EXHIBIT 10.1
CONSULTING AGREEMENT
Consulting Agreement, dated as of October 18, 2002 and effective as of
January 1, 2003 (the "Effective Date") between MEH Consulting Services, Inc.
(the "Consultant") and MediaBay, Inc. ("MediaBay" or the "Company").
1. Consultant's Services. MediaBay hereby engages Consultant to provide to
MediaBay, and Consultant agrees to provide to MediaBay under the terms of this
Agreement, the following consulting services: advice and strategy relating to
the Company's business, including but not limited to, its markets, competition,
member acquisition activities, licensing activities, distribution partners,
pricing strategy, product offerings, technology, and such other advice and
strategy as may be required from time to time by the Company (hereinafter the
"Services") during the Term (defined below). Consultant shall cause Xxxxxxx
Xxxxxxx ("Xxxxxxx") to provide the Services. During the Term, Consultant shall
devote a minimum of 30 hours per week (determined for any week by averaging the
number of hours devoted over any consecutive 10-week period). The Services shall
be performed under the direct supervision of the Board of Directors of the
Company (the "Board") and shall be performed at such times and places and in
such manner (whether by conference, telephone, electronic communication or
otherwise) as Consultant may determine. It is understood and agreed that while
serving as a consultant to MediaBay hereunder, Consultant may, on a part-time
basis, engage in any business or employment activities in any field either for
his own account or for the account of others subject to the provisions of
Section 3 below. The Company shall provide Consultant with the use of the office
Xxxxxxx previously used and secretarial services.
2. Compensation; Reimbursement of Expenses. Consultant shall render the
Services during the period from the Effective Date through December 31, 2003
(the "Term"). In exchange for the performance of the Services, and specifically
for the covenants contained in Sections 3, 4 and 5 hereof, MediaBay shall pay
Consultant a fee at the rate of $16,666 per month. In addition, MediaBay will
reimburse Consultant for the business expenses (including, without limitation,
cell phone, wireless PDA, laptop, internet service provider and travel expenses,
to the extent such expenses relate to Consultant's performance of the Services)
it actually incurs in the performance of the Services hereunder, provided that
the business expenses are fully documented, reasonable and necessary, and, if an
expense is in excess of $2,500, approved in advance by MediaBay. During the
Term, the Company shall provide Consultant with use of the automobile previously
used by Xxxxxxx, and the Company shall make all lease payments and shall pay all
expenses maintaining and insuring the automobile.
3. Noncompetition Covenant. During the period of this Agreement, neither
Consultant nor Xxxxxxx shall engage in any business activity on behalf of an
entity which is a direct competitor of MediaBay without obtaining the prior
written authorization of MediaBay.
4. Nonsolicitation of Employees. During the period of this Agreement,
neither Consultant nor Xxxxxxx shall directly or indirectly, recruit or attempt
to recruit any person who is employed by MediaBay.
5. Nondisclosure Obligation. Neither Consultant nor Xxxxxxx shall at any
time, whether during or two (2) years after the termination of this Agreement,
use or reveal to any person or entity any trade secrets or confidential
information of MediaBay or any trade secrets or confidential information of any
third parties which MediaBay is under an obligation to keep confidential, except
to employees of MediaBay who need to know such information for the purposes of
their employment, or as otherwise authorized by MediaBay in writing.
Confidential information includes, but is not limited to, customer or member
databases, terms of licensing arrangements, know how, marketing plans and
strategies, pricing and costing policies, customer and suppliers lists and
accounts, nonpublic financial information, systems, processes, software
programs, works of authorship, inventions, projects, plans and proposals.
Neither Consultant nor Xxxxxxx shall use or disclose any material non-public
information discovered about MediaBay, whether through the rendering of Services
or otherwise. Consultant and Xxxxxxx shall keep secret all matters entrusted to
Consultant or Xxxxxxx and shall not use or attempt to use any confidential
information except as may be required in the ordinary course of performing
Consultant's Services as a consultant of MediaBay, nor shall Consultant or
Xxxxxxx use any confidential information in any manner which may cause loss or
is calculated to cause loss to MediaBay. Notwithstanding the foregoing
sentences, such confidential information does not include (i) information which
is or becomes publicly available (except as may be disclosed in violation of
this Agreement) or (ii) information acquired by Consultant or Xxxxxxx from a
source other than the Company or any of its employees, which source acquired
such information directly from the Company without a breach of any
confidentiality obligation between such source and the Company; or (iii)
information which Consultant or Xxxxxxx is required to disclose by virtue of
subpoenas, court orders or otherwise as a matter of law.
6. Termination.
(a) This Agreement may not be terminated by MediaBay except "for just
cause" as outlined below. The Company may terminate Consultant's engagement
hereunder "for just cause" at any time during the term of this Agreement upon
thirty (30) days' advance written notice and, in the case of Item (c) below,
provided that Consultant has not begun to cure such breach during such thirty
(30) day period. Termination of Consultant's engagement by the Company shall
constitute a termination "for just cause" under this Section if such termination
is for one or more of the following causes: (a) willful misconduct of Consultant
or Xxxxxxx in connection with the performance of the Services, (b) the
conviction of Consultant or Xxxxxxx of a felony, either in connection with the
performance of its obligations to the Company, or which shall adversely affect
Consultant's or Xxxxxxx'x ability to perform such obligations; (c) a breach of
Section 3, 4 or 5 of this Agreement; or (d) the commission of an act of
embezzlement, fraud or deliberate disregard of the rules or policies of the
Company which results in material loss, damage or injury to the Company. In the
event of a termination "for just cause" pursuant to the provision above,
Consultant shall be entitled to no further benefits other than payment of
amounts owed to Consultant through the date of such termination.
(b) This Agreement may be terminated by Consultant upon thirty (30) days
notice to the Company. In the event of termination by Consultant, Consultant
shall be entitled to no further benefits other than payment of amounts owed to
Consultant through the date of such termination.
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7. Independent Contractor. It is expressly understood and agreed that
during the term of this Agreement, the Consultant's relationship to MediaBay
will be that of an independent contractor and that neither this Agreement nor
the services to be rendered hereunder shall for any purpose whatsoever or in any
way or manner create, expressly or by implication, any employer-employee
relationship, partnership, joint venture or other relationship with MediaBay
other than that of independent parties contracting with each other solely for
the purpose of carrying out the provisions of the Agreement. The Consultant and
Xxxxxxx shall have sole responsibility for the payment of all federal, state and
local income taxes and for Social Security and other similar taxes with respect
to any compensation provided by MediaBay hereunder. Neither the Consultant nor
Xxxxxxx is authorized to bind MediaBay, or to incur any obligation or liability
on behalf of MediaBay, except as expressly authorized by MediaBay in writing.
The Consultant understands and agrees that the work to be performed is not
covered under the unemployment compensation laws and that the work to be
performed is not intended to be covered by applicable worker's compensation
laws.
8. Insurance and Employee Benefits. Xxxxxxx shall be entitled to receive
insurance and employee benefits applicable to all officers of the Company, to
the extent permitted by any benefit plan now or hereinafter in effect.
9. Miscellaneous.
(a) This Agreement contains, and is intended as, a complete statement of
all of the terms of the arrangement between the parties with respect to its
subject matter and supersedes all previous negotiations, promises, agreements
and understandings with respect to those matters, whether oral or written.
(b) Consultant represents that its performance of all the terms of this
Agreement does not and will not breach any non-competition agreement and/or
agreement to keep in confidence proprietary information, knowledge or data
acquired by Consultant in confidence from other entities besides MediaBay, and
Consultant will not disclose to MediaBay or induce MediaBay to use any
confidential or proprietary information or material belonging to others.
(c) No provision of this Agreement shall be waived, amended, modified,
superceded, canceled, terminated, renewed or extended except in a written
instrument signed by the party against whom any of the foregoing actions is
asserted. Any waiver shall be limited to the particular instance and for the
particular purpose when and for which it is given.
(d) Consultant hereby agrees that each provision herein shall be treated as
a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses of the
Agreement. Moreover, if one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to scope,
activity, subject or otherwise so as to be unenforceable at law, such provision
or provisions shall be construed by the appropriate judicial body by limiting or
reducing it or them, so as to be enforceable to the maximum extent compatible
with the applicable law as it shall then appear. Consultant hereby further
agrees that the language of all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for or
against either of the parties.
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(e) This Agreement, the Services to be performed and all rights hereunder
are unique to Consultant and Xxxxxxx and may not be performed on Consultant's
behalf by any person other than Xxxxxxx and may not be transferred or assigned
by Consultant or by the Company at any time.
(f) This Agreement shall be construed and enforced in accordance with the
internal laws of the State of New Jersey without reference to its conflicts of
laws provisions.
IN WITNESS WHEREOF, the parties hereby execute this Agreement this 18th day
of October 2002.
MEH CONSULTING SERVICES, INC. MEDIABAY, INC.
/s/ Xxxxxxx Xxxxxxx By /s/ Xxxx X. Xxxx
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Xxxxxxx Xxxxxxx Name: Xxxx X. Xxxx
Title: Executive Vice President/
Chief Financial Officer
AGREED AND ACCEPTED
AS TO SECTIONS 3, 4 AND 5
/s/Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, individually
