CONSULTING AGREEMENT
Exhibit 10.11
EXECUTION VERSION
THIS CONSULTING AGREEMENT (“Agreement") is made effective as of the 24th day of October, 2007
(the “Effective Date”), by and between Quepasa Corporation (the “Company”), Xxxxxx Productions,
Inc. (“Xxxxxx Productions”) and Xxxxxxx Xxxxxx (“Xx. Xxxxxx” and together with Xxxxxx Productions,
the “Consultant” and collectively with the Company, the “Parties”).
RECITALS
WHEREAS, Xx. Xxxxxx is a co-founder of SiTV, Inc. and, while acting as Chairman and Chief
Creative Officer for SiTV, Inc., established SiTV, Inc.’s presence in the cable television
marketplace;
WHEREAS, due to Xx. Xxxxxx’x creative expertise and invaluable vision relating to the Latino
marketplace, Xx. Xxxxxx was recently appointed to serve as the non-executive Chairman of the Board
of the Company and the Company now desires to retain Xx. Xxxxxx to perform non-exclusive consulting
services, except as otherwise provided herein, for the Company through Xxxxxx Productions; and
WHEREAS, Xxxxxx Productions, Xx. Xxxxxx and the Company wish to enter into this Agreement to
set forth the obligations and responsibilities of each in connection with their contractual
relationship.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the Parties hereto agree as follows:
AGREEMENT
1. NATURE OF WORK
Xxxxxx Productions will provide the Company with the consulting services of Xx. Xxxxxx in the
areas of web based programming content, marketing, branding of the Company and any other consulting
services mutually agreed between the Parties that is determined by the Parties to be beneficial to
the Company (the “Services”). The Consultant shall provide the Services on a non-exclusive basis,
except in the case of consulting services for internet programming content produced in Spanish that
does not conflict with Consultant’s agreement with Maya Entertainment (“Special Services”), and in
such case, the Consultant shall provide the Special Services on an exclusive basis. The Parties
agree that Consultant shall only use the Consultant Intellectual Property (as defined herein)
relating to the Special Services for media programming targeting English speaking audiences. The
Company acknowledges that Xxxxxx has and is currently involved creatively and sits on the Board of
Si TV, Maya Entertainment, Xxxxxx Productions and Sandbox Entertainment (the “Affiliated
Businesses”) and to the extent agreements relating to these entities conflict with this Agreement,
this Agreement shall be subordinate to such pre-existing agreements. The Company acknowledges that
the Affiliated Businesses are all involved in the bilingual, English and Spanish language media
(including television and internet) media space.
2. DURATION
The term of this Agreement shall be from the Effective Date, and, unless otherwise terminated,
shall continue until the first (1st) anniversary of the Effective Date, following which
the Term shall automatically renew for successive three (3) month periods unless and until a party
delivers at least thirty (30) days prior written notice of the desire to terminate this Agreement
to the other parties, in which this Agreement will expire thirty (30) days from the date such
notice is received (the “Term”). Notwithstanding the above and in the event that the Company
becomes involved in the television business during the Term, subject to Section 12, the
Company will have the option to renegotiate in good faith the Agreement and the Term hereof realizing that Xx. Xxxxxx currently has a non compete agreement with
Si TV that prohibits him from launching an “English Language Latino Themed cable nerwork.”
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3. COMPENSATION
(a) Monthly Payment for Services. For the Services rendered under this Agreement, the
Company will pay to Xxxxxx Productions Eight Thousand Three Hundred and Thirty-Three Dollars
($8,333.00) per month for the Term of this Agreement. At the election of the Consultant, such
payment may be made in the form of options to purchase the Company’s common stock. Xxxxxx
Productions shall provide monthly invoices for the Services rendered by Xx. Xxxxxx during the month
preceding the invoice. Payment shall be made to Xxxxxx Productions within ten (10) business days
following the Company’s receipt of each such invoice. All invoices shall be directed to the
attention of the Chief Executive Officer or his designee.
(b) Stock Options. Within ten (10) business days of the execution of this Agreement, a
grant of nonqualified stock options shall be provided to Xxxxxx Productions to purchase shares of
the Company’s common stock in an amount equal to the greater of 210,000 shares or the number of
shares that equals One Percent (1%) of the fully-diluted shares of the Company (the “Optioned
Shares”), and at the price set forth in the Non-Qualified Stock Option Agreement executed by Xxxxxx
Productions and the Company in conjunction with this Agreement, one-third of the optioned shares
shall vest and become exercisable on October 24, 2008 and the remaining two-thirds of the optioned
shares will vest and become exercisable in twenty-four (24) equal monthly installments commencing
immediately thereafter. Notwithstanding the foregoing, if the Consultant shall be terminated
without cause, the Optioned Shares shall immediately vest and become exercisable.
4. PERFORMANCE OF DUTIES
(a) Good Faith Performance. Consultant agrees that it will at all times faithfully,
industriously, and to the best of its ability, experience and talent, and in good faith, perform
all of the duties that may be required pursuant to the express terms hereof, and the Company will
provide all necessary information and other support appropriate to the performance of the Services.
Consultant shall report directly to the Chief Executive Officer of the Company for the Term of
this Agreement.
(b) Location. Consultant agrees that Xx. Xxxxxx will primarily perform the Services
from the office of Xxxxxx Productions. Travel outside of the Greater Los Angeles area shall
require approval by Xx. Xxxxxx, and reasonable and necessary business expenses for such long
distance travel shall be paid by the Company provided such expenses have been pre-authorized by the
Chief Executive Officer.
5. CONFIDENTIALITY.
During the term of this Agreement and at all times thereafter, the Consultant will keep
confidential, not use for Consultant’s own benefit, and not divulge, furnish or make accessible to
anyone any Confidential Information. As used herein, “Confidential Information” means all
information concerning or related to the Services and the Company’s business, operations, financial
condition and prospects of the Company and its Affiliates, regardless of the form in which such
information appears and whether or not such information has been reduced to a tangible form, and
will specifically include: (a) all information regarding the stockholders, directors, officers,
employees, customers, suppliers, distributors, sales representatives and licensees of the Company
and its Affiliates, in each case whether past, present or prospective; (b) all software,
inventions, discoveries, trade secrets, processes, techniques, methods, formulae, ideas and
know-how of the Company and its Affiliates; (c) all financial statements, audit reports, budgets
and business plans or forecasts of the Company and its Affiliates, and (d) all Consultant Intellectual Property created by or for Consultant hereunder; provided, that
Confidential Information will not include information which is or becomes generally known to the
public through no act or omission of Consultant; “Affiliate” means any Person which controls, is controlled by
or is under common control with the Company; “control” means, with respect to any Person, the
possession, direct or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by contract or otherwise;
and “Person” means any individual, firm, corporation, partnership, limited liability the Company,
trust, estate, association or other legal entity.
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6. OWNERSHIP AND USE OF INTELLECTUAL PROPERTY.
(a) Any protectable Intellectual Property relating to the Services that is conceived,
developed, or reduced to practice, or caused to be conceived, developed, or reduced to practice, in
whole or in part by Consultant in its performance of the Services, during Consultant’s engagement
hereunder (the “Consultant Intellectual Property”) will be deemed to have been made or developed by
Consultant and will be the exclusive property of Consultant. Consultant hereby grants to Company
an exclusive, royalty-free, non-transferable, worldwide license to make and use the Consultant
Intellectual Property throughout the Term of this Agreement and for a period of six (6) months
after termination of this Agreement. Notwithstanding the foregoing, Consultant shall be permitted
to use the Consultant Intellectual Property related to the Special Services solely for media
programming in English during the Term of this Agreement. The Parties agree that during the Term
of this Agreement, Consultant shall not use the Consultant Intellectual Property relating to the
Spanish-language Special Services for any entity other than Company. The Parties agree that
Consultant, during the term Term of this Agreement, shall use its best efforts to xxxx
and/or brand any Consultant Intellectual Property used for third parties with Company’s trademarks;
provided, however, Consultant shall only be permitted to use Company’s trademarks, service marks,
and/or trade dress with the prior written approval of Company. Notwithstanding this Section 6(a),
nothing in this Agreement shall be construed to grant Consultant any rights in (i) Company customer
data, (ii) Company trademarks, service marks and trade dress, and/or (iii) Company Confidential
Information, and Company hereby retains all such rights. During the term Term of this Agreement
and for a period of six (6) months after termination of this Agreement, Consultant hereby
agrees to pay Company twenty percent (20%) of any net revenue related to Consultant’s exploitation
of Consultant Intellectual Property with third parties.
(b) As used herein, “Intellectual Property” means any and all Inventions, Works, trade
secrets, trademarks, mask works, and copyrights. “Invention(s)” means any and all discoveries,
improvements, ideas, concepts, creative works, and designs, whether or not in writing or reduced to
practice, and whether or not they are patentable, including, but not limited to, processes,
methods, formulas, and techniques and know-how; and “Works” means those works fixed in any tangible
medium of expression from which they can be perceived, reproduced, or otherwise communicated,
either directly or with the aid of a machine or device, whether or not they are copyrightable.
7. RIGHT OF FIRST REFUSAL.
(a) If Consultant desires to sell or transfer any of its interests in or any of its content
that it developed for the Affiliated Businesses, to another entertainment company, the Consultant
shall afford the Company a right of first refusal.
(b) Consultant shall provide the Company with ninety (90) days’ prior written notice of its
intention to make a transfer of any of its interests in or any of its content that it developed for
the Affiliated Businesses (the “Disposition Notice”). In the Disposition Notice, the Consultant
shall specify the price at which the interests or content is proposed to be sold or transferred,
the portion of the Consultant’s interest or content to be sold or transferred, the identity of the
proposed purchaser or transferee, and the terms and conditions of the proposed transfer or sale.
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(c) The Company may elect within sixty (60) days after receiving the Disposition Notice, to
purchase the interests or content to be sold or transferred by the Consultant at the proposed price
as contained in the Disposition Notice. The terms and conditions of the purchase by the Company
shall be the terms and conditions of the proposed transfer or sale as set forth in the Disposition
Notice. Any purchase pursuant to the foregoing alternative method shall be made in cash within
sixty (60) days after receiving the Disposition Notice.
(d) If the Company decides not to purchase the interest or content offered by the Consultant,
within thirty (30) days after the Company reaches such decision, and, in any event, at the
expiration of the first sixty (60) days of the notice period specified in Section 7(b), the
Company shall so notify the Consultant. The notice shall state that the Company did not exercise
its option to purchase the interest or content developed for the Affiliated Businesses offered by
the Consultant.
(f) If the Company does not purchase the interests or content covered by the Disposition
Notice as provided in the foregoing subsections of this Section 7 within the first ninety
(90) days of the notice period, the Consultant may sell the interest or content to Person other
than the Company, provided that any disposition must be made on the terms and conditions and to the
party specified in the Disposition Notice and must be consummated within the ninety (90) day notice
period.
8. NON-DISPARAGEMENT.
(a) Neither Xx. Xxxxxx, Xxxxxx Productions nor Xxxxxx Productions’ shareholders, officers,
directors, members, managers, or employees will make any statements (or cause or encourage others
to make any statements), written or verbal, that defame, disparage or in any way criticize the
personal or business reputation, practices or conduct of the Company or its shareholders, officers,
directors, or employees.
(b) Neither the Company nor the Company’s shareholders, officers, directors, members,
managers, or employees will make any statements (or cause or encourage others to make any
statements), written or verbal, that defame, disparage or in any way criticize the personal or
business reputation, practices or conduct of Xx. Xxxxxx, Xxxxxx Productions or Xxxxxx Productions’
shareholders, officers, directors, or employees.
9. REPRESENTATIONS AND WARRANTIES OF XXXXXX PRODUCTIONS.
Xxxxxx Productions hereby represents and warrants to, and covenants with, the Company as
follows:
(a) Xxxxxx Productions has the full legal right and power and all authority required to enter
into and to perform according to the terms of this Agreement. This Agreement is duly and validly
executed and delivered by Xxxxxx Productions, and constitutes legal, valid, and binding obligations
of Xxxxxx Productions enforceable against Xxxxxx Productions in accordance with its terms.
(b) The execution, delivery and performance of this Agreement by Xxxxxx Productions do not and
will not (i) conflict with, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement or
other instrument or other understanding to which Xxxxxx Productions is a party or by which any
property or asset of Xxxxxx Productions is bound or affected, or (ii) result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which Xxxxxx Productions is subject (including federal and state
securities laws and regulations), or by which any property or asset of Xxxxxx Productions is bound
or affected. Consultant Intellectual Property does not misappropriate or infringe any third party
intellectual property rights.
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10. REPRESENTATIONS AND WARRANTIES OF COMPANY.
The Company hereby represents and warrants to, and covenants with, the Consultant as follows:
(a) The Company has the full legal right and power and all authority required to enter into
and to perform according to the terms of this Agreement. This Agreement is duly and validly
executed and delivered by the Company, and constitutes legal, valid, and binding obligations of the
Company enforceable against the Company in accordance with its terms.
(b) The execution, delivery and performance of this Agreement by the Company does not and will
not (i) conflict with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement or
other instrument or other understanding to which the Company is a party or by which any property or
asset of the Company is bound or affected, or (ii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or affected.
11. INDEPENDENT CONSULTANT RELATIONSHIP.
At all times during the Term, Consultant and the Company shall have the relationship of
independent contractors. In no event shall Consultant be deemed to be an employee of the Company,
and Consultant shall not at any time be entitled to any Company employment rights or benefits or be
deemed to be an agent of the Company or have any power to bind or commit the Company or otherwise
act on the Company’s behalf unless expressly authorized to do so in writing by an officer of the
Company. Consultant shall have the independent authority to determine the means and manner of
engaging in the Services within the reasonable guidelines established by the Company.
12. TERMINATION
(a) Expiration of Term. The Term of this Agreement shall continue for successive three
(3) month periods unless terminated in accordance with Section 2 hereof.
(b) Death or Disability. If Xx. Xxxxxx dies during the Term of this Agreement, this
Agreement shall be deemed to terminate on the date of Xx. Xxxxxx’x death.
(c) Without Cause. Xxxxxx Productions or the Company may terminate the Term of this
Agreement without cause upon providing thirty (30) days written notice to the Company.
(d) Compensation on Termination. In the event of termination of the Term of this
Agreement by the Company or by Consultant without cause or by the death of Xx. Xxxxxx, Xxxxxx
Productions shall be entitled to payment for the Services rendered by Xx. Xxxxxx up to and
including the date of termination of the Term of this Agreement. All options granted pursuant to
Section 3(b), above, shall cease to vest as of the date of termination of the Term of this
Agreement. However, Xxxxxx Productions shall be permitted to exercise any options which have fully
vested prior to such date of termination.
(e) Notices. All notices required or permitted by the terms of this Agreement shall be
sufficient if given in writing and delivered personally, by facsimile, or by certified mail or
courier service, requiring written acknowledgement of receipt, to the following addresses for the
persons or entities listed:
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| For the Company: | Xxxx X. Xxxxxx | |||
| Chief Executive Officer | ||||
| Quepasa Corporation | ||||
| 0000 X. Xxxxxxxx Xxxx | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Fax: ( ) | ||||
| With a copy to: | ||||
| Xxxxxx X. Xxxxx, Esq. | ||||
| Xxxxx & Xxxxxx, L.L.P. | ||||
| Xxx Xxxxxxx Xxxxxx | ||||
| Xxxxxxx, Xxxxxxx 00000 | ||||
| Fax: (000) 000-0000 | ||||
| For Xx. Xxxxxx and Xxxxxx Productions: | Xxxxxxxx X. Xxxxxxx, Esq. | |||
| Akin Gump Xxxxxxx Xxxxx & Xxxx LLP | ||||
| 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000 | ||||
| Xxx Xxxxxxx, XX 00000 | ||||
| Facsimile: (000) 000-0000 |
(f) Governing Law. This Agreement is governed by and shall be construed and
interpreted according to the laws of the State of Nevada.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, this Agreement is effective between the parties as of the Effective Date.
| THE COMPANY: | THE CONSULTANT: | |||||||
| QUEPASA CORPORATION | XXXX XXXXXX | |||||||
| By: | /s/ Xxxx X. Xxxxxx | /s/ Xxxx Xxxxxx | ||||||
Name:
|
Xxxx X. Xxxxxx | |||||||
Title:
|
Chief Executive Officer | Date: | ||||||
Date: |
||||||||
| XXXXXX PRODUCTIONS, INC. | ||||||||
| By: | /s/ Xxxx Xxxxxx | |||||||
| Name: | Xxxx Xxxxxx | |||||||
| Title: | President | |||||||
| Date: | ||||||||
Signature Page for Consulting Agreement
