FLUID AUDIO NETWORK, INC. January 1, 2005
Exhibit
10.6
FLUID
AUDIO NETWORK, INC.
January
1, 2005
Xxxxxx
Xxxxxxx
President,
Vizx Corporation
0000
X.
Xx Xxxx Xxx. #000
Xxx
Xxxxxxx, XX 00000
Dear
Xxxxxx:
We
are
pleased to provide Vizx Corporation ("Vizx") with this consulting agreement.
This letter sets forth
the
terms of Vizx's consulting relationship with Fluid Audio Network, Inc. (the
"Company") as well as our understanding with respect to any termination of
this
consulting relationship.
1. Position
and Duties. Vizx
will
provide the Company with the services of Xxxxxx Xxxxxxx ("Xxxxxxx")
as its Chief Executive Officer ("CEO"), who will report to the Board of
Directors of the Company (the "Board"). Vizx accepts that Xxxxxxx shall devote
the majority of his business time, energy and skill to the Company.
His duties will include, but not be limited to, dose duties normally performed
by a CEO, as well as
any
other reasonable duties that may be assigned to him from time to
time.
2. Term.
Vizx's
consulting relationship with the Company will start on January 1, 2005, will
be
for no
specified term, and may be terminated by Vizx or the Company at any time,
with
or without Cause, subject
to the provisions of Paragraph 4 below.
3. Compensation.
Vizx
will be compensated by the Company for its consulting services as
follows:
(a) Salary:
Vizx
will be paid monthly compensation of $8,833.33 on the first of each
month.
(b) Benefits:
Xxxxxxx
will have the right, on the same basis as if he were an employee of
the
Company, to participate in and to receive benefits under any Company medical,
disability or other group
insurance plans, as well as under the Company's business expense reimbursement
and other policies. Vizx, on behalf of Xxxxxxx, will be entitled to no less
than
fifteen (15) days of paid vacation, which Vizx, on behalf
of
Xxxxxxx, will accrue in accordance with the Company's vacation policy. In
addition, Vizx, on behalf
of
Xxxxxxx, shall be entitled to all increases in vacation days according to
the
Company's vacation policy.
(c) Bonus:Vizx,
on
behalf of Xxxxxxx, will be entitled to a performance based bonus for
each
fiscal year during Vizx's consulting relationship. Prior to the start of
each
fiscal year, the Board's Compensation Committee will set a gross revenue
target
for the Company, and if the Company meets and/or exceeds that revenue target
during the applicable fiscal year, Vizx will be entitled to receive a bonus
subject to the decision of the Board's Compensation Committee, payable within
the last week of the applicable fiscal year.
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(d)
Expenses:The
Company will reimburse Vizx for all business expenses within thirty
(30) days of receipt of Vizx's invoice, provided Vizx has furnished such
documentation as the Company
may reasonably request.
4. Termination.
(a) Death:
In
the
event that Vizx's consulting relationship terminates as a result of Xxxxxxx'x
death, Vizx shall be entitled to receive all compensation and benefits earned
and all reimbursements due
under
Paragraph 3 through the effective date of termination.
(b) Disability:
In
the
event that Vizx is no longer able to provide the consulting services
due to illness, accident or other physical or mental condition of Xxxxxxx,
and
such disability is expected
to continue with or without interruption for a period of ninety (90) days
or
longer, the Company may
terminate this Agreement and the Term. Upon such termination, Vizx shall
be
entitled to receive all compensation
and benefits earned and all reimbursements due under Paragraph 3 through
the
effective date of
termination.
(c) With
Company Cause:
The
Company may terminate this Agreement and the Term
for
Company Cause (as defined herein) upon written notice to Vizx. "Company Cause"
shall mean: (i)
gross
negligence or willful misconduct by Vizx in the performance of the consulting
services which has
continued for a period of thirty (30) days following written notice by the
Board
(which notice has been
approved by a majority decision of the Board) of the need to cure such
non-performance; and (ii) the breach
by
Vizx of a material covenant in this Agreement, which breach is uncured for
a
period of thirty (30) days following written notice by the Board (which notice
has been approved by a majority decision of
the
Board) of the need to cure such breach. Upon a termination for Company Cause,
Vizx shall be entitled
to receive all compensation and benefits earned and all reimbursements due
under
Paragraph 3 through
the effective date of termination.
(d) Without
Company Cause:
This
Agreement and the Term may be terminated without
Company Cause by the Company at any time upon written notice to Vizx. Upon
a
termination by the
Company without Company Cause, Vizx shall be entitled to receive all
compensation and benefits earned
and all reimbursements due under Paragraph 3 through the effective date of
termination, as well as a
severance payment equal to eighteen (18) months of Vizx's compensation at
the
time of such termination.
(e) Constructive
Termination:
Vizx may
terminate this Agreement and the Term for Constructive
Termination (as defined herein) upon written notice to the Company.
"Constructive Termination"
in this Paragraph 4(e) shall mean: (i) the breach by the Company of a material
covenant, agreement
or condition contained in this Agreement which breach is uncured for a period
of
ten (10) business days
following written notice by Vizx of the need to cure such breach; (ii) a
change
in Xxxxxxx'x title or reporting
relationship, or a diminution in corporate or signature authority; or (iii)
a
requirement that Xxxxxxx relocate his residence from Los Angeles, California.
Upon a termination of this Agreement and the Term for Constructive Termination,
Vizx shall be entitled to receive all compensation and benefits earned and
all
reimbursements
due under Paragraph 3 through the effective date of termination, as well
as a
severance payment
equal to eighteen (18) months of Vizx's compensation at the time of such
termination.
(f) Voluntary
Termination Without Cause:
This
Agreement and the Term may be terminated
by Vizx at any time without Cause upon thirty (30) days prior written notice
to
the Company. Upon
a
voluntary termination by Vizx without Cause, Vizx shall be entitled to receive
all compensation and benefits earned and all reimbursements due under Paragraph
3 through the effective date of termination.
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5. Repurchase
of Stock. The
Company may repurchase for nominal consideration up to fifteen
percent (15%) of the stock then owned (directly or indirectly) by Vizx in
the
event that, on or before the second anniversary of the Closing Date of the
Offering of Preferred Shares of the Company, pursuant to the
Subscription Agreement for Preferred Shares (the "Closing Date" is defined
therein as February 4, 2005 or
such
other dates as determined by the Company), (a) Vizx has voluntarily terminated
its consulting relationship
with the Company as per Paragraph 4(f) above; or (b) at least one of the
following events has not occurred with respect to the Company: (i) generation
of
revenues of at least One Million Dollars ($1,000,000) or
generation of a run rate of at least One Million Dollars ($1,000,000) for
not
less than one quarter, (ii) the receipt
of a bona fide third party offer to acquire the Company (shares or assets)
at a
price per share or deemed
price per share of not less than Two Dollars ($2), or (iii) the completion
of a
subsequent round of financing at a price per share of not less than Two Dollars
($2).
6. First
Right of Refusal.
In the
event that the Board elects to sell the Company and/or any technology related
thereto, Vizx shall have the exclusive right for a period of ninety (90)
days to
enter into negotiations
with the Company to purchase the Company and/or such technology. In the event
that the parties
are unable to reach an agreement with respect thereto within the ninety (90)
day
period, the Company shall
have the right to enter into negotiations with a third party; provided that
the
Company shall not enter into
any
agreement with such third party with terms more favorable than those last
offered to Vizx.
7. Confidential
and Proprietary Information.
As a
condition of Vizx's consulting relationship with the Company, Xxxxxxx, on
behalf
of himself and Vizx, agrees to sign the Company's standard form of employee
confidentiality and assignment of inventions agreement which is attached
hereto.
8. Dispute
Resolution.
In the
event of any dispute or claim relating to or arising out of Vizx's
consulting relationship with the Company, this agreement, or the termination
of
Vizx's consulting relationship
with the Company for any reason (including, but not limited to, any claims
of
breach of contract, wrongful termination or age, sex, race, national origin,
disability or other discrimination or harassment),
all such disputes shall be submitted to mediation between the parties. In
the
event that the parties are unable to resolve any such disputes within thirty
(30) days thereafter, either party shall have the
right
to bring any action in the State and Federal courts located in Los Angeles,
California, The parties hereby accept service of process as per the notice
provisions herein and neither party will contest the such service
or the venue set forth herein. In addition, the prevailing party in any such
action shall be entitled to
recover attorneys' fees from the other party.
9. Indemnification.
The
Company shall indemnify, defend and hold Vizx and Xxxxxxx harmless
from and against all claims against the Company and/or Vizx and Xxxxxxx.
In
addition, the Company
shall carry directors and officer insurance with a policy limit of no less
than
One Million Dollars ($1,000,000), and the Company shall add Vizx and Xxxxxxx
as
an insured under such policy.
10. Severability.
If any
provision of this Agreement is deemed invalid, illegal or unenforceable,
such
provision shall be modified so as to make it valid, legal and enforceable,
and
the validity, legality and enforceability of the remaining provisions of
this
Agreement shall not in any way be affected.
11. Notice.
Any
notice required or permitted by this Agreement shall be in writing and shall
be
delivered as follows with notice deemed given as indicated: (i) by personal
delivery when delivered personally;
(ii) by overnight courier upon written verification of receipt; (iii) by
telecopy or facsimile transmission
upon acknowledgement of receipt of transmission and copy sent by either of
the
aforesaid means;
or
(iv) by certified or registered mail, return receipt requested, upon
verification of receipt. Notice shall
be
sent to the address set forth above or such other address as either party
may
specify in writing.
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12.
Successors
and Assigns. Vizx
may
not assign, transfer or otherwise delegate its obligations under
this Agreement without the Company's prior written consent. Subject to the
foregoing, this Agreement will be for the benefit of the Company's successors
and assigns, and will be binding on Vizx's assignees. The Company's successors
and assigns shall be bound by the terms and conditions of this
Agreement.
13. Entire
Agreement.
This
Agreement and the agreements referred to above constitute the entire
agreement between Vizx and the Company regarding the terms and conditions
of the
consulting relationship, and they supersede all prior negotiations,
representations or agreements between Vizx and the Company regarding Vizx's
consulting relationship with the Company, whether written or oral.
14. Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
United States and the State of California. Each party consents to the
jurisdiction and venue of the State
or
Federal courts in Southern California, if applicable, in any action, suit,
or
proceeding arising out of or relating
to this Agreement.
15. Modification.
This
Agreement may only be modified or amended by a supplemental written agreement
signed by Vizx and an authorized representative of the Company.
We
look
forward to working with Vizx. Please sign and date this letter on the spaces
provided below to acknowledge Vizx's acceptance of the terms of this
Agreement.
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Sincerely,
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Fluid
Audio Network, Inc.
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By:
/s/ Xxxxxx Xxxxxxx
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Name:
Xxxxxx Xxxxxxx
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Title:
President
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On
behalf
of Vizx, I agree to and accept the consulting relationship with Fluid Audio
Network, Inc. on the terms and conditions set forth in this
Agreement.
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Date:
January 1, 2005
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Vizx
Corporation
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By:
/s/ Xxxxxx Xxxxxxx
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Name:
Xxxxxx Xxxxxxx
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Title:
President
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