Engagement Agreement
Exhibit 10.17
This
Engagement Agreement (the “Agreement”) is made and entered into this 1st day of
July, 2008 between Sahara Media, Inc., and its successor(s) entity in the event
of a reverse merger or reorganization transaction (collectively, the “Client”)
with offices at 00 Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, XX 00000, and Marathon Advisors (“Marathon”). This
agreement sets forth the general terms and conditions pursuant to which Marathon
will provide services to Client.
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1.
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Services. Marathon
shall provide Xxxxx Xxxxxxxxx or another qualified individual to serve as
a consultant to the Client (Marathon and such consultants are collectively
referred to herein as the “Consultant”). The Consultant shall
provide advisory services to the Client to provide guidance to the Client
in the areas of accounting/finance, internal controls and Xxxxxxxx-Xxxxx
compliance (the “Services”). Without limited the
generality of the following, the Consultant is not acting as chief
financial officer or controller for the Client and is not responsible for
maintaining or compiling financial records, preparing financial
statements, performing SEC reporting or other duties typical of a chief
financial officer or controller. The Consultant shall expend
such time as is reasonably necessary to fully perform the Services, up to
a maximum of twenty (20) hours per month, and shall devote his best
efforts, experience and judgment to fully discharge the duties and
responsibilities under this Agreement and as reasonably contemplated
hereby, and shall act in conformity with the written policies of the
Client and within the limits, budgets, business plans and instructions as
set by the Client. Not withstanding anything to the contrary herein,
Consultant shall not be required to devote more than 20 hours per month to
performing its duties pursuant to this Agreement. Consultant
shall be subject to the authority of the Client’s board of directors and
Chief Executive Officer and President and to all provisions of its
Certificate of Incorporation and
Bylaws.
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2.
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Limitation of
Services. It is understood between the parties that the
Consultant is not providing legal services, or independent accounting
services and such services must be retained by the Client, at its own cost
and expense. It is expressly acknowledged that Marathon will utilize best
efforts in performing the Services contemplated hereby but no
representations are made as to the ultimate success of the Client in
carrying out the Client’s business.
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3.
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Term. The
Services shall commence on the effective date of the anticipated reverse
merger with a public shell company or similar reorganization transaction
(the “Effective Date”). The Services shall terminate one year
from the Effective Date. In addition, this Agreement
may be terminated early as follows:
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a) Marathon
may terminate this Agreement with or without cause upon providing 30 days
written notice to the Client.
b) Either
party shall have the right (but not the obligation) to terminate this Agreement
immediately upon written notice to the other, if it reasonably determines that
the other party, or any of its respective directors, officers or controlling
shareholders has engaged in any unlawful, wrongful or fraudulent
act.
c) Marathon
shall have the right (but not the obligation) to terminate this Agreement
immediately upon written notice to the Client, if Marathon shall determine that
any material facts concerning the Client or any of its respective directors,
officers or controlling shareholders represented to Marathon during the course
of performing the Services are misstated or untrue or that the Client
has intentionally failed to provide Marathon with material facts concerning the
Client.
In the
event of early termination of the Agreement, all fees and expenses accrued by
Marathon shall be paid to Marathon within 15 days after termination and all fees
paid to Marathon that were not accrued by Marathon prior to termination shall be
reimbursed to the Client or credited against any outstanding balances owed by
the Client within 15 days after termination.
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4.
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Location. The
Services will be performed both remotely and at the Client’s office site
or other location as the Client shall reasonably
request.
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5.
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Payment. During
the term of this Agreement, Marathon shall be paid cash consideration of
$7,000 per month, with payment due upon the 15th
calendar day of each month. In the event the Effective Date
occurs on a date other than the first calendar day of the month, Marathon
shall be paid a pro-rated amount of the $7,000 for the first month, with
such payment being made within 15 days after the Effective
Date. In addition, Marathon shall be paid equity compensation
in the form of 100,000 shares of the Client’s common
stock. Said equity compensation shall be issued to Marathon and
fully-vested by Marathon within 10 business days of the Effective
Date. In addition, Marathon shall be issued warrants to
purchase 300,000 shares of the Client’s common stock with an exercise
price of $1.10 per share . The warrants shall vest as
follows: 50% on the first 12-month anniversary of the Effective
Date and 50% on the second 12-month anniversary of the Effective
Date. The warrants shall have a 3-year term and a cashless
exercise feature. In addition, provided Marathon presents the
Client with reasonable acceptable proof of such expenses, the Client shall
reimburse Marathon for any reasonable, accountable, out-of-pocket expenses
(the “Reimbursable Expenses”) incurred by Marathon related to travel to
the Client’s office or board meeting locations or any other expenses
incurred related to performing the Services provided in this
Agreement. The Reimbursable Expenses shall be invoiced by
Marathon to the Client, with payment due upon receipt of invoice.
Notwithstanding anything to the contrary herein, any expense in excess of
$500 shall need the prior written approval of the Client in order to be
eligible for reimbursement from the
Client.
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6.
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Independent Contractor
Relationship. The parties understand and agree Marathon
shall perform the Services under this Agreement as an independent
contractor and under no circumstances is Marathon or its employee(s) to be
considered a Client employee or
agent.
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7.
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Non-exclusivity of
Undertakings. Client expressly understands and agrees that Marathon
shall not be prevented or barred from rendering services of the same
nature as or a similar nature to those Services described in this
Agreement, or of any nature whatsoever, for or on behalf of any person,
firm, corporation, or entity other than the Client, provided that the
rendition of such services does not in any way interfere with Marathons’
obligations pursuant to this
Agreement.
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8.
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Mutual
Indemnification. Both parties agree to indemnify and
hold each other harmless for any injuries to persons or property caused by
the intentional and willful acts of each party’s own employees in the
performance of services under this Agreement. Furthermore, the
Client hereby agrees to hold harmless and indemnify Marathon, against any
and all expenses incurred by reason of the fact that Marathon is or was
an, officer, agent, Marathon or advisor of the Client, but only if
Marathon acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interest of the Client and, in the case of a
criminal proceeding, had no reasonable cause to believe that his conduct
was unlawful. The termination of any proceeding by judgment, order of the
court, settlement, conviction, or upon a plea of NOLO CONTENDERE, or its
equivalent, shall not, of itself, create a presumption that Marathon did
not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interest of the Client, and with respect to
any criminal proceeding, shall not create a presumption that such person
or entity believed that his conduct was unlawful. The indemnification
provided herein shall be applicable whether or not negligence or gross
negligence of the Marathon is alleged or proven. Notwithstanding the
foregoing, in the case of any proceeding brought by or in the right of the
Client, Marathon shall not be entitled to indemnification for any claim,
issue or matter as to which the Client has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be
liable to the Marathon or for amounts paid in settlement to the Marathon,
unless and only to the extent that, the court in which the proceeding was
brought or another court of competent jurisdiction determines, on
application, that in view of all the circumstances, the person or entity
is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
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9.
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Confidential
Information. In
consideration of the compensation and benefits to be paid or provided to
the Consultant by the Client under this Agreement, the Consultant
covenants as follows:
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(a) Confidentiality.
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(i) During
and following the Consulting Period, the Consultant will hold in confidence the
Confidential Information and will not disclose it to any person except with the
specific prior written consent of the Client or except as otherwise expressly
permitted by the terms of this Agreement.
(ii) Any
trade secrets of the Client will be entitled to all of the protections and
benefits under any applicable law. If any information that the Client deems to
be a trade secret is found by a court of competent jurisdiction not to be a
trade secret for purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information for purposes of this
Agreement. The Consultant hereby waives any requirement that the Client submit
proof of the economic value of any trade secret or post a bond or other
security.
(iii) None
of the foregoing obligations and restrictions applies to any part of the
Confidential Information that the Consultant demonstrates was or became
generally available to the public other than as a result of a disclosure by the
Consultant.
(iv) The
Consultant will not remove from the Client’s premises (except to the extent such
removal is for purposes of the performance of the Consultant's duties at home or
while traveling, or except as otherwise specifically authorized by the
Corporation) any document, record, notebook, plan, model, component, device, or
computer software or code, whether embodied in a disk or in any other form
(collectively, the "Proprietary Items"). The Consultant recognizes that, as
between the Client and the Consultant, all of the Proprietary Items, whether or
not developed by the Consultant, are the exclusive property of the Client. Upon
termination of this Agreement by either party, or upon the request of the Client
during the Consulting Period, the Consultant will return to the Client all of
the Proprietary Items in the Consultant's possession or subject to the
Consultant's control, and the Consultant shall not retain any copies, abstracts,
sketches, or other physical embodiment of any of the Proprietary
Items.
(b) Consultant
Inventions. Each Consultant Invention will belong exclusively
to the Client. The Consultant acknowledges that all of the
Consultant's writing, works of authorship, and other Consultant Inventions are
works made for hire and the property of the Client, including any copyrights,
patents, or other intellectual property rights pertaining thereto. If
it is determined that any such works are not works made for hire, the Consultant
hereby assigns to the Client all of the Consultant's right, title, and interest,
including all rights of copyright, patent, and other intellectual property
rights, to or in such Consultant Inventions. The Consultant covenants
that he will promptly:
(i) disclose
to the Client in writing any Consultant Invention;
(ii) assign
to the Client or to a party designated by the Client, at the Client’s request
and without additional compensation, all of the Consultant's right to the
Consultant Invention for the United States and all foreign
jurisdictions;
(iii) execute
and deliver to the Client such applications, assignments, and other documents as
the Client may request in order to apply for and obtain patents or other
registrations with respect to any Consultant Invention in the United States and
any foreign jurisdictions;
(iv) sign
all other papers necessary to carry out the above obligations; and
(v) give
testimony and render any other assistance in support of the Corporation's rights
to any Consultant Invention.
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(c) Disputes or
Controversies. The Consultant recognizes that should a dispute
or controversy arising from or relating to this Agreement be submitted for
adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Client, the Consultant, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing.
(d) Definitions.
(a) For
the purposes of this Section 9 (d) , "Confidential Information" shall mean any
and all:
(i) trade
secrets concerning the business and affairs of the Client, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures, and architectures (and related
formulae, compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information, and any other
information, however documented, that is a trade secret;
(ii) information
concerning the business and affairs of the Client (which includes historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, the names and backgrounds
of key personnel, personnel training and techniques and materials, however
documented; and
(iii) notes,
analysis, compilations, studies, summaries, and other material prepared by or
for the Client containing or based, in whole or in part, on any information
included in the foregoing.
(b) For
the purposes of this Section 9 (d), "Consultant Invention" shall mean any idea,
invention, technique, modification, process, or improvement (whether patentable
or not), any industrial design (whether registerable or not), any mask work,
however fixed or encoded, that is suitable to be fixed, embedded or programmed
in a semiconductor product (whether recordable or not), and any work of
authorship (whether or not copyright protection may be obtained for it) created,
conceived, or developed by the Consultant, either solely or in conjunction with
others, during the Consulting Period, or a period that includes a portion of the
Consulting Period, that relates in any way to, or is useful in any manner in,
the business then being conducted or proposed to be conducted by the
Corporation, and any such item created by the Consultant, either solely or in
conjunction with others, following termination of the Consultant's Consulting
Arrangement with the Corporation, that is based upon or uses Confidential
Information.
(10)
Entire Agreement. This Agreement, as will as any written amendments,
shall constitute the entire Agreement between the parties and supersedes all
previous communication, representations, understandings, concurrent or
subsequent purchase orders, and agreements, whether oral or written, between the
parties or any officer or representative of the parties. The Client
has not relied upon any representations other than those set forth in this
Agreement.
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(11)
Notices. Any notice or other communication required or permitted by
any provision of this Agreement shall be in writing and shall be deemed to have
been given or served for all purposes if delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the parties as follows:
To
Client:
Attention: Xxxxxxxx
Xxxxxxxx
00
Xxxxxxxx Xxxxxx 0xx
Xxxxx
Xxx Xxxx,
XX 00000
Copies
to:
Xxxx
Xxxx, Esq.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
To
Marathon:
Xxxxx X.
Xxxxxxxxx
0000
Xxxxxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxx 00000
(12)
Severability. If
any provision of this Agreement is determined to be unenforceable or invalid,
the remaining provisions of this Agreement shall remain in full force and
effect.
(13)
Counterparts:
This Agreement may be executed in two or more counterparts; each of which shall
be deemed an original, but all of which together shall be deemed an original,
and all of which together shall constitute one and the same instrument.
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(14) CHOICE
OF LAW. This Agreement shall be interpreted and performed in
accordance with the laws of the State of New York, and the parties agree,
notwithstanding the principles of conflicts of law, that the internal laws of
the State of New York shall govern and control the validity, interpretation,
performance, and enforcement of this Agreement. Any action brought by
either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. The parties and the
individuals executing this Agreement and other agreements referred to herein or
delivered in connection herewith on behalf of the Client agree to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs.
Marathon
Sahara Media,
Inc.
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By
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By
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Name
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Xxxxx
X. Xxxxxxxxx
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Name
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Xxxxxxxx
Xxxxxxxx
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Its
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President
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