EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (this "Agreement") is made and entered into
as
of
this
1st day of October 2005, by and between New Motion, Inc. a Delaware corporation
(the "Company")
and
Xxxxx
X. Xxxxx ("Executive").
1. Engagement
and Duties.
1.1
Upon
the terms and subject to the conditions set forth in this Agreement,
the
Company hereby engages and employs Executive as Senior Vice President of
Marketing & Licensing. Executive hereby accepts such engagement and
employment.
1.2
Executive will have access to certain confidential information and may,
during
the course of his employment, develop certain information which will be the
property of the
Company. Executive will be required to sign the Company's "Proprietary
Information and Assignment of Inventions Agreement" as a condition of his
employment under this Agreement.
1.3
Executive's duties and responsibilities shall be as follows: responsible for
the
development and expansion of the Company's licensed content library and
strategic placement
of such content on New Motion's mobile platform, subject to the supervision,
direction
and control of the Board of Directors (the "Board") of the Company. In addition,
Executive's
duties shall include those duties and services for the Company and its
affiliates as the Board
shall from time to time reasonably direct. Executive shall report directly
to
the Chief Executive
Officer of the Company.
1.4
Executive agrees to devote his primary business time, energies, skills,
efforts
and attention to his duties hereunder, and will not, without the prior written
consent of the Company, which consent will not be unreasonably withheld, render
any material services to any other
business concern. Executive will use his best efforts and abilities faithfully
and diligently to
promote the Company's business interests.
(a)
Company acknowledges and approves that Executive currently has a vested
interest
in another Corporation that maintains and is acquiring content from
international sources which
is
to be utilized in various media formats. From time to time Executive may chose
to hold director
and officer positions with the Corporation. Executive has made Company aware
of
these circumstances
and have agreed that this will not prevent Executive from performing his
services to Company.
Executive will perform his services for the Corporation so not to interfere
with
his services
to Company. Executive shall inform Company immediately of any potential
conflicts of interests
and shall resolve such potential conflicts in favor of the Company.
Executive
may perform his duties and obligations under this Agreement remotely for up
to
three days
per
week, so long as doing so does not interfere with his performance of such duties
and obligations
and the Executive complies with the Company's Telecommunications Policy. On
days
Executive
is not working remotely, he shall work from an office provided by the Company
in
Orange
County, California, or such other location in Los Angeles or Orange County,
California, as the
Board
may from time to time determine.
2. Term
of Employment. Executive's
employment pursuant to this Agreement shall commence
on August 25, 2005 ("Start Date") and shall terminate on the earliest to occur
of the following:
(a) the
close
of business on the second anniversary of the Start Date;
(b) the
death
of Executive;
(c)
delivery
to Executive of written notice of termination by the Company if Executive
shall suffer a "permanent disability," which for purposes of this Agreement
shall mean a
physical or mental disability which renders Executive, in the reasonable
judgment of the Board, unable
to
perform his duties and obligations under this Agreement for 90 days in any
12-month period;
(d)
notice to Executive of termination by the Company for Cause. For purposes
of this Agreement, Cause means: (ii) any material breach of any of the terms
of
this Agreement;
(ii) any act or omission knowingly undertaken or omitted by Executive with
the
intent
of
causing damage to the Company, its properties, assets or business, goodwill,
or
its stockholders, officers, directors or employees; (ii) commission of any
material act of dishonesty, fraud, misrepresentation, misappropriation,
embezzlement, or other act of moral turpitude; (iii) Executive's consistent
failure to perform his normal duties or any obligation under any provision
of
this Agreement, in either case, as directed by the Chief Executive Officer
and/or the Board; (iv) conviction
of, or pleading nolo
contendere to
(A)
any crime or offense involving monies or other property of the Company; (B)
any
felony offense; or (C) any crime of moral turpitude; or (v) the
chronic or habitual use or consumption of drugs or alcoholic beverages;
or
(e) notice
to
Executive of termination by the Company "without cause."
After
the
expiration of the Employment term under Section 2(a), if Executive continues
to
be employed
by the Company, such employment shall be terminable "at will" by either the
Company
or Executive and the terms and conditions of this Agreement shall continue
to
apply; provided,
however, that if the Company terminates Executive's "at will" employment without
Cause,
then the severance amount set forth in Section
3.1 payable
to Executive as a result of such termination shall be equal to one month's
pay
at Executive's then-current base salary, accrued vacation
and any Company approved holidays for which the Executive worked reimbursement
of
any
approved expenses incurred up through date of termination and such amount shall
be paid pursuant
to California law. Additionally, Executive shall be entitled to Commissions
as
described
in Section 3.3 of this Agreement for a period as agreed to in Exhibit A
Paragraph 2.f. which
provides Executive upon termination of its relationship with Company an one
percent (1%)
Commission Fee of Company's Gross Revenue for any license signed, content
secured or relationship developed where Executive introduces Company to Property
owner, Licensor or business partner.
In
the
event Executive is terminated for Cause pursuant to section 2(d), the
Executive shall only receive his base salary though the termination date and
shall not be entitled
to any additional compensation, including salary, or bonus, excluding
commissions. accrued
vacation, Company approved holidays for which the Executive worked.
Additionally, Executive shall be entitled to Commissions as described in Section
3.3 of this Agreement for a period as agreed to in Exhibit A Paragraph 2.f.
which provides Executive upon termination of its relationship with Company
an
one percent (1%) Commission Fee of Company's Gross Revenue for
any
license signed, content secured or relationship developed where Executive
introduces Company
to Property owner, Licensor or business partner.
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3.
Compensation; Executive Benefit Plans.
3.1
Base
Salary. Commencing
on the Start Date, the Company shall pay Executive
an annual base salary of $135,000.00. Executive's annual base salary will be
increased
to $160,000.00 on the first anniversary of the Start Date. Executive's base
salary shall be
payable in installments throughout the year in the same manner and at the same
times the Company pays base salaries to other executives of the Company. In
the
event that Executive's employment
is terminated, above (i.e., without cause), the Company shall continue to pay
Executive's
then-current base salary, Bonus described in Section 3.2, Commissions described
in Section 3.3, as severance pay for the balance of the initial term hereof,
and
Executive shall retain only those Options described in Section 3.4, below,
that
have vested prior to the effective date of such termination.
3.2
Bonuses.
(a) Executive
will also be eligible to receive a bonus, capped at $120,000 per year
(the
"Bonus") at the times and in the amounts set forth below:
The
Bonus
will be paid in cash pursuant to the schedule below and will accrue on each
monthly
anniversary of the Start Date for a period of twenty four months (the "Bonus
Period"). At
the
end of each calendar month following the Start Date, Executive shall accrue
a
bonus of 1%
of the
Company's then completed month's net profits, as determined in accordance with
generally
accepted accounting principals ("GAAP"). The accrued bonus for each monthly
period
shall be payable under this paragraph within 30 days after the end of each
calendar quarter in the Bonus Period and upon completion of the un-audited
interim financial statements of the Company
(or its successor) for each such calendar quarter for which a Bonus is payable
hereunder
(the "Bonus Payment Date"). The Bonus for any month in the Bonus Period which
is
less than a full month, shall be prorated for the applicable month. All bonus
calculations shall be made by the Company, whose determination shall be final
and binding on Executive and the Company absent manifest error.
In
the
event of an adjustment to the financial statements used above, occasioned by
results
of the actual year end audit, the Executive and the Company shall make an
adjusting payment
(in cash, or stock if the stock election has been made) to one another, as
necessary, to reflect
any change to the financial information used to calculate the bonus payable
hereunder. Any
under
payment of Bonuses will be paid to Executive within 30 days of the discovered
error, however these adjustments will not effect the maximum allowable under
Section 3.2. Any over payment
of Bonuses to Executive will be reflected in next bonus period, however these
adjustments
will not effect the maximum as allowed under Section 3.2. Any overpayment of
a
bonus will be adjusted through the future bonus payment.
(b) Executive
will also receive a bonus equal to 1% of the net profits of the Company's
licensing division, as determined in accordance with generally accepted
accounting principals
("GAAP"). The accrued bonus for each monthly period shall be payable under
this
paragraph within 30 days after the end of each calendar quarter and upon
completion of the un-audited
interim financial statements of the Company (or its successor) for each such
calendar quarter
for which a bonus is payable hereunder (the "Bonus Payment Date"). The bonus
for
any month which is less than a full month, shall be prorated for the applicable
month. All bonus calculations shall be made by the Company's outside accountants
whose determination shall be final and binding on Executive and the Company
absent manifest error.
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In
the
event of an adjustment to the financial statements used above, occasioned by
results
of the actual year end audit, the Executive and the Company shall make an
adjusting payment
(in cash, or stock if the stock election has been made) to one another, as
necessary, to reflect
any change to the financial information used to calculate the bonus payable
hereunder. Any
under
payment of Bonuses will be paid to Executive within 30 days of the discovered
error, however these adjustments will not effect the maximum allowable under
Section 3.2. Any over payment
of Bonuses to Executive will be reflected in next bonus period, however these
adjustments
will not effect the maximum as allowed under Section 3.2.
3.3
Commissions.
Attached
as Exhibit A to this Agreement is a copy of Executive's
Consulting Agreement with the Company, dated April 20, 2005 ("Consulting
Agreement").
Executive will receive commissions earned as a result of services performed
under
the
Consulting Agreement according to the terms and at the rates set forth in
section 2 of the
Consulting Agreement ("Residual Commissions"). A complete list of the
relationships, deals and/or business opportunities for which Executive will
receive Residual Commissions is set forth on Exhibit B to this
Agreement.
3.4
Stock
Options. Subject
to approval by the Company's Board of Directors, you will be granted an option
to purchase up to 60,000 shares of NMI's Common Stock (the "Options")
at an exercise valued at the fair market value of the stock as of the Value
Determination Date
(defined below). For purposes hereof, if the Company is a private company,
the
fair market value of the stock as of the last day in the applicable quarterly
period (the "Value Determination Date")
shall be determined in good faith by the Board of Directors of the Company.
If
the Company
is public at that time, the fair market value of the stock on the Value
Determination Date shall be the average closing price of the stock on the market
on which it is then being traded for the 20
trading days immediately preceding the Value Determination Date. The Options
will be governed
by and granted pursuant to a separate Stock Option Agreement. The Options will
be subject
to vesting so long as you continue to be employed by the Company, according
to
the vesting schedule
set forth in the Stock Option Agreement. Accelerated Vesting: Company agrees
that all 60,000
shares (or the remaining unvested shares at the time shall or any subsequent
grant of shares) shall vest automatically for Executive, should one of the
following events take place, (1) a "Change of
Control" For purposes of this letter agreement, a "Change of Control" shall
be
deemed to have occurred
in the event (i) any person (as such term is used in Sections 13(d) and 14(d)
of
the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or group of such
"persons", without
the consent of the Company's Board of Directors, is or becomes a "beneficial
owner" (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of
the
Company representing
fifty-one percent (51%) or more of the combined voting power of the Company's
then outstanding securities; (ii) of a merger, consolidation or stock sale
which
results in the holders of the Company's
capital stock immediately prior to such merger, consolidation or stock sale
owning less than
fifty percent (50%) of the voting equity of the Company's capital stock
immediately after such merger,
consolidation or stock sale; or (iii) of the sale or transfer of all or
substantially all of the assets
of
the Company.
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3.5
Vacation.
You
will
receive two weeks paid vacation, one week will vest immediately upon the Start
Date and you shall accrue the other week. During the second year of your
employment, you will receive three weeks paid vacation which you shall accrue
during that year. All vacation shall be paid and earned in accordance with
the
Company's vacation policy.
3.6
Laptop/Mobile
Telephone-PDA. The
Company will provide Executive with
a
laptop computer and a PDA for business use. The laptop and Mobile Telephone-PDA
will
remain the property of the Company and must be returned upon the termination
of
Executive's
employment with the Company.
3.7
Other
Benefits. During
the term of his employment hereunder, Executive shall
be
eligible to participate in all operative employee benefit and welfare plans
of
the Company
then in effect from time to time and in respect of which all executives of
the
Company generally
are entitled to participate ("Company Executive Benefit Plans"), including,
to
the extent
then in effect, auto allowances, group life, medical, disability and other
insurance plans, all
on
the same basis applicable to employees of the Company whose level of management
and authority is comparable to that of Executive.
3.8
The
Company reserves the right to modify, suspend, or discontinue any and
all
of the above-mentioned plans, practices, policies and programs at any time
as
long as such
action is taken generally with respect to other similarly situated executives
of
the Company.
3.9
The
Company may deduct from any compensation payable to Executive the minimum
amounts sufficient to cover applicable federal, state and/or local income tax
withholding,
old-age and survivors' and other social security payments, state disability
and
other insurance
premiums and payments. This shall also apply to bonus payments where Executive
elects
to
receive stock instead of cash, except that Executive shall provide the funds
necessary for the Company to comply with its withholding obligations. This
may
be accomplished either by
depositing such funds with the Company or the Company is authorized to offset
the amounts required for withholding from Executive's Base Salary.
4.
Expenses.
4.1
Generally.
Executive
shall be entitled to reimbursement from the Company
for the reasonable costs and expenses which he incurs in connection with the
performance
of his duties and obligations under this Agreement in a manner consistent with
the Company's practices and policies as adopted or approved from time to time
by
the Board for executive officers generally.
4.2
Travel.
All
travel requests must be approved in advance by the Chief Executive
Officer. The Company will reimburse Executive for expenses reasonably incurred
by him
for
business travel, including transportation, lodging and reasonable entertainment
expenses, pursuant to the Company's Travel Policy.
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4.3
Vehicle.
The
Company will reimburse Executive for automobile expenses for
one
vehicle, including lease or finance payments, gasoline, insurance, maintenance,
repairs and
all
other reasonable costs associated with the vehicle, up to a maximum
reimbursement of $800
per
month.
4.4
Mobile
Telephone/PDA. The
Company will reimburse Executive for the monthly
fees associated with a mobile telephone and Blackberry (or equivalent) service,
up to a maximum of $300 per month.
5.
Dispute
Resolution.
5.1
Agreement
to Arbitrate. Executive
and the Company agree to arbitrate before
a
neutral arbitrator any and all disputes or claims arising from or relating
to
Executive's recruitment
to or employment with the Company, or the termination of that employment,
including
claims against any current or former agent or employee of the Company, whether
the disputes or claims arise in tort, contract, or pursuant to a statute,
regulation, or ordinance now in existence or which may in the future be enacted
or recognized, including, but not limited to, the following claims:
claims
for fraud, promissory estoppel, fraudulent inducement of contract or
breach
of
contract or contractual obligation, whether such alleged contract or obligation
be oral, written, or express or implied by fact or law;
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claims
for wrongful termination of employment, violation of public policy
and
constructive
discharge, infliction of emotional distress, misrepresentation,
interference
with contract or prospective economic advantage, defamation, unfair
business
practices, and any other tort or tort-like causes of action relating
to or
arising
from the employment relationship or the formation or termination
thereof;
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claims
of discrimination, harassment, or retaliation under any and all federal,
state,
or municipal statutes, regulations, or ordinances that prohibit
discrimination, harassment,
or retaliation in employment, as well as claims for violation of
any other
federal, state, or municipal statute, regulation, or ordinance, except
as
set forth
herein; and
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claims
for non-payment or incorrect payment of wages, commissions, bonuses,
severance,
employee fringe benefits, stock options and the like, whether such
claims
be pursuant to alleged express or implied contract or obligation,
equity,
the California Labor Code, the Fair Labor Standards Act, the Employee
Retirement Income Securities Act, and any other federal, state, or
municipal laws concerning wages, compensation or employee
benefits.
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5.2
Claims
Excluded from Arbitration. The
Company and Executive understand
and agree that arbitration of the disputes and claims covered by this Agreement
shall be
the
sole and exclusive mechanism for resolving any and all existing and future
disputes or claims
arising out of Executive's recruitment to or employment with the Company or
the
termination
thereof. The Company and Executive further understand and agree that the
following
disputes and claims are not covered by this Agreement and shall therefore be
resolved as permitted or required by the law then in effect:
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claims
for workers' compensation benefits, unemployment insurance, or state
or
federal disability insurance;
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claims
for injunctive and/or other equitable relief;
and
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any
other dispute or claim that has been expressly excluded from arbitration
by law.
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Also,
nothing in this section should be interpreted as restricting or prohibiting
Executive from filing a charge or complaint with a federal, state, or local
administrative agency charged with investigating
and/or prosecuting complaints under any applicable federal, state or municipal
law or
regulation. Any dispute or claim that is not resolved through the federal,
state, or local agency must be submitted to arbitration in accordance with
this
section.
5.3
Waiver
of Court or Jury Trial. Executive
and the Company understand and
agree
that the arbitration of disputes and claims under this section shall be instead
of a trial before a court or jury or a hearing before a government agency.
Executive and the Company understand and agree that, by signing this Agreement,
Executive and the Company are expressly waiving
any and all rights to a trial before a court or jury or before a government
agency regarding
any disputes and claims which we now have or which we may in the future have
that are
subject to arbitration under this section.
5.4
Arbitration
Procedures. The
arbitrator shall issue a written award that sets forth the essential findings
and conclusions on which the award is based. The arbitrator shall have
the
authority to award any relief authorized by law in connection with the asserted
claims or disputes.
The arbitrator's award shall be final and binding on both the Company and
Executive and
it
shall provide the exclusive remedy(ies) for resolving any and all disputes
and
claims subject
to arbitration under this section. The arbitrator's award shall be subject
to
correction, confirmation,
or vacation, as provided by California Code of Civil Procedure Section 1285.8
et
seq
and
any applicable California case law setting forth the standard of judicial review
of arbitration
awards.
The
arbitration shall be conducted in accordance with the National Rules for the
Resolution
of Employment Disputes of the American Arbitration Association; provided,
however,
that the Arbitrator shall allow the discovery authorized by California Code
of
Civil Procedure section 1283.05 or any other discovery required by California
law. Also, to the extent that any of the National Rules for the Resolution
of
Employment Disputes or anything in this Agreement conflicts with any arbitration
procedures required by California law, the arbitration procedures required
by
California law shall govern.
7
5.5
Place
of Arbitration. The
arbitration shall take place in Orange County, California,
or, at the Executive's option, the county in which the
Executive
resides
at the time the arbitrable
dispute(s) or claim(s) arose, or in any county in which venue would have been
proper if
Executive were free to bring the dispute(s) or claim(s) in court.
5.6
Governing
Law. This
Agreement and its validity, construction and performance
shall be governed by the laws of the State of California, without reference
to
rules relating
to conflicts of law. Any dispute(s) and claim(s) to be arbitrated under this
section shall be
governed by the laws of the State of California, without reference to rules
relating to conflicts of law.
5.7
Costs
of Arbitration. The
Company will bear the arbitrator's fee and any other
type of expense or cost that the employee would not be required to bear if
he or
she were free
to
bring the dispute(s) or claim(s) in court as well as any other expense or cost
that is unique to arbitration. The Company and Executive shall each bear their
own attorneys' fees incurred in connection with the arbitration, and the
arbitrator will not have authority to award attorneys' fees unless a statute
or
contract at issue in the dispute authorizes the award of attorneys' fees to
the
prevailing
party, in which case the arbitrator shall have the authority to make an award
of
attorneys'
fees as required or permitted by applicable law. If there is a dispute as to
whether the Company
or Executive is the prevailing party in the arbitration, the arbitrator will
decide this issue.
5.8
Knowing
Waiver. Executive
has been advised to consult with an attorney of
his
our own choosing before signing this Agreement, and has had an opportunity
to do
so. Executive agrees that he has read this section carefully and understands
that by signing this Agreement,
he is waiving all rights to a trial or hearing before a court or jury of any
and
all disputes
and claims regarding Executive's employment with the Company or the recruitment
to or
termination thereof (except as otherwise stated herein).
6.
Miscellaneous,
6.1
Notices.
All
notices, requests and other communications (collectively, "Notices")
given pursuant to this Agreement shall be in writing, and shall be delivered
by
personal service or by United States first class, registered or certified mail
(return receipt requested),
postage prepaid, addressed to the party at the address set forth
below:
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If
to Company:
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New
Motion, Inc
42
Corporate Park Suite 250
Irvine
CA 00000
000-000-0000
(phone)
000-000-0000
(fax)
Attn:
Board of Directors
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If
to Executive:
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Xxxxx
X. Xxxxx
00000
Xxxxxxx Xxxxxx, #000
Xxx
Xxxxxxx, XX 00000
Tel:
(000) 000-0000
Fax
(000) 000-0000
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Any
Notice shall be deemed duly given when received by the addressee thereof,
provided that any
Notice sent by registered or certified mail shall be deemed to have been duly
given three days
from
date of deposit in the United States mails, unless sooner received. Either
party
may from
time
to time change its address for further Notices hereunder by giving notice to
the
other party in the manner prescribed in this section.
6.2
Entire
Agreement. This
Agreement contains the sole and entire Agreement
and understanding of the parties with respect to the entire subject matter
of
this Agreement, and any and all prior discussions, negotiations, commitments
and
understandings, whether
oral or otherwise, related to the subject matter of this Agreement are hereby
merged herein.
No representations, oral or otherwise, express or implied, other than those
contained in this
Agreement have been relied upon by any party to this Agreement.
6.3
Severability.
The
Company and Executive believe the covenants contained
in this Agreement are reasonable and fair in all respects, and are necessary
to
protect the
interests of the Company and Executive. However, in case any one or more of
the
provisions or parts of a provision contained in this Agreement shall, for any
reason, be held to be invalid, illegal
or unenforceable in any respect in any jurisdiction, such invalidity, illegality
or unenforceability
shall not affect any other provision or part of a provision of this Agreement
or
any
other
jurisdiction, but this Agreement shall be reformed and construed in any such
jurisdiction
as if such invalid, illegal or unenforceable provision or part of a provision
had never been
contained herein and such provision or part shall be reformed so that it would
be valid, legal
and
enforceable to the maximum extent permitted in such jurisdiction.
6.4
Neutral
Interpretation. This
Agreement constitutes the product of the negotiation
of the parties hereto and the enforcement hereof shall be interpreted in a
neutral manner,
and not more strongly for or against either party based upon the source of
the
draftsmanship
hereof.
6.5
Captions.
The
various captions of this Agreement are for reference only and
shall
not be considered or referred to in resolving questions of interpretation of
this Agreement.
6.6
Indemnification.
(a)
The
Company shall provide indemnification for its directors and officers
(which
shall include Executive) to the maximum extent allowed by the Company's Articles
of Incorporation,
by-laws or Section 145 of the Delaware General Corporation Law. Company
shall also
indemnify Executive for any claims relating to the executive acting within
the
course and scope of
employment pursuant to California Labor Code 2802.
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6.7
Business
Day. If
the
last day permissible for delivery of any Notice under any
provision of this Agreement, or for the performance of any obligation under
this
Agreement, shall
be
other than a business day, such last day for such Notice or performance shall
be
extended
to the next following business day (provided, however, under no circumstances
shall this
provision be construed to extend the date of termination of this
Agreement).
6.8
Miscellaneous
This
Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The section headings contained in this
Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. This
Agreement embodies the entire Agreement and understanding of the parties hereto
in respect
of the subject matter contained herein and may not be modified orally, but
only
by a writing
subscribed by the party charged therewith. There are no restrictions, promises,
representations,
warranties, covenants or undertakings, other than those expressly set forth
or
referred to herein. This Agreement supersedes all prior Agreements and
understandings (whether oral or written) between the parties with respect to
such subject matter.
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In
witness whereof, the parties have executed this Agreement as of the date first
set forth above.
| Company: | Executive: | |
| New Motion, Inc. | ||
| By: | /s/ Xxxxx Xxxxxx | /s/ Xxxxx X. Xxxxx |
| Xxxxx Xxxxxx, Chief Executive Officer | Xxxxx X. Xxxxx | |
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EXHIBIT
A
CONSULTING
AGREEMENT
|
Xxxxx
X. Xxxxx
|
00000
Xxxxxxx Xxxxxx #000
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Xxx
Xxxxxxx, XX 00000
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310)
000-0000 tel. / 310) 000-0000 fax
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xxxxx0000xxxxx.xxx
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April
20,
2005
Mr.
Xxxxx
Xxxxxx
New
Motion, Inc. 00
Xxxxxxxxx
Xxxx Xxxxx
000
Xxxxxx,
Xxxxxxxxxx 00000
Re:
CONSULTING PROJECT
Dear
Xx.
Xxxxxx:
This
letter confirms an agreement whereby Xxxxx X. Xxxxx ("Maidy") is engaged by
New
Motion,
Inc. ("NMI") to provide licensing, marketing and new business services to NMI.
This confirmation is made pursuant to the following terms and
conditions:
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1.
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Maidy's
authority shall include:
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a.
Consultations.
Maidy
shall make himself available to consult and advise
NMI on any matters of importance concerning the business affairs
of NMI. Maidy, among other services that may be requested, will
review, evaluate and assist NMI in the procurement of content and business
development. A detailed listing, although not all-inclusive, is attached
as Appendix "A" disclosing duties, responsibilities and fees of
Maidy
as part of this Agreement. Maidy is not considered to be an employee of NMI
for
the term of this engagement.
|
2.
|
Maidy's
retention by NMI is effective as of May 1, 2005 and shall be in effect
until
July 31, 2005. As consideration for the advisory services to be performed
by Maidy,
NMI will pay a Consulting Fee based on fees outlined in Appendix
"A"
and
a Commission Fee as outlined below in sections "2a - 2f". The first
Consulting
Fee payment will be due on the date of this Agreement and any other
payments due thereafter shall be due no later than the 10" of each
month
during the
Term of this Agreement. At the conclusion of the assignment as outlined
in
Appendix
"A", NMI shall continue to pay Maidy any Commission Fees for as
long
as NMI continues to benefit and generate revenues from any relationships,
deals
or business opportunities that Maidy initiated on behalf of NMI.
Should
NMI
wish to engage Maidy in any additional consulting assignment(s) and/or
extend
the Term of this Agreement, Maidy and NMI will negotiate in good
faith.
Maidy shall earn a Commission Fee based on the Gross Revenue generated
from each
relationship. Such commission shall be as follows and shall be in
effect
for as
long as NMI has a relationship with the respective business
partner(s):
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12
|
a.
|
Two
percent (2%) of the first $500,000 of NMI's monthly Gross Revenue
on any license signed, content secured or relationship developed
where Maidy introduces NMI to property owner, Licensor or
business partner.
|
|
b.
|
One
and three quarters percent (1.75%) on the next $250,000 of NMI's
monthly
Gross Revenue on any license signed, content secured or relationship
developed where Maidy introduces NMI to property owner,
Licensor or business partner.
|
|
c.
|
One
and a half percent (1.5%) on the next $250,000 of NMI's monthly Gross
Revenue on any license signed, content secured or relationship
developed
where Maidy introduces NMI to property owner, Licensor or
business partner.
|
|
d.
|
One
and a quarter percent (1.25%) on the next $250,000 of NMI's monthly
Gross Revenue on any license signed, content secured or relationship
developed where Maidy introduces NMI to property owner,
Licensor or business partner.
|
|
e.
|
One
percent (1%) on any amount thereafter generated of NMI's monthly
Gross Revenue on any license signed, content secured or relationship
developed where Maidy introduces NMI to property owner,
Licensor or business partner.
|
|
f.
|
In
the event NMI and Maidy terminate their relationship, Maidy shall
receive
a Commission Fee of One percent (1%) of NMI's Gross Revenue
for any license signed, content secured or relationship developed
where Maidy introduces NMI to property owner, Licensor or
business partner.
|
|
3.
|
In
addition to the fees to be paid in Section 2 above, NMI agrees to
reimburse Maidy
for all reasonable out-of-pocket expenses incurred in connection
with the
engagement. Such reimbursement will be due and payable upon presentation
of invoice.
NMI will approve all material out-of-pocket expenses incurred by
Maidy
in
advance.
|
|
4.
|
NMI
agrees to supply, in a timely manner, Maidy with such information
as the
latter requests in order for Maidy to perform his responsibilities
with
respect to this
Agreement. NMI shall give Maidy discretionary authority to disclose
to
potential
business partners such information about NMI as is customary in such
endeavors.
Said partners, where appropriate, will execute a Confidentiality
Agreement.
|
13
NMI
shall
indemnify, defend and hold harmless Maidy from and against any and all
damages, liabilities, costs and expenses (including reasonable attorney's fees)
incurred in any action arising out of or in connection with negligence, willful
misconduct, or intellectual property right infringement by NMI.
|
6.
|
You
represent and warrant that you are duly authorized to enter into
this
Agreement on
behalf of NMI. This Agreement shall be binding on your successors
and
permitted
assigns.
|
|
7.
|
This
Agreement shall be governed by and construed and enforced in accordance
with
the laws of the State of California, without regard to its choice
of law
provisions.
In the event that a dispute arises out of this agreement such dispute
shall
be settled by binding arbitration in accordance with the rules of
the
American
Arbitration Association and the prevailing party shall be awarded
reasonable
attorneys' fee.
|
Please
indicate NMI's acceptance of the terms of this Agreement by signing below and
returning same to me.
Very
truly yours,
_______________________
Xxxxx
X.
Xxxxx
ACCEPTED
AND ACKNOWLEDGED:
NEW
MOTION, INC.
By:______________________
Print
Name: _________________________
Title:______________________
Print
Title_________________________
14
Appendix
A
Duties
and responsibilities regarding the engagement of Maidy, re: Section
1.a:
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Item
|
Fee
|
|||
|
Monthly
Consulting Fee — Licensing /
Content
Acquisition
|
$
|
2,000
|
||
|
Monthly
Consulting Fee — Marketing (20 hrs.)
|
$
|
3,000
|
||
|
TOTALS:
|
$
|
5,000
|
||
15
EXHIBIT
B
RESIDUAL
COMMISSION SCHEDULE
1. Distributive
Networks, LLC
2. NASCAR
3. Sony
Pictures Entertainment / Sony Pictures Digital Entertainment
4. Universal
Music Group
5. The
Xxxx
Disney Company / Xxxx Disney Internet Group
16
