EXHIBIT 99.1
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CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of April 1, 2002 (this "Agreement"), by
and between TREMOR ENTERTAINMENT, INC., a California corporation (the
"Company"), and XXXX XXXXXXX, an individual (the "Consultant").
W I T N E S S E T H:
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WHEREAS, the Company desires to engage the Consultant to provide certain
services to the Company and the Consultant is willing to accept such engagement
upon the terms and provisions, and subject to the conditions, hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Engagement; Services. The Company shall retain and engage the
Consultant, on a part-time basis during the Term (as defined in Section 2
hereof), to provide the Company, upon the request of the Board of Directors of
the Company from time to time, such consulting and advisory services with
respect to product growth and strategic planning and the formulation of
strategic alliances and business relationships and/or affiliations deemed
appropriate and in line with the Company's business plans and objectives (the
"Services").
2. Term. Subject to earlier termination pursuant to Section 8 hereof,
the term of this Agreement (as the same may be extended hereunder, the "Term")
shall commence as of the date hereof and shall continue in effect until the
first anniversary thereof, whereupon this Agreement shall automatically renew
for successive one-year periods unless terminated by either party by written
notice to the other party not less than thirty (30) days prior to the end of the
then-existing Term, in which event this Agreement shall terminate as of the last
day of the then-existing Term.
3. Compensation. In consideration of the Services to be rendered during
the Term by the Consultant hereunder, and provided the Services are performed to
the Company's reasonable satisfaction, the Company will pay to the Consultant a
consulting fee at the rate of Seventy-Two Thousand Dollars ($72,000) per annum,
which fee shall be payable monthly during the Term (the "Fees").
4. Expenses. The Company shall, upon presentation of receipts or other
supporting documentation as the Company may reasonably require, pay or reimburse
the Consultant for all out-of-pocket expenses reasonably incurred or paid by the
Consultant in the performance of the Services.
5. Stock Grant. As further consideration for his services to the Company
during the Term, the Company agrees to issue to
the Consultant, subject to the provisions of this Section 5, an aggregate of
three hundred thousand (300,000) shares of the Company's common stock (the
"Shares").
6. Independent Contractor. At all times during the term hereof, the
Consultant shall be an independent contractor in providing consulting services
hereunder, with the sole right to supervise, manage, operate, control and direct
his performance incident to such consulting services. Nothing contained in this
Agreement shall be deemed or construed to create a partnership or joint venture,
to create the relationships of principal/agent or otherwise create any fiduciary
duty or any liability whatsoever of either party with respect to the
indebtedness, liabilities, obligations or actions of the other or any of their
employees or agents, or any other person or entity.
7. Representations and Warranties.
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(a) By the Consultant. The Consultant hereby represents and warrants
to the Company as follows:
(i) The Consultant has the capacity to execute, deliver and
perform this Agreement. This Agreement constitutes a legal, valid and binding
obligation of the Consultant, enforceable against the Consultant in accordance
with its terms, except as enforcement may be limited by (A) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability affecting the enforcement of creditors' rights and (B) the
application of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(ii) The execution, delivery and performance of this Agreement by
the Consultant shall not: (A) violate, conflict with or constitute a breach of,
or default under, any material agreement or other instrument binding upon the
Consultant or to which he is a party; (B) violate or contravene any judgment,
decree or order of any court or regulatory body binding upon the Consultant; or
(C) violate any law or regulation applicable to the Consultant.
(iii) No filing or registration with, notice to or authorization,
consent or approval or other action (including, without limitation, the grant of
any waiver) of any person or entity is required to be obtained by the Consultant
in connection with its execution, delivery and performance of this Agreement.
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(b) By the Company. The Company hereby represents and warrants to the
Consultant as follows:
(i) The Company has the corporate power and authority to execute,
deliver and perform this Agreement. The execution, delivery and performance of
this Agreement has been duly authorized by all necessary corporate action on the
part of the Company. This Agreement constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforcement may be limited by (A) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the enforcement of creditors' rights and (B) the
application of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(ii) The execution, delivery and performance of this Agreement by
the Company shall not: (A) violate or contravene any provision of the
certificate of incorporation or by-laws of the Company; (B) violate, conflict
with or constitute a breach of, or default under, any material agreement or
other instrument binding upon the Company or to which it is a party; (C) violate
or contravene any judgment, decree or order of any court or regulatory body
binding upon the Company; or (D) violate any law or regulation applicable to the
Company.
(iii) No filing or registration with, notice to or authorization,
consent or approval or other action (including, without limitation, the grant of
any waiver) of any person or entity is required to be obtained by the Consultant
in connection with its execution, delivery and performance of this Agreement.
8. Termination Provisions.
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(a) Termination by the Company. The Company may terminate the
Consultant's consultancy hereunder immediately upon written notice to the
Consultant if any of the following shall occur:
(i) any material breach by the Consultant of its obligations
under this Agreement, which breach is not cured within fifteen (15) days written
notice thereof delivered by the Company to the Consultant; or
(ii) any material breach of any representation or warranty made
by the Consultant in this Agreement.
If this Agreement is terminated by the Company pursuant to this Section
8(a), the Company shall remain obligated to pay the Consultant (1) Fees for
Services completed and properly billable to the Company through the date of
termination as well as (2) expense reimbursements due and owing to the
Consultant under Section 4 hereof.
(b) Termination by the Consultant. The Consultant may terminate its
consultancy hereunder immediately upon written notice to the Company if any of
the following shall occur:
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(i) any material breach by the Company of its obligations under
this Agreement, which breach is not cured within fifteen (15) days written
notice thereof delivered by the Consultant to the Company;
(ii) any material breach of any representation or warranty made
by the Company in this Agreement; or
(iii) the Company shall become party to any proceeding, whether
voluntary or involuntary, seeking the dissolution, winding up or liquidation of
the Company or substantially all of its assets, or seeking to have a trustee,
receiver, conservator or like party appointed to take control over the Company
or substantially all of its assets.
If the Consultant's consultancy hereunder is terminated by the
Consultant pursuant to this Section 8(b), the Consultant shall have no further
obligation to provide the Services to the Company.
9. Return of Materials. Upon a termination of the Consultant's
consultancy hereunder for any reason, the Consultant shall promptly deliver to
the Company all property belonging to or administered by the Company, including,
without limitation, all documents, manuals, customer, supplier, product and
proprietary lists, data, records, computer programs, codes, materials,
prototypes, products, samples, analyses, reports, marketing materials,
equipment, tools and devices, including all copies or reproductions of the same.
The Consultant further agrees that he shall not make or retain any copy or
extract from such materials.
10. Confidentiality. The Consultant agrees and acknowledges that he may
receive Confidential Information (as defined below) from or regarding the
Company. The Consultant acknowledges and agrees that the Confidential
Information is valuable, special and unique to the Company's business; that such
business depends on such Confidential Information; and that the Company wishes
to protect such Confidential Information by keeping it confidential for the use
and benefit of the Company. The Consultant further acknowledges that any use by
him of the Confidential Information other than in strict accordance with the
terms of this Agreement would be wrongful and would cause the Company
irreparable injury. Based on the foregoing, the Consultant agrees, at all times
both during and after the expiration or termination of the Consultant's
consultancy hereunder:
(i) to keep any and all Confidential Information in trust for the
sole use and benefit of the Company;
(ii) that, except as required by applicable law or as authorized
in writing by the Company, the Consultant will not use or disclose to third
parties, directly or indirectly, any Confidential Information; and
(iii) to take all reasonable steps necessary, or reasonably
requested by the Company, to ensure that all Confidential Information is kept
confidential for the sole use and benefit of the Company.
For purposes of this Section 10, "Confidential Information" means any
and all information developed by or for the Company of which the Consultant
gains or has acquired
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knowledge during or prior to the term of this Agreement that is (i) not
generally known in any industry in which the Company is or may become engaged or
(ii) not publicly available. Confidential Information includes, but is not
limited to, any and all information developed by or for the Company concerning
marketing and sales methods, concepts, materials, products, processes,
procedures, formulae, compounds, formulations, models, innovations, discoveries,
improvements, inventions, protocols, computer programs, records, data, know-how,
techniques, designs, machinery, devices, research and development projects,
data, preparations, business forms, strategies, plans for development of
products, services or expansion into new areas or markets, internal operations,
product price lists, forecasts, projections, financial information (including
the revenues, costs or profits associated with the products of the Company) and
any other trade secrets and proprietary information of any type owned by or
pertaining to the Company, together with all written, graphic, facsimile,
encoded, recorded and other materials relating to all or any part of the same.
11. Taxes. The Consultant shall indemnify and hold the Company harmless
from and against any and all taxes payable by the Company, including interest
and penalties, on or in respect of any payments made to the Consultant by the
Company.
12. Indemnification of the Consultant. Provided that the Consultant is
then in compliance with his obligations hereunder, the Company shall indemnify
the Consultant from and against any losses, costs, damages and judgments, and
will reimburse the Consultant for all fees and expenses (including the
reasonable fees and expenses of counsel), except as otherwise provided below, in
connection with any action, suit or proceeding to which the Consultant may be
made a party by reason of actions taken by the Consultant in the course of
performing the Services, other than any such action, suit or proceeding arising
out of the Consultant's gross negligence or willful misconduct. The Company
shall have the right to assume, with legal counsel of its choice, the defense of
the Consultant in any such action, suit or proceeding for which the Company is
providing indemnification to the Consultant. Should the Consultant determine to
employ separate legal counsel in any such action, suit or proceeding, any costs
and expenses of such separate legal counsel shall be the sole responsibility of
the Consultant.
13. Assignment. Neither this Agreement nor any right or interest
hereunder may be assigned by either party hereto without the prior written
consent of the other party; provided that this Agreement may be assigned by the
Company to any successor of the Company as a result of the Company's merger,
consolidation or similar transaction or the sale of all or substantially all of
its assets. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their heirs, legal representatives and permitted
successors and assigns.
14. Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (a) if personally delivered, on
the business day of such delivery (as evidenced by the receipt of the personal
delivery service), (b) if mailed certified or registered mail return receipt
requested, four (4) business days after being mailed, (c) if delivered by
overnight courier (with all charges having been prepaid), on the business day of
such delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (d) if delivered by facsimile transmission,
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on the business day of such delivery if sent by 6:00 p.m. in the time zone of
the recipient, or if sent after that time, on the next succeeding business day
(as evidenced by the printed confirmation of delivery generated by the sending
party's telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 13), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second business day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:
(i) If to the Company:
Tremor Entertainment, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Ms. Xxxxx Xxxxxx
Fax No.: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
Fax No.: (000) 000-0000
(ii) If to the Consultant:
Xx. Xxxx Xxxxxxx
00000 Xxxxxxxx Xx., Xxx. 000
Xxxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
15. Expenses. Except as otherwise expressly provided in this Agreement,
each party hereto shall pay its own costs and expenses incurred in connection
with or incidental to the preparation and negotiations of this Agreement, the
carrying out of the provisions of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, attorneys' fees
and expenses).
16. Entire Agreement. This Agreement, including any instruments and
other documents delivered pursuant to this Agreement, contain the entire
understanding and agreement of the parties relating to the subject matter hereof
and supersede all prior and/or contemporaneous understandings and agreements of
any kind and nature (whether written or oral) between the parties with respect
to such subject matter.
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17. Severability. The parties agree that should any provision of this
Agreement be held to be invalid, illegal or unenforceable in any jurisdiction,
that holding shall be effective only to the extent of such invalidity,
illegality or unenforceability without invalidating or rendering illegal or
unenforceable the remaining provisions hereof, and any such invalidity,
illegality or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. It is the intent
of the parties that this Agreement be fully enforced to the fullest extent
permitted by applicable law.
18. Waiver. Any waiver by a party hereto, of any breach of or failure to
comply with any provision or condition of this Agreement by the other party
shall not be construed as, or constitute, a continuing waiver of such provision
or condition, or a waiver of any other breach of, or failure to comply with, any
other provision or condition of this Agreement, any such waiver to be limited to
the specific matter and instance for which it is given. No waiver of any such
breach or failure or of any provision or condition of this Agreement shall be
effective unless in a written instrument signed by the party granting the waiver
and delivered to the other party hereto in the manner provided for hereunder in
Section 14. No failure or delay by either party to enforce or exercise its
rights hereunder shall be deemed a waiver hereof, nor shall any single or
partial exercise of any such right or any abandonment or discontinuance of steps
to enforce such rights, preclude any other or further exercise thereof or the
exercise of any other right.
19. Amendments. This Agreement may not be modified, amended, altered or
supplemented, except by a written agreement executed by each of the parties
hereto.
20. Counterparts. This Agreement may be executed in counterparts, each
of which when executed shall be deemed to be an original, and all of which, when
taken together, shall constitute one and the same document. This Agreement shall
become effective when all counterparts shall have been executed and delivered by
the parties.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
TREMOR ENTERTAINMENT, INC.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: Chief Executive Officer
/s/ Xxxx Xxxxxxx
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XXXX XXXXXXX
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