personal representative) shall make, execute and deliver all
applications, papers, assignments, conveyances, instruments or other documents
and shall perform or cause to be performed such other lawful acts as the Company
or any of its Affiliates may deem necessary or desirable to implement any of the
provisions of this Agreement, and he shall give testimony and cooperate with the
Company in any controversy or legal proceedings involving the Company or any of
its Affiliates. The Company shall reimburse Consultant for his reasonable
expenses which are incurred in connection with the giving of any such testimony.
10. Representations and Warranties. Consultant hereby represents and
warrants:
(a) the Common Stock to be acquired by Consultant pursuant to this
Agreement is and shall be acquired for such holder's own account, for
investment purposes only and not with a present view to, or intention of,
distribution or resale thereof in violation of the United States Securities
Act of 1933, as amended (the "1933 Act") or any state securities laws and
that, irrespective of any other provisions of this Agreement, such Common
Stock shall be transferred only in compliance with all applicable federal
and state securities laws, including, without limitation, the 1933 Act;
(b) the shares of Common Stock to be received by Consultant hereunder
are not registered under the 1933 Act and must be held until such shares of
Common Stock are registered under the 1933 Act or an exemption from such
registration is available; the Company shall have no obligation to take any
actions that may be necessary to make available any exemption from
registration under the 1933 Act; and the Company shall place "stop
transfer" restrictions on the party responsible for recording transfers of
shares of Common Stock in violation of the foregoing provisions of this
paragraph;
(c) Consultant is familiar with Rule 144 adopted by the United States
Securities and Exchange Commission (the "SEC") which establishes guidelines
governing, among other things, the resale of "restricted securities"
(securities, such as shares of Common Stock acquired hereunder);
(d) Consultant is able to evaluate the risks and merits of the
transaction contemplated by this Agreement and of making an informed
decision with respect thereto and has had an opportunity to ask questions
and receive answers concerning the terms and conditions of this Agreement
and to consult with legal counsel regarding this Agreement.
11. Expenses. The Company shall reimburse Consultant for the reasonable
professional fees and expenses of one (1) law firm and one (1) financial advisor
incurred by him in connection with the
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Exhibit 3.14
negotiation, preparation, execution and delivery of this Agreement upon the
presentation of proper invoices therefor (including supporting back-up such as
itemization of expenses and time entries) in an aggregate amount not to exceed
five thousand dollars ($5,000). The Company shall not be liable for any other
costs or expenses incurred by Consultant in connection with this Agreement or
the performance of his obligations hereunder.
12. Enforcement. Consultant agrees and acknowledges that his violation or
breach of the covenants contained in this Agreement shall cause the Company
irreparable injury and, in addition to any other right or remedy available to
the Company at law or in equity, the Company shall be entitled to enforcement by
court injunction. Notwithstanding the foregoing sentence, nothing herein shall
be construed as prohibiting the Company from also pursuing any other rights,
remedies or defenses, for such breach or threatened breach including receiving
damages and attorney's fees. The election of any remedy shall not be construed
as a waiver on the part of the Company of any rights it might otherwise have at
law or in equity. Said rights and remedies shall be cumulative.
13. Construction. In the event any court shall finally hold that the time
or territory or any other provision of this Agreement constitutes an
unreasonable restriction against Consultant, Consultant agrees that the
provisions hereof shall not be rendered void, but shall apply as to such time,
territory, and other extent as such court may judicially determine or indicate
constitutes a reasonable restriction under the circumstances involved.
14. Agreement Not a Partnership or Property Interest
(a) The parties hereto intend by this Agreement solely to effect the
engagement of Consultant as an independent contractor. No other
relationship is intended to be created between the parties hereto. Nothing
in this agreement shall be construed as (i) giving Consultant any rights as
a partner in or owner of the Company, or (ii) entitling Consultant to
control in any manner the conduct of the Company's business.
(b) Nothing in this Agreement shall be deemed to create or constitute
the relationship of employer and employee between the Company and
Consultant. Consultant shall have no authority to act on behalf of or bind
the Company.
15. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by confirmed facsimile (provided,
however, that notices delivered by facsimile shall only be effective if such
notice is also delivered by hand, or mailed by first class mail (postage prepaid
and return receipt requested) or sent by reputable overnight courier (charges
prepaid), on or before two (2) business days after its delivery by facsimile) or
by reputable overnight courier service (charges prepaid) to the recipient at the
address indicated below:
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Exhibit 3.14
To the Company:
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Sky Games International Ltd.
0000-000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
With a copy to:
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Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. XxXxxx
Telecopier: (000) 000-0000
To Consultant at his last known address and information as disclosed
by the books and record of the Company
or such other address or information or to the attention of such other person as
the recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement shall be deemed to have been given, (a)
if delivered in person, when so delivered, (b) if sent by facsimile or overnight
courier, one business (1) day following transmission or delivery to courier (as
the case may be), or (c) if mailed, three (3) days following deposit in the
U.S. mail.
16. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which, when taken together,
shall constitute one instrument.
17. Number and Gender. As used in this Agreement and each schedule and
exhibit attached hereto, the masculine, feminine and neuter gender and the
singular or plural number shall be deemed to include the others whenever the
context so indicates or requires.
18. Descriptive Headings. Title headings are for reference purposes only
and shall have no interpretive effect.
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. Any amendments to
this Agreement must be made in writing and duly executed by each of the parties
or by an authorized representative or agent of each such party.
20. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, representatives, successors and
permitted assigns. The rights and obligations of Consultant under this
Agreement shall not be assignable without the prior written consent of the
Company.
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Exhibit 3.14
21. Applicable Law. This Agreement shall be governed as to validity,
construction and in all other respects by the laws of the State of Tennessee
applicable to contracts made in that State.
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Exhibit 3.14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SKY GAMES INTERNATIONAL LTD.
By: /s/ Xxxxxxx X. Xxxxx
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Its: President
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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