EXECUTIVE MANAGEMENT AGREEMENT
THIS
AGREEMENT
is made
as of the 18th day of December, 2007 (this “Agreement”), by and between
KIT
CAPITAL LIMITED,
a
company duly licensed or incorporated in Dubai, United Arab Emirates, with
its
principal offices located at Xxxxx Xxxxx Xxxx, Xxxxxxxx #0, Xxxxx 000, Xxxxx,
XXX (together with its subsidiaries and affiliates, “KIT”), and ROO
GROUP, INC.,
a
Delaware corporation, with its principal offices located at 000 Xxxx
00xx
Xxxxxx,
0xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (together with its wholly owned subsidiaries, the
“Company”).
WITNESSETH
WHEREAS,
the
Company
is a
service provider engaged in the business of online digital media and
advertising; and
WHEREAS,
the
Company desires to engage KIT to perform certain services for the Company as
more fully described herein, starting January 9th,
2008;
and
WHEREAS,
KIT
desires to invest in and manage the Company, commencing as of the Start Date,
upon the terms and conditions hereinafter set forth.
NOW,
THEREFORE,
it is
mutually agreed by and between the parties hereto as follows:
ARTICLE
I
SERVICES
1.1 Subject
to and upon the terms and conditions of this Agreement, the Company hereby
agrees to hire KIT, and KIT hereby agrees to provide management services to
the
Company.
1
ARTICLE
II
DUTIES
2.1 KIT,
and
each of the persons individually designated herein to perform services for
the
Company on behalf of KIT, shall, during the term of this Agreement, report
to
the Company’s Board of Directors (the “Board”), and shall perform such duties
and functions as are customarily assigned to the position(s) to which such
persons are assigned as well as such other duties and responsibilities not
inconsistent therewith as may be assigned to him from time to time by the Board,
including the following: (i) KIT shall designate the following KIT employees
(the “KIT Employees”) to assume the respective positions of Chief Executive
Officer, Head of Communications (including investor and press relations) and
Corporate Development Manager of the Company: Kaleil Xxxxx Xxxxxx (“Xxxxx
Xxxxxx”), Xxxxx Xxxxxx (“Xxxxxx”) and Xxxxxxx Xxxx (“Davi”); (ii) KIT and/or the
KIT Employees shall provide (a) overall strategic and operational assessments
of
the Company’s businesses; (b) day-to-day strategic and operational management;
(c) cost reduction and efficiency realization; (d) competitive business reviews;
(e) business development, including sales, sales support, equity capital
fundraising, merger and acquisition sourcing and execution, etc.; (f) human
resources reviews and recommendations; and (g) branding and marketing; (iii)
KIT
shall be expressly authorized on behalf of the Company to terminate staff,
close
offices, divest assets and take all such other actions as it deems necessary,
in
its reasonable judgment and subject to board approval where required, to achieve
cost reductions and efficiencies for the Company; (iv) Kaleil Xxxxx Xxxxxx
shall
have full authority to act for and bind the Company and shall be an authorized
signatory of the Company, subject to prior board approval. Xxxxxx Xxxxx
(“Xxxxx”) shall resign as Chief Executive Officer and assume the position of
Founder and Vice-Chairman as of the Start Date. In the event that any KIT
employees cease to serve in the roles designated in Section 2.1(i) above, then
and in such event a suitable replacement may be made by KIT subject to approval
by the Board, and should such approval not be granted, the compensation payable
pursuant to this Agreement shall be adjusted as shall be reasonably agreed
upon
in good faith between the parties.
2
2.2 KIT
Employees shall devote so much of their time to the activities of the Company
as
is necessary and appropriate to carry out their duties hereunder. The foregoing
notwithstanding, the Company acknowledges and agrees that during the term of
KIT’s involvement with the Company, KIT, its affiliates, employees, agents or
consultants, may perform and continue to perform consulting services for other
entities (excluding any “IPTV” provider) and may accept directorships with and
continue to serve as a director of such entities, so long as such activities
do
not materially interfere with the performance of KIT’s responsibilities in
accordance with this Agreement or violate the provisions of ARTICLE IX of this
Agreement. For example, the Company acknowledges and is aware of KIT’s current
investments, board memberships or consulting activities for World Recognition
International, LLC, Oakwood Homes Corp., Automated Benefits Corp., Heart of
Entrepreneurship, LLC, and Yom Investments, Ltd. The Company further
acknowledges that KIT is a shareholder and member of the board of directors
of
JumpTV Inc. and the Company expressly waives any conflict of interest that
may
now exist or may later arise as a result of KIT’s relationship with JumpTV Inc.
2.3 As
a
means of controlling Company costs, commencing as of the Start Date and
continuing for the duration of the term hereof, unless the Board determines
otherwise or designates another delegated party, no expenditure of more than
$2,500 may be made by the Company or any of its employees, agents or consultants
without one of the KIT Employees’ prior written consent, which consent may be
given by email.
3
2.4 Xxxxx
Tuzman shall be appointed to the Company’s Board as Chairman as of the Start
Date, which will at that time be comprised of no more than two (2) additional
Board members. Kaleil Xxxxx Xxxxxx, on behalf of KIT, shall have the right
to
designate by notice to the Company up to four persons to serve from time to
time
as members of the Board of Directors. The Company shall, from time to time,
use
its best efforts to cause the election of the person(s) so designated to serve
as members of the Board of Directors as promptly as possible. If for any reason
under applicable law or the Company’s By-laws any such designee cannot
immediately be elected to the Board of Directors, then until such time as such
person(s) is elected to the Board of Directors (i) the person(s) so designated
shall have the right to be present at all meetings of the Board of Directors,
but shall not be entitled to vote on any action taken at such meeting, (ii)
the
Company shall provide notice to such person(s) of the date, place and time
of
each such meeting at least the same period in advance as the shortest such
notice provided to any member of the Board of Directors, (iii) the Company
shall
provide such person(s) all agendas and other information and materials provided
to the Board of Directors contemporaneously with the time the Company provides
the same to the Board of Directors and (iv) the Company shall provide to such
person(s) copies of each proposed unanimous written consent of the Board of
Directors which consent is given to all members of the Board of Directors for
execution by the directors during such period, at the same time such written
consent is given to all members of the Board of Directors. In case any person
designated as a member of the Board of Directors pursuant to this Section 2.4
shall resign, die, be removed from office or otherwise be unable to serve,
the
Majority Holders shall be entitled to appoint a Person to designate a
replacement pursuant to, and in accordance with, this Section 2.4. Ultimately,
during the term of this Agreement the Company’s Board shall consist of no more
than seven (7) members.
2.5 KIT,
acting by Xxxxx Tuzman, shall report directly to the Board.
4
ARTICLE
III
COMPENSATION
3.1 Subject
to the terms of this Agreement, during the term of KIT’s managements services
provided to the Company, KIT shall be compensated for its services (including
the services of Xxxxx Xxxxxx, Xxxxxx and Xxxx) initially at the rate of Fifty
Thousand Eight Hundred ($50,800) Dollars per month, subject to such increases
as
the Board may determine in accordance with Section 6.1 hereof (the “Base
Compensation”). KIT shall be responsible for, and shall indemnify Company in
connection with, any employer obligations arising in connection with sums paid
hereunder. The Base Compensation shall commence as of the Start Date (with
the
first monthly installment due as of that date). For avoidance of doubt, if
the
Company were to determine that any withholding taxes were required on the Base
Compensation payments, such Base Compensation would be adjusted upwards such
that the net cash payment to KIT remained at the $50,800 level.
3.2 KIT
shall
receive an initial signing incentive payment of Sixty-Eight Thousand Five
Hundred ($68,500) Dollars upon the full execution of this
Agreement.
ARTICLE
IV
STOCK
OPTIONS; SYNTHETIC STOCK; RIGHT TO PURCHASE STOCK
4.1 As
an
inducement to KIT to enter into this Agreement, the Company hereby grants to
KIT
and/or its designees options to purchase shares of the Company’s common stock
(“Common Stock”), as follows:
5
Subject
to the terms and conditions of
the Company’s Employee Stock Option Plan (the “Plan”), which are incorporated
herein by reference, KIT is hereby granted options (the “Options”) to purchase
2,100,000 of the Company’s Common Stock 700,000 shall vest as of the Start Date
and the remaining 1,400,000 of which shall vest, pro rata, on a monthly basis,
over a period of three (3) years commencing as of the Start Date
(1/36th per month). The exercise price of the Options shall be fixed
by the Board of the Company no later than 8:00AM on the day following the date
of execution of this Agreement, and shall be 5% higher than the weighted average
closing price of the three previous trading days.
4.2 Xxxxxx
and Davi shall receive like Options (same issuance date, vesting schedule and
exercise price) commensurate with their respective roles with the
Company.
4.3 As
a
further inducement to KIT to enter into this Agreement, the Company shall
promptly institute a synthetic or “phantom” stock plan (the “Phantom Stock
Plan”) pursuant to which the Company shall grant KIT “phantom” shares (the
“Phantom Shares”) equal to 2,100,000 shares of the Company’s Common Stock. The
Phantom Shares shall vest, pro rata, on a monthly basis, over a period of three
(3) years commencing as of the Start Date (1/36th
per
month). The terms of the Phantom Stock Plan shall be mutually acceptable to
the
Company and KIT.
4.4 Within
15
days of receipt of a written request from KIT during the first 150 days after
execution of this Agreement, the Company shall use its best efforts to cause
the
holders of the Company’s preferred stock (“Preferred Stock”) to agree to sell to
KIT (subject to all applicable securities laws, rules and regulations), at
KIT’s
sole option, a maximum of Five Million One Hundred Thousand (5,100,000) shares
of Preferred Stock at a price per share of US$0.38. The Company’s failure to
comply with its obligations under this Section 4.4 shall be deemed a material
breach of this Agreement.
6
4.5 Additionally,
within 30 days after KIT’s written request (subject to all applicable securities
laws, rules and regulations) at any point during the first 150 days after
execution of this Agreement, the Company shall permit KIT to purchase from
the
Company a maximum of five million (US$5,000,000) dollars of the Company’s Common
Stock at a price per share of no higher than a 15% premium to the closing price
of the Common Stock on the date of execution of this Agreement, and an
additional minimum of ten million (US$10,000,000) dollars of the Company’s
Common Stock at a price not exceeding ninety (90%) percent of the five (5)
day
trailing weighted average trading price of such Common Stock at the time of
purchase. The second purchase of Common Stock (for US$10 million minimum) shall
be subject to prior Board approval. The Company’s failure to comply with its
obligations under this Section 4.4 shall be deemed a material breach of this
Agreement.
4.6
Following
the purchase by KIT of any of the shares of Preferred Stock and/or Common Stock
pursuant to Sections 4.4 and/or Section 4.5 above, the Company shall use its
best efforts to register the shares underlying and issuable upon conversion
of
the Preferred Stock and/or the Common Stock purchased by KIT on a Form SB-2
Registration Statement (or such other appropriate Form as is available for
use
in connection with the registration of such shares), subject to customary
underwriter cutbacks, if applicable, and shall rank in equal priority with
the
registration rights held by existing preferred stockholders.
7
ARTICLE
V
ADDITIONAL
INCENTIVE COMPENSATION
5.1 Upon
the
date the Company shall achieve (i) two (2) consecutive quarters of GAAP
profitability or (ii) the Company’s total monthly revenue equals or exceeds Six
Million ($6,000,000) Dollars (the “Milestone Date”), KIT shall be paid in stock,
within 15 days thereafter, an incentive bonus equal to the greater of (x) the
preceding twelve (12) months’ Base Compensation or (y) the previous month’s
monthly installment of Base Compensation multiplied by twelve (12). In addition,
all unvested Options and Phantom Shares shall vest as of the Milestone
Date.
ARTICLE
VI
COMPENSATION
ADJUSTMENT
6.1 Upon
each
anniversary date of the date hereof, the Board shall in good faith and based
upon the Company’s performance results for the preceding year determine whether
to adjust KIT’s Base Compensation and/or to issue KIT additional Options and/or
Phantom Shares upon substantially the same terms as are set forth above. It
is
anticipated that KIT’s compensation shall increase if performance results are
favorable.
ARTICLE
VII
BENEFITS
7.1 All
travel undertaken by the KIT Employees on behalf of the Company shall be at
the
sole cost and expense of the Company. Kaleil Xxxxx Xxxxxx shall be permitted
to
fly business class for all flights in excess of four (4) hours, provided best
available fares are sought. All lodging and food costs incurred by KIT Employees
while traveling and/or conducting business for the Company shall be advanced
or
reimbursed by the Company in accordance with Company policy as applied to like
executives.
8
7.2 In
addition, the Company shall pay any required security deposit or other deposits
and all relocation and furnishing costs up to a maximum of Thirteen Thousand
($13,500) Dollars for relocation of KIT employees and a New York City corporate
apartment for KIT employees.
7.4 During
the term of this Agreement and for a period of ninety (90) days after the
expiration or earlier termination thereof, the Company shall pay all monthly
costs for use by KIT Employees of Blackberry or similar hand-held devices and
cellular telephones. The costs shall be paid directly to the service provider
on
a monthly basis or shall immediately be reimbursed to KIT.
7.5 The
Company acknowledges that KIT shall hire forthwith an executive assistant (the
“EA”) at a maximum gross salary per month of Five Thousand Five Hundred ($5,500)
Dollars. Upon such hiring, the Company shall adjust the Base Compensation by
an
amount equal to the gross salary agreed to between KIT and the EA.
ARTICLE
VIII
EXPENSES
8.1 KIT
shall
be reimbursed by the Company for all reasonable expenses incurred for Company
business within ten (10) days after submission by KIT of appropriate receipts
or
expense reports in accordance with Company policy.
8.2 The
Company shall establish a Dubai “free zone” subsidiary (the “Dubai Subsidiary”)
and shall sponsor residency visas for Xxxxx Xxxxxx and Xxxxxx and pay all
associated costs thereof through the Dubai Subsidiary. In addition, the Company
or the Dubai Subsidiary shall pay all reasonable expenses of Xxxxx Tuzman and
Xxxxxx for travel to and from Dubai in connection with residency visa
requirements, at least two (2) times per year for each KIT
employee.
9
ARTICLE
IX
RESTRICTIVE
COVENANTS
9.1 KIT
recognizes and acknowledges that the Company, through the expenditure of
consider-able time and money, has developed and will continue to develop in
the
future information concerning customers, clients, marketing, business and
operational methods of the Company and its customers or clients, contracts,
financial or other data, technical data or any other confidential or proprietary
information possessed, owned or used by the Company, and that the same are
confidential and proprietary, and are "confidential information" of the Company.
In consideration of its retention by the Company hereunder, KIT agrees that
neither it, nor any of the KIT Employees and/or any other KIT employees or
agents will (KIT, the KIT Employees and/or any other KIT employees or agents
are
hereinafter collectively referred to as the “KIT Persons”), without the consent
of the Board, make any disclosure of confidential information now or hereafter
possessed by the Company to any person, partnership, corporation or entity
either during or after the term hereunder, except to employees of the Company
or
its subsidiaries or affiliates and to others within or without the Company,
as
KIT and/or such KIT Persons may deem necessary in order to conduct the Company's
business and except as may be required pursuant to any court order, judgment
or
decision from any court of competent jurisdiction. The foregoing shall not
apply
to information which is in the public domain on the date hereof; which, after
it
is disclosed to any of the KIT Persons by the Company, is published or becomes
part of the public domain through no fault of any of the KIT Persons; which
is
known to any of the KIT Persons prior to disclosure thereof to him by the
Company as evidenced by any of the KIT Persons written records; or, after any
of
the KIT Persons is no longer employed by the Company, which is thereafter
disclosed to any of the KIT Persons in good faith by a third party which is
not
under any obligation of confidence or secrecy to the Company with respect to
such information at the time of disclosure to any of the KIT Persons. The
provisions of this Section shall continue in full force and effect
notwithstanding any lawful termination of any KIT under this Agreement for
a
period of one year (1) following said termination.
10
a) During
the period from the date of this Agreement until one (1) year following the
date
on which KIT’s retention with the Company is lawfully and properly terminated,
none of the KIT Persons will, directly or indirectly, solicit, any individual
who was an employee of Company during the six (6) month period prior to the
lawful and proper termination of this Agreement, to leave Company's employ,
or
to become employed by any person or entity other than the Company.
b) KIT
acknowledges that the restrictive covenants (the "Restrictive Covenants")
contained in this ARTICLE IX are a condition of KIT’s retention and are
reasonable and valid in geographical and temporal scope and in all other
respects. If any court determines that any of the Restrictive Covenants, or
any
part of any of the Restrictive Covenants, is invalid or unenforceable, the
remainder of the Restrictive Covenants and parts thereof shall not thereby
be
affected and shall be given full effect, without regard to the invalid portion.
If any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or enforceable because of the geographic or temporal scope
of such provision, such court shall have the power to reduce the geographic
or
temporal scope of such provision, as the case may be, and, in its reduced form,
such provision shall then be enforceable.
c) If
KIT
breaches, or threatens to breach, any of the Restrictive Covenants, the Company,
in addition to and not in lieu of any other rights and remedies it may have
at
law or in equity, shall have the right to injunctive relief; it being
acknowledged and agreed to by KIT that any such breach or threatened breach
would cause injury to the Company and that money damages would not provide
an
adequate remedy to the Company.
11
ARTICLE
X
TERM
10.1 This
Agreement shall be for a three-year term (the “Initial Term”) commencing on
January 9, 2008 (the “Start Date”) and terminating on January 9th,
2011
(the “Expiration Date”), unless sooner terminated as provided herein or mutually
extended.
The
period commencing as of the Start Date and ending on the Expiration Date is
referred to herein as the “Services Term.”
10.2 Unless
this Agreement is earlier terminated pursuant to the terms hereof, the Company
agrees to use its best efforts to notify KIT in writing whether it intends
to
negotiate a renewal of this Agreement six (6) months prior to the Expiration
Date.
12
TERMINATION
11.1 The
Company may terminate this Agreement by giving a Notice of Termination (as
hereinafter defined) to KIT in accordance with this Agreement: (i) for Cause;
or
(ii) without Cause. For purposes of this Agreement, “Cause” shall mean: (i)
willful disobedience by KIT or any KIT Employee of a material and lawful
instruction of the Board; (ii) conviction of KIT or any KIT Employee of any
misdemeanor involving fraud or embezzlement or similar crime, or any felony;
(iii) fraud, gross negligence or willful misconduct in the performance of its
or
his duties to the Company; (iv)
the
determination by any regulatory or judicial authority (including any securities
self-regulatory organization) that Executive directly violated, before or after
the date hereof, any federal or state securities law, any rule or regulation
adopted thereunder; or (v) the continued and willful failure by Executive to
substantial-ly and materially perform his material duties hereunder;
provided
that the Company shall not have the right to terminate KIT pursuant to the
foregoing clauses (i) and (iii) unless written notice specifying such breach
shall have been given to KIT and, in the case of breach which is capable of
being cured, KIT or any KIT Employee, as the case may be, shall have failed
to
cure such breach within thirty (30) days after its or his receipt of such
notice.
11.2 KIT
may
terminate this Agreement by giving a Notice of Termination to the Company in
accordance with this Agreement, at any time, with or without Good Reason. For
purposes of this Agreement, “Good Reason” shall mean (i) a change in KIT’s or
any KIT Employee’s status, title, position or responsibilities (including
reporting responsibilities) which, in the reasonable judgment of KIT, represents
an adverse change from its or his status, title, position or responsibilities;
the assignment to KIT or any KIT Employee of any duties or responsibilities
which, in the reasonable judgment of KIT, are inconsistent with his or its
status, title, position or responsibilities; or any removal of KIT or any KIT
Employee from or failure to reappoint or reelect it or him to any of such
offices or positions, except in connection with the termination of KIT’s
employment for Cause or other than for Good Reason; (ii) a reduction in the
KIT’s Base Compensation or benefits, or any failure to pay or award KIT any
compensation or benefits to which KIT is entitled within five (5) days of the
date due; and (iii) a Change of Control, as described in Article XII provided
that KIT shall not have the right to terminate this Agreement pursuant to the
foregoing clauses unless written notice specifying such breach shall have been
given to the Company and, in the case of breach which is capable of being cured,
the Company shall have failed to cure such breach within fifteen (15) days
after
its receipt of such notice.
13
11.3 For
purposes of this Agreement, a “Notice of Termination” shall mean a written
notice from the Company, or KIT, of termination of this Agreement which
indicates the specific termination provision in this Agreement relied upon,
if
any, and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of this Agreement under the provision
so indicated; provided that termination for Good Reason based on a Change of
Control shall be served only in accordance Article XII. A Notice of Termination
served by the Company shall specify the effective Termination Date.
11.4 For
purposes of this Agreement, “Termination Date” shall mean (i) in the case of
Good Reason, ten (10) days from the date the Notice of Termination is given
to
the Company, except for a Change in Control, as described in Article XII; (ii)
in the case of termination after the Expiration Date, the last day of services
rendered; and (iv) in all other cases, the date specified in the Notice of
Termination; provided, however, if this Agreement is terminated by the Company
for any reason except Cause, the date specified in the Notice of Termination
shall be at least thirty (30) days from the date the Notice of Termination
is
given to KIT.
14
11.5
Upon
termination of this Agreement on or after the Expiration Date for any reason
except Cause (and including termination by KIT for Good Reason), the Company
shall pay KIT, in addition to any other payments due hereunder, a cash severance
payment equal to the greater of (i) the total amount paid to KIT during the
preceding twelve (12) months, including Base Compensation and all bonuses,
or
(ii) the previous month’s monthly installment of Base Compensation multiplied by
twelve (12). In addition, fifty (50%) percent of all then unvested Options
and
Phantom Shares shall vest immediately. The above severance provisions shall
apply equally to any KIT Employee who has received cash or equity incentive
compensation. For purposes of computing the cash severance payment, Base
Compensation shall include any automatic increases to Base Compensation to
which
KIT or any KIT Employee, as the case may be, would have been entitled had this
Agreement not been terminated. Cash severance shall be paid within fifteen
(15)
days after the Termination Date.
11.6 Neither
KIT nor any KIT Employee, as the case may be, shall be required to mitigate
the
amount of any severance payment provided for in this Agreement by seeking or
obtaining employment.
ARTICLE
XII
EXTRAORDINARY
TRANSACTIONS
12.1 For
purposes of this Agreement, a “Change in Control” shall mean any of the
following events:
15
A.
An
acquisition (other than directly from the Company) of any classes of the voting
stock of the Company entitled to vote (the “Voting Securities”) by any “Person”
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)) immediately after
which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the 0000 Xxx) of fifty (50%) percent or more of the combined
voting power of the Company’s then outstanding Voting Securities; provided,
however, that in determining whether a Change in Control has occurred, Voting
Securities which are acquired in a “Non-Control Acquisition” (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in
Control. A “Non-Control Acquisition” shall mean an acquisition by (1) an
employee benefit plan (or a trust forming a part thereof) maintained by (x)
the
Company, or (y) any corporation or other Person of which a majority of its
voting power or its equity securities or equity interest is owned directly
or
indirectly by the Company (a “Subsidiary”), or (2) the Company or any
Subsidiary.
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
a
Person (the “Subject Person”) gained Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number
of
Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner
of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then
a
Change in Control shall occur.
16
B. Approval
by stockholders of the Company of: (i) A merger, consolidation or reorganization
involving the Company, unless: (1) the stockholders of the Company, immediately
before such merger, consolidation or reorganization, own, directly or indirectly
immediately following such merger, consolidation or reorganization, at least
fifty (50%) percent of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger or consolidation or
reorganization (the “Surviving Corporation”) in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization, and (2) no Person (other than the
Company, any Subsidiary, any employee benefit plan (or any trust forming a
part
thereof) maintained by the Company, the Surviving Corporation or any Subsidiary)
becomes Beneficial Owner of twenty (20%) percent or more of the combined voting
power of the Surviving Corporation’s then outstanding voting securities as a
result of such merger, consolidation or reorganization, a transaction described
in clauses (1) and (2) shall herein be referred to as a “Non-Control
Transaction”; or (ii) an agreement for the sale or other disposition of all or
substantially all of the assets of the Company, to any Person, other than a
transfer to a Subsidiary, in one transaction or a series of related
transactions; or (iii) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company.
12.2 Notwithstanding
anything contained in this Agreement to the contrary, if this Agreement is
terminated prior to a Change in Control and KIT reasonably demonstrates that
such termination (i) was at the request of a third-party who has indicated
an
intention or taken steps reasonably calculated to effect a Change in Control
(a
“Third Party”) or (ii) otherwise occurred in connection with, or in anticipation
of, a Change in Control, then for all purposes of this Agreement, the date
of a
Change in Control with respect to KIT shall mean the date immediately prior
to
the date of such termination of this Agreement.
17
12.3 In
the
event of a Change of Control as described herein, (i) KIT shall receive cash
compensation as described in Section 11.5 above, and (ii) the conditions to
the
vesting of any outstanding Options, Phantom Shares or other incentive awards
(including restricted stock, stock options and granted performance shares or
units (collectively, the “Awards”)) granted to KIT under any of the Company’s
benefit plans, or under any other incentive plan or arrangement, shall be
immediately deemed void and all such Awards shall be immediately and fully
vested and exercisable. Further, the Options and shall be deemed amended to
provide that in the event of termination after an event enumerated in this
Article XII, the options shall remain exercisable for the duration of their
original term.
ARTICLE
XIII
JURISDICTION
13.1 This
Agreement has been made in, and shall be interpreted according to the laws
of
the State of New York without any reference to the conflicts of laws rules
thereof. The parties hereto submit to the jurisdiction of the Courts of the
State of New York for the purpose of any action or proceeding which may be
brought to enforce the provisions of this Agreement. The foregoing
notwithstanding, KIT, at its option, may elect to make this Agreement subject
to
the exclusive jurisdiction of the United Arab Emirates.
18
ARTICLE
XIV
INDEMNIFICATION
14.1 The
Company hereby agrees to indemnify, defend, and hold harmless KIT, its officers,
directors, shareholders, agents, consultants, affiliates, successors and
assigns, the KIT Employees and all other KIT employees (collectively, the
“Indemnitees”), from and against any and all claims arising from or related to
KIT’s services to the Company, or any claim related to prior services performed
for JumpTV Inc., at any time asserted, at any place asserted, to the maximum
extent permitted by the Company’s Certificate of Incorporation, By-Laws, and the
Delaware General Corporation Law.
The
Company shall maintain such insurance as is necessary and reasonable to protect
KIT and the KIT Employees from any and all claims arising from or in connection
with KIT’s services to the Company during the service period and for a period of
five (5) years after the Termination Date for any reason. The provisions of
this
Section 14.1 are in addition to and not in lieu of any indemnification, defense
or other benefit to which KIT and the KIT Employees may be entitled by statute,
regulation, common law or otherwise. Notwithstanding anything to the contrary
herein, the Company will not, however, be responsible for any claims,
liabilities, losses, damages or expenses which result from any compromise or
settlement not approved by the Company or which are determined by a final
judgment of a court of competent jurisdiction to have resulted solely from
the
fraud, willful misconduct or gross negligence of the Indemnitees.
ARTICLE
XV
PRESS
RELEASE
15.1 Any
press
release by the Company relating to or made during the term of this Agreement
shall require KIT’s prior written consent, which consent may be given by email
and will not be unreasonably withheld.
19
ARTICLE
XVI
LEGAL
FEES
16.1 The
Company shall reimburse KIT forthwith for all reasonable legal fees and related
costs incurred in connection with the preparation, review, negotiation and
execution of this Agreement.
ARTICLE
XVII
SEVERABILITY
17.1 If
any
provision of this Agreement shall be held invalid and unenforceable, the
remainder of this Agreement shall remain in full force and effect. If any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall remain in full force and effect in all other
circumstances.
20
ARTICLE
XVIII
NOTICE
18.1 For
the
purposes of this Agreement, notices and all other communications provided for
in
the Agreement shall be in writing and shall be deemed to have been duly given
when (a) personally delivered or (b) sent by (i) a nationally recognized
overnight courier service or (ii) certified mail, return receipt requested,
postage prepaid and in each case addressed to the respective addresses as set
forth below or to any such other address as the party to receive the notice
shall advise by due notice given in accordance with this paragraph. All notices
and communications shall be deemed to have been received on (a) if delivered
by
personal service, the date of delivery thereof; (b) if delivered by a nationally
recognized overnight courier service, on the first business day following
deposit with such courier service; or (c) on the third (3rd)
business day after the mailing thereof via certified mail. Notwithstanding
the
foregoing, any notice of change of address shall be effective only upon receipt.
The
current addresses of the parties are as follows:
ROO
Group, Inc.
228
Eat
00xx
Xxxxxx,
0xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
KIT
Capital Limited
__________________
21
ARTICLE
XIX
BENEFIT
19.1 This
Agreement shall inure to, and shall be binding upon, the parties hereto, and
their respective successors and assigns.
ARTICLE
XX
WAIVER
20.1 The
waiver by either party of any breach or violation of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of construction and validity.
ARTICLE
XXI
ASSIGNMENT
21.1 This
Agreement may not be assigned, in whole or in part, by the Company or KIT
without the other party’s prior written consent. The foregoing notwithstanding,
KIT may assign all or any portion of this Agreement to an affiliate, and may
require the Company to assign all or any portion to the Dubai Subsidiary.
22
ARTICLE
XXII
ENTIRE
AGREEMENT
This
Agreement contains the entire agreement between the parties hereto. No change,
addition, or amendment shall be made hereto, except by written agreement signed
by the parties hereto or as otherwise provided herein.
ARTICLE
XXIII
NON-CONTRAVENTION
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will constitute a violation or default under
any term or provision of any
agreement or restriction of any kind or character to which KIT
is a
party to or by which
KIT is
bound.
[signature
page follows]
23
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement and affixed their hands and seals
the day and year first above written.
|
ROO
GROUP, INC.
By:
__/s/
Xxxxxx
Xxxxx
Name:
_Robert
Xxxxx
Title:
Chief
Executive
Officer
KIT
CAPITAL LIMITED
By:
__/s/
Kaleil Xxxxx
Xxxxxx
Name:
_Kaleil
Xxxxx
Tuzman
Title:
_Managing
Director
|
