CONSULTANT AGREEMENT
This
Consultant Agreement (the “Agreement”)
is made
and entered into as of April 20, 2007 (the “Effective
Date”),
by
and between Handheld Entertainment, Inc., a Delaware corporation (the
“Company”),
and
Xxxxxx X’Xxxxx, an individual having an address at 0 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxx, Xxxxxx Xxxxxxx XX00 0XX (“Consultant”).
WHEREAS,
Dorks LLC, a Washington limited liability and a wholly owned subsidiary of
the
Company, has entered into an asset purchase agreement, dated even date herewith
(the “Purchase
Agreement”),
to
acquire the assets and business of Xxxxxxxxx.xxx (the “Business”),
from
Consultant; and
WHEREAS,
the Company desires to engage Consultant to assist the Company with the
transition of the Business and to advise the Company regarding the Business,
and
Consultant desires to be engaged by the Company for such purposes.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Engagement
of Services.
The
Company hereby retains Consultant, and Consultant hereby agrees to be retained
to render services to the Company, upon the terms and conditions set forth
herein.
2. Services.
During
the Term (as defined in Section 12 below), Consultant agrees to devote no less
than forty (40) hours per week (i) advising the Company regarding the transition
of the Business; and (ii) managing the Business, which will include, among
other
things, updating the Xxxxxxxxx.xxx website with media content, maintaining
link
trades, answering user questions, and, in general, ensuring that the Business
is
properly functioning (the “Services”).
The
Company and Consultant expect that Consultant will render such services remotely
(i.e., outside of the United States). However, Consultant agrees to be available
to render the Services to the Company for a period of no less than one (1)
week
per calendar month at the Company’s San Francisco office (the “On-Site
Services”),
at
such times as reasonably requested by the Company. Consultant agrees that in
performing the Services, he will neither undertake nor cause, nor permit to
be
undertaken, any activity which is illegal under any applicable law or would
have
the effect of causing the Company to be in violation of any applicable
laws.
3. Compensation;
Reimbursement.
Consultant will be entitled to a consulting fee of $2,000 per calendar month
for
each month during the Term (the “Fee”)
for
the Services rendered to the Company. The Fee (or pro rata portion thereof
as
will have been earned by Consultant at such time) will be payable by the Company
monthly. The Company will reimburse Consultant for all out-of-pocket business
expenses reasonably incurred in connection with the performance of the Services
during the Term within thirty days of submission of evidence of such expenses
in
a form satisfactory to the Company. Expenses in excess of $250 in the aggregate,
incurred in a single month, excluding travel and lodging expenses incurred
in
connection with the On-Site Services, will require separate prior written
approval from the Company.
4. Independent
Contractor Relationship.
Consultant will at all times be acting and performing hereunder as an
independent contractor, and nothing in this Agreement is intended to, or should
be construed to, create a partnership, agency, joint venture or employment
relationship. Consultant is not authorized to make any representation, contract
or commitment on behalf of the Company unless specifically requested or
authorized in writing to do so by the Company. Consultant will not have any
authority to bind the Company, nor will the Company be able to bind Consultant
in any manner nor will either party hereto incur any liability as a result
of
the other party’s actions or inactions with respect to any third party.
Consultant will at all times disclose that he is an independent contractor
of
the Company and will not represent to any third party that he is an employee,
agent, partner, co-venturer or representative of the Company. Consultant will
not be entitled to any of the benefits which the Company may make available
to
its employees, including, but not limited to, group health or life insurance,
profit-sharing or retirement benefits. The Company will not withhold any funds
from Consultant for tax or other governmental purposes, and Consultant will
be
solely responsible for the payment of same and the filing of all tax returns
with any U.S. or foreign tax authority. Consultant is solely responsible for
maintaining adequate records of expenses incurred in the course of performing
the Services hereunder.
5. Confidential
Information; Company Property.
Consultant recognizes, acknowledges and agrees that secret, proprietary and
confidential information regarding the Company and its affiliates, including
without limitation, information relating to or concerning its business,
products, intellectual property, customers, suppliers, sources of leads,
financial information, data or condition, market research and development,
processes, techniques, know-how, business plans and results, strategies,
pricing, prospects, technology, software and all other business information
(the
“Confidential
Information”)
is a
valuable, special and unique asset of the Company, and that such Confidential
Information is received by Consultant in confidence as a fiduciary. Accordingly,
Consultant will not, at any time, during or after the Term, use or disclose
to
any person or entity, and will keep confidential, any and all Confidential
Information. Consultant agrees upon termination or expiration of this Agreement
for any reason, to immediately return to the Company all property of the
Company, in Consultant’s possession, including, but not limited to, all books,
records, papers, computer disks, thumb drives, equipment, customer lists, sales
figures and forecasts, designs relating to the business of the Company and
its
affiliates. All references to the Company in Sections 5 through 9 hereof will
include the Company and its subsidiaries, and any future, direct or indirect,
parent of the Company, or successor(s) thereto.
6. Right
to Inventions.
6.1 Consultant
will promptly disclose, grant and assign to the Company for its sole use and
benefit any and all marks, designs, logos, inventions, improvements, technical
information and suggestions relating in any way to the business conducted by
the
Company, and Xxxxxxxxx.xxx, which Consultant may develop or which may be
acquired by Consultant during the Term, together with all trademarks, patent
applications, letters, patents, copyrights and reissues thereof that may at
any
time be granted for or upon any such xxxx, design, logo, invention, improvement
or technical information (collectively, "Inventions").
In
connection therewith, Consultant will (at the Company’s sole cost and expense)
take all actions requested by the Company to assign and/or confirm the
assignment of any Invention to the Company.
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6.2 To
the
extent any of the rights, title and interest in, to and under Inventions cannot
be assigned by Consultant to the Company, Consultant hereby grants to the
Company an exclusive, royalty-free, transferable, irrevocable, worldwide license
(with rights to sublicense through multiple tiers of sublicensees) to practice
such non-assignable rights, title and interest. To the extent any of the rights,
title and interest in and to Inventions can neither be assigned nor licensed
by
Consultant to the Company, Consultant hereby irrevocably waives and agrees
never
to assert such non-assignable and non-licensable rights, title and interest
against the Company, or any of its affiliates and each of their successors
in
interest to such non-assignable and non-licensable rights. Consultant hereby
grants to the Company or the Company’s designees, a royalty free, irrevocable,
worldwide license (with rights to sublicense through multiple tiers of
sublicensees) to practice all applicable patent, copyright, moral right, mask
work, trade secret and other intellectual property rights relating to any prior
inventions which Consultant incorporates, or permits to be incorporated, in
any
Inventions. Notwithstanding the foregoing, Consultant agrees that he will not
incorporate, or permit to be incorporated, any prior inventions of Consultant
in
any Inventions without the Company’s prior written consent.
7. Future
Innovations.
The
Consultant recognizes that Inventions relating to his activities during the
Term
and conceived, reduced to practice, created, derived, developed, or made by
Consultant, alone or with others, within six (6) months after termination or
expiration of the Term may have been conceived, reduced to practice, created,
derived, developed, or made, as applicable, in significant part while in the
service of the Company. Accordingly, Consultant agrees that such Inventions
will
be presumed to have been conceived, reduced to practice, created, derived,
developed, or made, as applicable, during the Term and will be promptly assigned
to the Company.
8. Cooperation
in Perfecting Rights to Proprietary Information and Innovations.
8.1 Consultant
agrees to perform, during and after the Term, all acts deemed necessary or
desirable by the Company to permit and assist the Company, at the Company’s
expense, in obtaining and enforcing the full benefits, enjoyment, rights and
title throughout the world in the Inventions assigned or licensed to, or whose
rights are irrevocably waived and will not be asserted against, the Company
under this Agreement. Such acts may include, but are not limited to, execution
of documents and assistance or cooperation (i) in the filing, prosecution,
registration, and memorialization of assignment of any applicable patents,
copyrights, mask work, or other applications, (ii) in the enforcement of any
applicable patents, copyrights, mask work, moral rights, trade secrets, or
other
proprietary rights, and (iii) in other legal proceedings related to the
Inventions.
8.2 In
the
event that the Company is unable (after reasonable efforts) to secure
Consultant’s signature to any document required to file, prosecute, register, or
memorialize the assignment of any patent, copyright, mask work or other
applications or to enforce any patent, copyright, mask work, moral right, trade
secret or other proprietary right under any Inventions (including derivative
works, improvements, renewals, extensions, continuations, divisionals,
continuations in part, continuing patent applications, reissues, and
reexaminations thereof), Consultant hereby irrevocably designates and appoints
the Company and the Company’s duly authorized officers and agents as his agents
and attorneys-in-fact to act for and on his behalf and instead of him, (i)
to
execute, file, prosecute, register and memorialize the assignment of any such
application, (ii) to execute and file any documentation required for such
enforcement, and (iii) to do all other lawfully permitted acts to further the
filing, prosecution, registration, memorialization of assignment, issuance,
and
enforcement of patents, copyrights, mask works, moral rights, trade secrets
or
other rights under Inventions, all with the same legal force and effect as
if
executed by Consultant.
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9. Covenant
Not To Compete or Solicit.
9.1 The
Consultant recognizes that the services to be performed by him hereunder are
special, unique and extraordinary. The parties hereto agree and acknowledge
that
it is necessary for the protection of the Company that the Consultant agree,
and
accordingly, the Consultant does hereby agree, that he will not, directly or
indirectly, at any time during the “Restricted Period” within the “Restricted
Area” (as those terms are defined in Section 9.5 below):
(a) Engage,
directly or indirectly, in any line of business in which the Company was engaged
or plans to engage in during the period of Consultant’s service to the Company,
including but not limited to the business of owning and operating user-generated
content entertainment websites, either on his own behalf or as an officer,
director, stockholder, member, manager, partner, consultant, associate,
employee, owner, agent, creditor, independent contractor, investor or
co-venturer of any third party; provided, however, Consultant’s ownership and
operation, directly or indirectly through other entities, of one or more
websites to promote online games will not be prohibited by this Section 9;
or
(b) solicit
to employ or engage, for or on behalf of himself or any third party, any
employee or agent of the Company.
9.2 Consultant
hereby agrees that he will not, directly or indirectly, for or on behalf of
himself or any third party, at any time during the Term and during the
Restricted Period, solicit any customers of the Company.
9.3 If
any of
the restrictions contained in this Section 9 are deemed to be unenforceable
by
reason of the extent, duration or geographical scope thereof, or otherwise,
then
the court making such determination will have the right to reduce such extent,
duration, geographical scope, or other provisions hereof, and in its reduced
form this Section 9 will then be enforceable in the manner contemplated
hereby.
9.4 This
Section 9 will not be construed to prevent Consultant from owning, directly
or
indirectly, in the aggregate, an amount not exceeding one percent (1%) of the
issued and outstanding voting securities of any class of any corporation whose
voting capital stock is traded or listed on a national securities exchange
or
quoted in the over-the-counter market.
9.5 The
term
“Restricted Period,” as used in this Section 9, means the later of the
expiration of the APA Restricted Period or the Term, plus twelve (12) months
after the termination or expiration of the Term. The term “Restricted Area” as
used in this Section 9 means the entire world.
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10. Observance
of Company Rules.
At all
times while on the Company’s premises, Consultant will observe the Company’s
rules and regulations with respect to conduct, health and safety and protection
of persons and property.
11. No
Conflict of Interest.
During
the Term, Consultant will not accept work, enter into an agreement, or accept
an
obligation, inconsistent or incompatible with Consultant’s obligations, or the
scope of services rendered for Company, under this Agreement. Consultant
represents and warrants to the Company that there is no understanding,
arrangement or obligation to which Consultant is a party or bound which
conflicts with or is inconsistent with Consultant’s obligations under this
Agreement or which violates the rights of any third party. Consultant agrees
to
indemnify and hold harmless the Company and its affiliates from any and all
loss
or liability incurred by reason of the alleged breach by Consultant of any
agreement with any third party.
12. Term
and Termination.
12.1 Term.
This
Agreement is effective as of the Effective Date set forth above and will
continue for twenty-four (24) consecutive months thereafter, unless sooner
terminated pursuant to the provisions of the Agreement (the “Term”).
12.2 Termination.
Either
party may terminate this Agreement with or without cause, at any time, for
whatever reason or no reason, upon 30 days prior written notice delivered to
Consultant of such termination.
12.3 Survival.
Neither
the termination or expiration of this Agreement, nor of Consultant’s engagement
hereunder, will terminate or affect in any way, any provision of this Agreement
that is intended by its terms to survive such termination, including without
limitation, the provisions of Sections 5 through 9.
13. General
Provisions.
13.1 Successors
and Assigns.
The
provisions of this Agreement will be binding upon, and will inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns. Notwithstanding the immediately prior sentence,
Consultant may not subcontract or otherwise delegate his obligations under,
or
assign, this Agreement without the Company’s prior written consent.
13.2 Notices.
Any
notice required or permitted by this Agreement will be in writing and will
be
delivered as follows, with notice deemed given as indicated: (a) by personal
delivery, on the date of such delivery; (b) by nationally-recognized overnight
courier, on the next business day after the date sent; (c) by telecopy or
facsimile transmission, when sent upon receipt of acknowledgment of receipt
of
electronic transmission; or (d) by certified or registered mail, return receipt
requested, on the fifth business day from the date sent. Notice will be sent
to
the addresses set forth in the Purchase Agreement or to such other address
as
either party may specify in writing.
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13.3 Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
State of California without reference to principles of conflicts of laws. Each
of the parties irrevocably consents to the exclusive personal jurisdiction
of
the federal and state courts located in San Francisco County, California, with
respect to any claim, controversy, or dispute related to the enforcement or
interpretation of this Agreement.
13.4 Severability.
If any
provision of this Agreement is finally determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable to any extent, then (i)
such objectionable provision will be deemed amended to the extent necessary
so
as to make it legal, valid, and enforceable, and (ii) the legality, validity
and
enforceability of the remaining provisions of this Agreement will not be
affected or impaired thereby.
13.5 Waiver;
Amendment; Modification.
No term
or provision hereof will be considered waived by Company, and no breach excused
by Company, unless such waiver or consent is in writing signed by Company.
The
waiver by Company of, or consent by Company to, a breach of any provision of
this Agreement by Consultant, will not operate or be construed as a waiver
of,
consent to, or excuse of any other or subsequent breach by Consultant. This
Agreement may be amended or modified only by mutual consent of the parties
hereto in writing.
13.6 Injunctive
Relief.
Consultant acknowledges that Consultant’s breach or threatened breach of any
provision, representation, warranty or covenant of this Agreement will result
in
irreparable and continuing damage to the Company for which there will be no
adequate remedy at law, and Consultant agrees that, in the event of such breach,
or threatened breach, the Company will be entitled, in addition to any other
rights and remedies the Company may have at law or in equity, without posting
any bond, to an injunction enjoining and restraining the Consultant from doing
or continuing to do any act which violates this Agreement.
13.7 Entire
Agreement.
This
Agreement and the Purchase Agreement constitute the entire agreement between
the
parties with respect to the subject matter hereof and supersedes all prior
or
contemporaneous agreements, understandings or arrangements between the parties
hereto, whether oral or written, between the parties with respect thereto.
13.8 Use
of
Counsel.
Each of
the parties hereto represents that he or it has consulted with competent counsel
of his or its own choosing in connection with the negotiation and execution
of
this Agreement.
13.9 Counterparts.This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first written above.
“Company”
|
“Consultant”
|
|
|
By: /s/
Xxxxxxx X.
Xxxx
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
|
/s/
Xxxxxx
X’Xxxxx
XXXXXX
X’XXXXX
|
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