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Exhibit 10.43
CONSULTING AGREEMENT
AGREEMENT dated as of October 5, 1999, between ▇▇▇▇ ▇▇▇
MEDIA, INC., a Colorado corporation ("Company"), and PARAVERSAL,
INC. ("Consultant").
Company currently is engaged in the business of deploying the
global brand, intellectual property, development capabilities and goodwill of
comic book publisher ▇▇▇▇ ▇▇▇ to the Internet, as well as other new media and
traditional media platforms, and the commercial exploitation of such content
through e-commerce, product and merchandise licensing and sales, online
publishing, gaming, distance learning, financial services, sponsorships,
co-branding, advertising, product placement and endorsements. Consultant is
experienced in structuring corporate partnering relationships and strategic
alliances, and coordinating public relations efforts, through services rendered
by ▇▇▇▇▇ ▇. ▇▇▇▇ (being hereinafter sometimes referred to, collectively, as
"Consultant"), who is a co-founder of Company.
Company desires to retain the experience, skills, abilities,
background and knowledge of the Consultant, and the Consultant is willing to
accept such engagement, in each case, for the purposes and on the terms and
conditions described in this Agreement.
Accordingly, the Company and the Consultant hereby agree as
follows:
I. TERM
The term of the Consultant's engagement under this Agreement
shall be for a period of seven (7) years, commencing as of October 1, 1999,
unless earlier terminated as provided in Article IV hereof; and thereafter, this
Agreement shall be renewed for two (2) additional, successive three (3) year
periods unless either party gives notice of its desire not to renew this
Agreement to the other party not more than 180 days and not less than 60 days
prior to the expiration of the initial or the then current renewal term, as the
case may be (the "Consulting Period").
II. ENGAGEMENT; DUTIES AND ACCEPTANCE
SECTION 2.01. Engagement. Company hereby engages the Consultant
to provide strategic business development services, including structuring of
corporate partnering relationships and strategic alliances; provide
marketing/creative direction input; coordinate the Company's public relations
efforts, including the positioning of the Company and Mr. ▇▇▇▇ ▇▇▇; schedule and
develop strategy for Mr. ▇▇▇▇ ▇▇▇'▇ brand/profile, including supervision of Mr.
▇▇▇▇ ▇▇▇'▇ personal appearances and accompany Mr. ▇▇▇▇ ▇▇▇ to such appearances;
and to serve in such other capacity or capacities as the Company may from time
to time prescribe, subject always to the discretion of the Company's Board of
Directors. The Consultant shall render such services to the Company and the
promotion of its interests as the Consultant and the Company
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shall mutually determine. Unless the parties otherwise agree in writing, the
Consultant shall, during the term of this Agreement, perform the services
required under this Agreement at the Company's principal executive offices,
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
Notwithstanding the foregoing, the Company and the Consultant shall mutually
agree as to the travel requirements related to the services to be performed by
the Consultant hereunder. The Consultant shall report to the Chairman of the
Company and to the Company's Board of Directors.
The Consultant's expenditure of reasonable amounts of time for
other business pursuits, personal business, charitable or professional
activities shall not be deemed a breach of his undertaking to provide the
required services hereunder, subject always to the provisions of Section 5.02
hereof, provided that such activities do not interfere materially with the
Consultant's ability to render such services hereunder.
SECTION 2.02. Acceptance of Engagement by Consultant. The
Consultant accepts such engagement and shall render the services required by
this Agreement to be rendered by ▇▇▇▇▇ ▇. ▇▇▇▇, a co-founder of the Company. The
Consultant hereby agrees to execute and deliver the Company's "Confidentiality
and Invention Assignment Agreement," in the form attached hereto. The terms of
that agreement require the Consultant to refrain for a period of time after
engagement from competing with the Company or using or disclosing the Company's
Confidential Information (as defined in the agreement) or any confidential
information received during its prior engagements in any manner which might be
detrimental to or conflict with the business interests of the Company.
III. CONSULTANT'S COMPENSATION
SECTION 3.01. Base Compensation.
(a) Salary. As compensation for all services to be rendered
pursuant to this Agreement, the Company shall pay the Consultant and the
Consultant shall accept, initial monthly compensation of Sixteen Thousand Five
Hundred Dollars ($16,500), for the period commencing October 1, 1999, subject to
adjustment as described below (collectively, the "Salary"). Coincident with the
receipt by the Company of equity financing in an amount not less than Five
Million Dollars ($5,000,000), the Salary payable by the Company to Consultant
shall automatically and without any further act on the part of Company be
increased to monthly compensation of Twenty Thousand Dollars ($20,000).
Coincident with the receipt by the Company of additional equity financing in an
amount not less than an additional Five Million Dollars ($5,000,000), the Salary
payable by the Company to Consultant shall automatically and without any further
act on the part of Company be increased to monthly compensation of Twenty-Five
Thousand Dollars ($25,000). The Salary shall be payable in accordance with the
Company's standard payroll policies, but not less frequently than monthly.
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(b) Review. During the term of this Agreement (and as the same
may be renewed or extended), the salary described in Section 3.01(a) hereof
shall be reviewed by the Board of Directors of the Company and may be adjusted
(but in no event to an amount less than the salary then in effect), if the Board
of Directors of the Company, in its sole discretion, determines that such
adjustment is warranted.
SECTION 3.02. Bonus. In addition to the salary, the Consultant
shall be entitled to an annual bonus (the "Bonus") in accordance with the terms
and provisions of the executive bonus program to be mutually agreed upon by the
Consultant and the Company.
SECTION 3.03. Deferred Compensation. Company shall pay Consultant
the sum of One Hundred Seventy-Five Thousand Dollars ($175,000) for services
rendered since December 1998 in two installments at such times as mutually
agreed upon by Company and Consultant. Said services include, without
limitation, (i) supervising negotiations with Marvel Enterprises, Inc. enabling
Mr. ▇▇▇▇ ▇▇▇ to acquire all rights to his name, brand and likeness for
competitive use; (ii) securing the assignment by Mr. ▇▇▇▇ ▇▇▇ in favor of the
Company to all such rights and all rights to ▇▇. ▇▇▇'▇ future creations; (iii)
assisting Mr. ▇▇▇▇ ▇▇▇ in the development of Company's first Super-Hero
franchise by introducing basic computer beta tester game and alien invasion
through Internet story concept, global Super Hero team strategy for creating
local and global franchise with brand presence and support in key global market
region; (iv) identifying and negotiating relationships with Organic, Inc., Next
Planet Over, Warner/Acme City, IBM (production studio sponsorship relationship),
Pulse Network, Championship Marketing Group, professional relationships with
public relations firms (MPRM, ▇▇▇▇▇▇/Helper Impact, Hill & ▇▇▇▇▇▇▇▇), and legal
counsel (including without limitation, Ziffren, Brittenham, Branca & ▇▇▇▇▇▇▇,
LLP); (v) identifying and associating the initial members of the Company's Board
of Directors; and (vi) identifying and securing an investment vehicle for the
Company's emergence as a public company.
SECTION 3.04. Stock Options. Company and Consultant acknowledge
and agree that Consultant (or its designee) has been granted options to purchase
five hundred thousand (500,000) shares of the Company's Common Stock pursuant to
that certain written compensatory agreement dated as of October 5, 1999. In
addition thereto, Company shall grant to Consultant, in arrears, upon each
anniversary date of the Consultant's engagement hereunder, an additional two
hundred thousand (200,000) shares of the Company's Common Stock at a price equal
to 110% of the closing bid price of the Company's Common Stock on its Principal
Market determined as of the date of each such grant. "Principal Market" means
the Nasdaq National Market System, the Nasdaq SmallCap Market or the OTC
Electronic Bulletin Board as appropriate. Consultant shall be entitled to such
additional stock options as may be granted to it under any Company stock option
plan(s) from time to time in effect at the Company.
SECTION 3.05. Credits. The Company shall cause ▇▇▇▇▇ ▇. ▇▇▇▇ to
be listed in all corporate histories, directories and publications as Co-Founder
of the Company with
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Mr. ▇▇▇▇ ▇▇▇; list ▇▇▇▇▇ ▇. ▇▇▇▇ as the Co-Executive Producer with Mr. ▇▇▇▇ ▇▇▇
on all Company productions; with respect to The 7th Portal, issue a credit as
follows: The 7th Portal, Based on a Concept by ▇▇▇▇▇ ▇. ▇▇▇▇; and with respect
to other Company productions, list credits for ▇▇▇▇▇ ▇. ▇▇▇▇ based on activities
related to each such production. Such credits shall survive in perpetuity and
subsequent to the termination and/or expiration of this Agreement.
SECTION 3.06. Participation in Employee Benefit Plans. Company
shall make available to the Consultant the Company benefit program currently in
effect or as may be established from time to time by the Company's Board of
Directors for senior executives, including without limitation, any incentive
compensation plans or group benefit plans.
SECTION 3.07. Reimbursement of Expenses. The Consultant is
authorized to incur reasonable expenses in connection with the business of the
Company, including expenses for entertainment, first class business travel with
sedan limousine and stay in deluxe hotels, and similar items. The Company shall
provide Consultant with a Company credit card and reimburse the Consultant for
all such expenses.
SECTION 3.08. Other Compensation. The Consultant shall receive
such other compensation as may from time to time be granted to the Consultant by
the Company's Board of Directors.
SECTION 3.09. Office and Support Personnel. The Company shall
provide the Consultant with an executive office at the Company's principal
executive offices and support personnel, including without limitation, an
executive assistant, and other facilities and services, in scope and amount
substantially similar to those provided to Mr. ▇▇▇▇ ▇▇▇.
IV. TERMINATION
SECTION 4.01. Termination by Consultant Upon Notice. The
Consultant may terminate this Agreement, with or without cause, effective upon
delivery of ninety (90) days' written notice of termination to the Company to
such effect.
SECTION 4.02. Termination by Company for Cause. The Company may,
at any time, terminate this Agreement, for Cause. "Cause" means: (a) willful and
repeated failure to comply with the lawful directions of the Board of Directors;
(b) gross negligence or willful misconduct in the performance of Consultant's
duties to the Company; or (c) conviction of any act of fraud against, or
misappropriation of material property belonging to the Company, conviction of
any criminal statute constituting a misdemeanor involving moral turpitude or
conviction of a felony, chronic alcoholism or drug addiction.
Upon termination pursuant to the provisions of this Section, the Consultant
would be entitled to receive only such compensation accrued and unpaid as of the
termination date.
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SECTION 4.03. Termination for Death and Disability. This
Agreement shall be terminated effective immediately and automatically, upon the
death or permanent disability of the Consultant. For purposes of this
subsection, "permanent disability" shall be deemed to have occurred if the
Consultant is unable by reason of illness or physical or mental disability to
perform the services required under this Agreement for a period aggregating 180
days within any period of 12 consecutive months during the Consulting Period.
SECTION 4.04. Termination Other Than for Cause. If the Consultant
is terminated for any reason other than as set forth in Sections 4.02 and 4.03
hereof, the Consultant would be entitled to receive the following compensation
and benefits:
(a) A lump sum payment of One Million Dollars ($1,000,000), which
shall be deemed liquidated damages; and
(b) The Company would maintain in full force and effect the
Consultant's group benefit plans or provide the Consultant with alternative
substantially equivalent coverage for the greater of (i) two years, and (ii) the
unexpired term of this Agreement.
SECTION 4.06. Effect of Termination. Termination of this
Agreement shall not release or discharge either party hereto from any
obligation, debt or liability which may previously have occurred and remains to
be performed upon the date of termination. In addition, the provisions of
Article V of this Agreement shall survive such termination or expiration of the
term of this Agreement.
V. OBLIGATIONS OF CONSULTANT
SECTION 5.01. Acceptance of "Confidentiality and Invention
Assignment Agreement". Consultant hereby agrees to execute and deliver, and to
abide by, the terms and conditions set forth in that certain "Confidentiality
and Invention Assignment Agreement" attached hereto.
SECTION 5.02. Competition. Without Company's prior written
approval, Consultant agrees that, during the Consulting Period (and as the same
may be renewed or extended) or, if Consultant terminates this Agreement without
a material breach by Company, Consultant shall not, directly or indirectly, for
his own account or the account of any other person, firm or company (i) offer or
sell any products or services, or participate in any business which offers or
sells any products or services, which compete directly or indirectly with the
products or services offered or sold, or proposed by Company to be offered or
sold, by Company on the date of such expiration or termination that Consultant
would have knowledge of by virtue of his capacity; (ii) induce or attempt to
induce any person(s) or entities which were customers of Company during the
Consulting Period or were being actively solicited at the time of termination
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of the Consulting Period to cease doing business or not to commence doing
business in whole or in part with Company or solicit the business of any such
customer for any products or services which compete with any of the products or
services offered or sold, or proposed by Company to be offered or sold, by
Company on the date of such expiration or earlier termination that Consultant
would have knowledge of by virtue of his capacity; or (iii) solicit, interfere
with, or endeavor to cause any employee or consultant of Company to leave his
employment or engagement or induce or attempt to induce any such employee or
consultant to breach his employment or engagement agreement with Company.
Participation in a business shall include, but not be limited to, serving as a
director, officer, employee, agent or other representative of or having an
interest in the business as an owner, stockholder, partner, limited partner,
joint venturer, material creditor or any other financial interest; provided,
however, that the following shall not be in violation of this covenant: (i) the
ownership by Consultant of not more than three (3) percent of the outstanding
shares of stock of any such business listed on any national stock exchange or
registered under the federal securities laws and actively traded in the
over-the-counter market; and (ii) participation by Consultant in any capacity in
any business, which participation has received a specific written approval of a
majority of the Board of Directors of Company, which approval is hereby given by
Company to Consultant in connection with its activities related to the following
projects: (A) Global Language Solutions (substantially all of its activities are
based in South America, which principally teaches English as a "second" language
to indigenous populations); (B) Digicon Entertainment (a 3-D motion capture
production company); and (C) American Spirit Foundation
(▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇).
SECTION 5.03. Rights and Remedies Upon Breach of Consultant's
Obligations. Because of the unique and proprietary nature of the Company's
Confidential Information and business operations and practices, and the unique
character of Consultant's services, and because any material breach of any of
the provisions of this Agreement will cause irreparable injury to Company for
which money damages would not be an adequate remedy, it is understood and agreed
that Company's remedy for a material breach by Consultant of this Agreement will
be inadequate, and that, therefore, in the event of any material breach by
Consultant of his obligations pursuant to the terms of this Agreement, Company
shall be entitled, upon application to any court of competent jurisdiction, to
equitable relief (including, without limitation, provisional and permanent
injunctive relief and specific performance) in order to enforce or prevent
violation of such provision or provisions. Nothing contained herein shall be
construed as prohibiting Company from pursuing any other remedies provided to it
by this Agreement or available to it at law or in equity for such breach
including, without limitation, the recovery of money damages from Consultant.
SECTION 5.04. Survival of Consultant's Obligations. Consultant's
obligations pursuant to this Article shall survive the termination of this
Agreement.
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VI. GENERAL PROVISIONS
SECTION 6.01. Notices. All notices, requests, consents or other
communications provided for in or to be given under this Agreement shall be in
writing, may be delivered in person, by facsimile transmission (fax), by
overnight air courier or by mail, and shall be deemed to have been duly given
and to have become effective (a) upon receipt if delivered in person or by fax,
(b) one (1) day after having been delivered to an overnight air courier or (c)
three (3) days after having been deposited in the mails as certified or
registered matter, all fees prepaid, directed to the parties or their assignees
at the following addresses (or at such other address as shall be given in
writing by a party hereto):
If to Consultant: Paraversal, Inc./▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company: ▇▇▇▇ ▇▇▇ Media, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of Chief Operating Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 6.02. Assignment. The Consultant shall be entitled to
assign and delegate the duties prescribed to be performed by it hereunder to an
entity controlling, controlled by or under common control with the Consultant.
Except as otherwise set forth in the preceding sentence, this Agreement shall
not be assigned, pledged or transferred in any way by either party hereto. Any
attempted assignment, pledge, transfer or other disposition of this Agreement or
any rights, interests or benefits contrary to the foregoing provisions shall be
null and void.
SECTION 6.03. Conflicting Agreements. Consultant hereby
represents and warrants to Company that its entering into this Agreement, and
the obligations and duties undertaken by it hereunder, will not conflict with,
constitute a breach of or otherwise violate the terms of any engagement or other
agreement to which it is a party and that it is not required to obtain the
consent of any person, firm, corporation or other entity in order to enter into
this Agreement.
SECTION 6.04. Indemnification; Insurance. Company shall indemnify
Consultant and hold Consultant harmless from any claims, actions, charges,
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding to which Consultant was or
is a party or is threatened to be made a party arising by reason of the fact
that Consultant is or was a consultant of Company. For purposes of this Section,
"proceeding" means any threatened, pending or completed action or proceeding,
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whether civil, criminal, administrative or investigative, and includes an action
or proceeding by or in the right of Company to procure a judgment in its favor,
and "expenses" includes, without limitation, attorneys' fees and any expenses of
establishing a right to indemnification under this Agreement or under the laws
of the State of California. In addition, to the extent economically practicable
as determined by the Company in its sole discretion, Company shall include
Consultant as an additional named insured on its insurance policies, including
without limitation, any officers' and directors' liability insurance policy.
SECTION 6.05. No Waiver. No term or condition of this Agreement
shall be deemed to have been waived, nor shall any party hereto be estopped from
enforcing any provision of this Agreement, except by written instrument of the
party charged with such waiver or estoppel. Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than the act
specifically waived.
SECTION 6.06. Governing Law; Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California. In the event of any dispute or controversy arising under this
Agreement or the transactions contemplated herein, the parties mutually consent
to the jurisdiction of the state and federal courts located in Los Angeles,
California, and agree that any litigation may be served outside of California
with the same force and effect as if service had been made in California.
SECTION 6.07. Entire Agreement; Amendments. This Agreement,
including the "Confidentiality and Invention Assignment Agreement" attached
hereto, is intended by the parties as a final expression of their Agreement with
respect to the terms included herein, and may not be contradicted or varied by
evidence of any prior or contemporaneous agreement. Any change, revision or
modification of any provision of this Agreement shall not be binding unless
executed in writing and signed by a duly authorized representative of each of
the parties hereto.
SECTION 6.08. Headings. Headings contained herein are for
convenient reference only; they are not a part of this Agreement and are not to
affect in any way the substance or interpretation of this Agreement.
SECTION 6.09. Survival of Provisions. In case any one or more of
the provisions or any portion of any provision contained in this Agreement
(including, without limitation, any geographical or temporal restrictions,
contained in Article V hereof) should be found to be invalid, illegal or
unenforceable in any respect, such provision or portion thereof shall be
modified or deleted in such manner so as to afford the parties the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the validity, legality and enforceability
of any such provision shall not in any way be
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affected or impaired thereby, such remaining provisions or portion of any such
provision construed as severable and independent thereof.
SECTION 6.10. Arbitration; Attorneys' Fees. Any dispute or
conflict which arises between the parties hereto shall be submitted to the
American Arbitration Association, before a single arbitrator, in accordance with
its then current Commercial Rules in Los Angeles, California, for arbitration
and the parties shall be bound by the results of such arbitration in accordance
with applicable California law. If either party brings an action for judicial
review or enforcement of the arbitration proceedings, award or decision, the
prevailing party in any such action, trial or appeal shall be entitled to its
reasonable attorneys' fees to be paid by the nonprevailing party as fixed by the
court.
SECTION 6.11. Waiver of Jury. With respect to any dispute arising
under or in connection with this Agreement or any related agreement, as to which
no party invokes the right to arbitration hereinabove provided, or as to which
legal action nevertheless occurs, each party irrevocably waives all rights it
may have to a jury trial. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY EACH PARTY, AND EACH ACKNOWLEDGES THAT NONE OF THE OTHER
PARTIES NOR ANY PERSON ACTING ON BEHALF OF THE OTHER PARTIES HAS MADE ANY
REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER, BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
SECTION 6.12. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be considered a duplicate original.
SECTION 6.13. Construction. Each of the parties hereto has been
represented by counsel throughout this transaction who has carefully negotiated
the provisions hereof. The language in all parts of this Agreement shall be in
all cases construed simply according to its fair meaning and not strictly for or
against any of the parties. When the context so requires in this Agreement, the
masculine gender includes the feminine and/or the neuter, and the singular
number includes the plural.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, in the case of Company by its duly authorized officer(s) empowered so
to act, all as of the date first above written.
▇▇▇▇ ▇▇▇ MEDIA, INC.,
By: /s/ Gill Champion
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Gill Champion, Chief Operating Officer
PARAVERSAL, INC.,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
[Signature of Consultant]
▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
[Type or Print Name and Title]
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CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT
AGREEMENT dated as of October 5, 1999, between ▇▇▇▇ ▇▇▇
MEDIA, INC., a Colorado corporation and its affiliated companies
(collectively, the "Company"), and PARAVERSAL, INC.
("Paraversal") and ▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"; ▇▇▇▇ and Paraversal
being hereinafter referred to, collectively, as "Consultant").
In consideration of the commencement of Consultant's engagement
and the compensation paid to Consultant, Consultant acknowledges and agrees with
the Company as follows:
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I. EFFECTIVENESS
This Agreement shall become effective on the earlier of (i)
commencement of Consultant's engagement with the Company, or (ii) the date and
time at which any Confidential Information (as defined in Section 2.01 below)
was or is first disclosed to Consultant.
II. PROTECTION OF COMPANY'S CONFIDENTIAL INFORMATION
SECTION 2.01. Confidential Information. The Company has and will
develop, compile, and own certain proprietary techniques and confidential
information which have great value in its business (said techniques and
information being hereinafter referred to, collectively, as "Confidential
Information"). The Company has and also will have access to Confidential
Information of its Clients. ("Clients" shall mean any persons or entities for
whom the Company performs services or furnishes goods, or from whom the Company
or Consultant obtains information). Confidential Information includes not only
information disclosed by the Company or its Clients to Consultant in the course
of his or her engagement, but also information developed or learned by
Consultant during the course of his or her engagement with the Company, such as
Innovations (as defined in Section 4.01 below). Confidential Information is to
be broadly defined. Confidential Information includes all information that has
or could have commercial value or other utility in the business in which the
Company or Clients are engaged or contemplate engaging. Confidential Information
also includes all information of which the unauthorized disclosure could be
detrimental to the interests of the Company or Clients, whether or not such
information is identified as Confidential Information by the Company or Clients.
By example and without limitation, Confidential Information includes all
technical and non-technical information including copyright, trade secret and
proprietary information, pricing strategies and models, know-how, processes,
algorithms, software programs, software source documents, and formulas related
to the current, future or proposed products and services of the Company, and
includes, without limitation, the Company's information concerning pricing
strategies, financial information, procurement and purchasing requirements,
business forecasts, and sales and marketing plans and information.
Notwithstanding the foregoing, Confidential Information shall
expressly exclude any information that (i) was in the public domain at the time
it was communicated to the Employee; (ii) entered into the public domain
subsequent to the time it was communicated to the Employee through no fault of
the Employee; (iii) was in the Employee's possession free of any obligation of
confidence at the time it was communicated to the Employee; (iv) was developed
by Employee independently of and without reference to any information
communicated to the Employee by the Company; or (v) disclosure was required by
any governmental body, was otherwise required by law, or was necessary to
establish the rights of either party under this Agreement.
SECTION 2.02. Protection of Confidential Information. Consultant
agrees that at all times during or after his or her engagement, he or she will
hold in trust, keep
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Paraversal, Inc.
As of October 5, 1999
Page 3
confidential, and not disclose to any third party or make any use of the
Confidential Information of the Company or Clients except for the benefit of the
Company or Clients and in the course of his or her engagement with the Company.
Consultant further agrees not to cause the transmission, removal, or transport
of Confidential Information or Innovations from the Company's principal place of
business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or
such other place of business specified by the Company, without prior written
approval of the President of the Company. Consultant acknowledges that he or she
is aware that the unauthorized disclosure of Confidential Information of the
Company or its Clients may be highly prejudicial to their interests, an invasion
of privacy, and an improper disclosure of trade secrets. Whenever the approval,
designation, specification, or other act of the President of the Company is
required under this Agreement, the President may, by written designation,
authorize an agent of the Company to perform such act.
III. PRIOR KNOWLEDGE AND RELATIONSHIPS
SECTION 3.01. Prior Knowledge and Innovations. Except as
disclosed on Schedule A to this Agreement, Consultant does not know anything
about the Company's Confidential Information, other than the information he or
she has learned from the Company. Consultant also has disclosed on Schedule A a
complete list of all inventions or innovations proprietary to Consultant and
which Consultant wants to exclude from the application of this Agreement. The
Company agrees to receive and hold all such disclosures in confidence.
SECTION 3.02. Prior Commitments. Except as disclosed on Schedule
A to this Agreement, Consultant has no other agreements, relationships, or
commitments to any other person or entity which conflict with Consultant's
obligations to the Company under this Agreement.
SECTION 3.03. Proprietary Information or Trade Secrets of Others.
Consultant will not disclose to the Company, or use, or induce the Company to
use, any proprietary information or trade secrets of others. Consultant
represents and warrants that he or she has returned all property and
confidential information belonging to all prior employers.
IV. ASSIGNMENT OF CONSULTANT INNOVATIONS
SECTION 4.01. Disclosure. Consultant will promptly disclose in
writing to the Company all discoveries, developments, designs, ideas,
innovations, improvements, inventions, formulas, processes, techniques,
know-how, and data (whether or not patentable or registerable under copyright or
similar statutes) made, conceived, reduced to practice, or learned by Consultant
(either alone or jointly with others) during the period of his or her
engagement,
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that are related to or useful in the business of the Company, or which result
from tasks assigned to Consultant by the Company, or from the use of premises
owned, leased, or otherwise acquired by the Company (all of the foregoing being
hereinafter referred to, collectively, as "Innovations").
SECTION 4.02. Assignment of Innovations. Consultant acknowledges
and agrees that all Innovations belong to and shall be the sole property of the
Company and shall be Innovations of the Company subject to the provisions of
this Agreement. Consultant hereby assigns to the Company all right, title, and
interest Consultant may have or may acquire in and to all Innovations.
Consultant agrees to sign and deliver to the Company (either during or
subsequent to his or her engagement) such other documents as the Company
considers desirable to evidence (1) the assignment of all rights of Consultant,
if any, in any Innovations to the Company and/or (2) the Company's ownership of
such Innovations. Any provision in this Agreement requiring Consultant to assign
rights to an Innovation does not apply to any invention for which no equipment,
supplies, facilities or trade secret information of the Company was used and
which was developed entirely on Consultant's own time and which does not relate
to the business of the Company.
SECTION 4.03. Power of Attorney. In the event the Company is
unable to secure Consultant's signature on any document necessary to apply for,
prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Innovation, whether due to mental or physical
incapacity or any other cause, Consultant hereby irrevocably designates and
appoints the Company and each of its duly authorized officers and agents as his
or her agent and attorney-in-fact, to act for and in his or her behalf and stead
to execute and file any such document and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other right or protections with the same force and effect as if
executed and delivered by the Consultant.
V. TERMINATION OF ENGAGEMENT
SECTION 5.01. Delivery of Documents and Data on Termination of
Engagement. In the event of termination (voluntary or otherwise) of Consultant's
engagement with the Company, Consultant agrees, promptly and without request, to
deliver to and inform the Company of all documents and data pertaining to his or
her engagement and the Confidential Information and Innovations of the Company
or Clients, whether prepared by Consultant or otherwise coming into his or her
possession or control, and to sign Schedule B to this Agreement. Consultant will
not retain any written or other tangible material containing any information
concerning or disclosing any of the Confidential Information or Innovations of
the Company or Clients. Consultant recognizes that the unauthorized taking of
any of the
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Page 5
Company's trade secrets is a crime under California Penal Code Section 499c and
is punishable by imprisonment in a state prison or in a county jail for a time
not exceeding one year, or by a fine not exceeding Five Thousand Dollars
($5,000), or by both such fine and such imprisonment. Consultant further
recognizes that such unauthorized taking of the Company's trade secrets could
also result in civil liability under California Civil Code Section 3426, and
that willful misappropriation may result in an award against Consultant for
triple the amount of the Company's damages and the Company's attorneys' fees in
collecting such damages.
SECTION 5.02. Obligations of Consultant After Termination of
Engagement. In the event of termination (voluntary or otherwise) of Consultant's
engagement with the Company, Consultant agrees that he or she will protect the
value of the Confidential Information and Innovations of the Company and Clients
and will prevent the misappropriation or disclosure thereof. Consultant will not
disclose or use to his or her benefit (or the benefit of any third party) or to
the detriment of the Company or its Clients any Confidential Information or
Innovation. Consultant further agrees that for a period of one year immediately
following termination (voluntary or otherwise) of Consultant's engagement with
the Company, Consultant shall not interfere with the business of the Company by
inducing an employee to leave the Company's employ or by inducing a consultant
to sever the consultant's relationship with the Company.
In addition, each party hereto shall refrain thereafter from
uttering any disparaging remarks or criticisms of the other party or its
officers, directors, shareholders, employees, representatives or agents which
might have the effect of injuring such party or such officers', directors',
shareholders', employees', representatives' or agents' character, reputations,
or profitability, and such party shall be entitled in the case of each such
utterance to liquidated damages in the amount of $10,000. Each party hereto
acknowledges that the liquidated damages specified above approximate the amount
of damages which a party would sustain taking into account, from the nature of
the case, that it would be impracticable or extremely difficult to fix the
actual damages. Each party hereto acknowledges further that such damages are
reasonable under the circumstances existing at the time this Agreement is made
and that this provision for liquidated damages is valid under Section 1671 of
the California Civil Code. Each party's entitlement to liquidated damages as
provided herein is in addition to, and not in lieu of, all its other rights and
remedies available hereunder or under applicable law or in equity.
VI. GENERAL PROVISIONS
SECTION 6.01. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder
shall be in
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Page 6
writing and may be personally served or may be deposited in the United States
mail, registered or certified, return receipt requested, postage prepaid,
addressed as follows:
If to the Company: ▇▇▇▇ ▇▇▇ Media, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of Chief Operating Officer.
If to the Consultant: Paraversal, Inc./▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other address as such party shall have specified most recently to the
other party by written notice. Notice mailed as provided herein shall be deemed
given on the date of delivery, as evidenced by the return receipt.
SECTION 6.02. Governing Law. This Agreement shall be construed
under the substantive laws of the State of California and without giving effect
to California choice-of-law or conflict-of-law principles. In the event of any
dispute or controversy arising under this Agreement or the transactions
contemplated herein, the parties mutually consent to the jurisdiction of the
state courts of California and the federal district court for the Central
District of California, and agree that any litigation may be served outside of
California with the same force and effect as if service had been made in
California.
SECTION 6.03. Parties in Interest. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by the Consultant without the prior written consent of the Company;
provided, however, further, that the Company shall be entitled to assign all its
rights and delegate all its duties hereunder without the consent or any act on
the part of the Consultant.
SECTION 6.04. Entire Agreement; Amendment. This Agreement and the
schedules hereto constitutes and contains the entire agreement of the parties
hereto and supersedes any and all prior negotiations, correspondence,
undertakings and agreements between the parties respecting the subject matter
hereof. This Agreement may not be amended or modified, except by written
instrument signed by the party to be bound.
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SECTION 6.05. Waiver. Neither any failure nor any delay on the
part of the Company or the Consultant in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise or the exercise
of any other right, power or privilege.
SECTION 6.06. Survival of Provisions. In case any one or more of
the provisions or any portion of any provision contained in this Agreement
should be found to be invalid, illegal or unenforceable in any respect, such
provision or portion thereof shall be modified or deleted in such manner so as
to afford the parties the fullest protection commensurate with making this
Agreement, as modified, legal and enforceable under applicable laws, and the
validity, legality and enforceability of any such provision shall not in any way
be affected or impaired thereby, such remaining provisions or portion of any
such provision construed as severable and independent thereof.
SECTION 6.07. Arbitration; Attorneys' Fees. Any dispute or
conflict which arises between the parties hereto shall be submitted to the
American Arbitration Association in accordance with its then current Commercial
Rules in Los Angeles County, California, for arbitration and the parties shall
be bound by the results of such arbitration in accordance with the California
Code of Civil Procedure Section 1283.05. If either party brings an action for
judicial review or enforcement of the arbitration proceedings, award or
decision, the prevailing party in any such action, trial or appeal shall be
entitled to its reasonable attorneys' fees to be paid by the nonprevailing party
as fixed by the court.
SECTION 6.08. Waiver of Jury. With respect to any dispute arising
under or in connection with this Agreement or any related agreement, as to which
no party invokes the right to arbitration hereinabove provided, or as to which
legal action nevertheless occurs, each party irrevocably waives all rights it
may have to a jury trial. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY EACH PARTY, AND EACH ACKNOWLEDGES THAT NONE OF THE OTHER
PARTIES NOR ANY PERSON ACTING ON BEHALF OF THE OTHER PARTIES HAS MADE ANY
REPRESENTATION OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER, BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL. EACH PARTY FURTHER ACKNOWLEDGES THAT IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
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SECTION 6.09. Engagement at Will. Engagement and compensation can
be terminated, with or without cause, and with or without notice, at any time,
at the option of the Company or the Consultant. No provision set forth in this
Agreement shall limit or otherwise alter the foregoing.
SECTION 6.10. Counterparts. This Agreement may be executed in two
or more counterparts, but all of which, when taken together, shall constitute
one and the same Agreement.
IN WITNESS WHEREOF, the Consultant and in the case of the
Company, by its duly authorized officer empowered so to act, have duly executed
this Agreement, as of the date first above written.
COMPANY: ▇▇▇▇ ▇▇▇ MEDIA, INC.,
By: /s/ Gill Champion
-----------------------------------------
Its: C.O.O.
-------------------------------------
CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INNOVATIONS YOU MAKE DURING YOUR
ENGAGEMENT, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE THE COMPANY'S
CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO YOUR ENGAGEMENT. CONSULTANT HAS
READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS. CONSULTANT HAS
COMPLETELY FILLED OUT SCHEDULE A TO THIS AGREEMENT.
CONSULTANT: PARAVERSAL, INC.,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Its: Authorized Representative
-------------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
