Exhibit 10.7
CONSULTING AGREEMENT
Consulting Agreement dated as of February 28, 2007, between Xxxx
Xxxxxx Productions, Inc., a Nevada corporation (the "Company") and D& L
Partnership, a Nevada general partnership having an office at 0000 Xxxxxxxxx
Xxx, Xxx Xxxxx, Xxxxxx 00000 (the "Consultant").
Whereas, Sibling Theatricals, Inc., a Delaware corporation and a
wholly owned subsidiary of Sibling Entertainment Group, Inc., a New York
corporation ("Sibling") has entered into a stock purchase agreement among the
Company, Sibling, the Consultant and others (as stockholders of the Company)
pursuant to which Sibling has acquired eighty percent of the Company's issued
and outstanding common stock (the "Stock Purchase Agreement"); all capitalized
terms used herein and not otherwise defined shall have the meaning ascribed
thereto in the Stock Purchase Agreement;
Whereas, the effective date for this Agreement shall be ninety (90) days
after the Closing Date of the Stock Purchase Agreement (the "Effective Date");
Whereas, Xxxx Xxxxxx and Xxxxx Xxxxxx are the sole general partners of the
Consultant;
Whereas, each of Xxxx Xxxxxx and Xxxxx Xxxxxx is currently engaged by the
Company as an employee of the Company, and will continue as an employee, at the
discretion of the Company, until the Effective Date;
Whereas, the execution and delivery of this Agreement is a condition to
the consummation of the transactions contemplated by the Stock Purchase
Agreement;
Whereas, the Company desires to continue to engage the Consultant under
this agreement for three (3) years from the Effective Date for the purpose of
having each of Xxxx Xxxxxx and Xxxxx Xxxxxx to continue to perform substantially
the same services for the Company (subject to Section 14) as they are currently
providing as employees of the Company, and the Consultant desires to perform
such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Term
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The Company agrees to employ the Consultant, and the Consultant
agrees to serve, on the terms and conditions of this Agreement for a period
commencing with from the Effective date and ending three (3) years from the
Effective date, or such shorter period as may be provided for herein. This
period during which the Consultant is employed hereunder is hereinafter referred
to as the "Consulting Period." However, if the Closing under the Stock Purchase
Agreement shall not take place by March 31, 2007, or such other date as may be
permitted under the terms of the Stock Purchase Agreement, then this Agreement
and all obligations of each party hereunder shall immediately terminate as of
the date hereof and as if never entered into. Six months prior to the end of the
Consulting Period, the Company and the Consultant shall enter into negotiations
regarding the possible extension of the Consulting Period. However, if such
negotiations are not concluded within ninety days from the commencement of such
negotiations, this Agreement shall terminate in accordance with the terms of
this Agreement.
2. Duties and Services
During the Consulting Period, the Consultant shall be retained by
the Company as and shall continue to cause each of Xxxx Xxxxxx and Xxxxx Xxxxxx
to assume such duties and responsibilities as from time to time may be assigned
to each of them by the Company consistent however with the services heretofore
provided by each of Xxxx Xxxxxx and Xxxxx Xxxxxx to the Company. The Consultant
agrees to devote all efforts and skills to the performance of its duties under
this Agreement and will use its best efforts to promote the success of the
Company's business, and will cooperate fully with the Board of Directors in the
advancement of the best interests of the Company; provided, however, that
neither Xxxx Xxxxxx nor Xxxxx Xxxxxx shall be required to expend any more time
then he or she is currently expending on behalf of the Company in the
fulfillment of their respective responsibilities. Each of Xxxx Xxxxxx and Xxxxx
Xxxxxx shall be available to travel as the reasonable needs of the business
require. The Consultant shall report to, and assume such duties and
responsibilities as are assigned to him or her by, the Board of Directors of the
Company, or such other person as shall be designated by the Board of Directors
of the Company. If elected a director or officer of the Company each of Xxxx
Xxxxxx and Xxxxx Xxxxxx will fulfill his or her duties, as the case may be, as
such director or officer without additional compensation.
3. Compensation
(a) As full compensation for its services hereunder, the Company
shall pay the Consultant, an annual fee of $350,000 payable in 12 equal monthly
installments commencing on the Effective Date.
(b) In addition, each of Xxxx Xxxxxx and Xxxxx Xxxxxx shall
participate in the present and future employee benefit plans of the Company if
each meets the eligibility requirements therefor. Each of Xxxx Xxxxxx and Xxxxx
Xxxxxx shall continue to have use of the car currently leased for their use by
the Company and upon termination of any lease of such car, the employee shall be
provided with a new leased car of equal quality, or an allowance of no less than
$1,000 per month during the balance of the Consulting Period.
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(c) Each of Xxxx Xxxxxx and Xxxxx Xxxxxx will be entitled to four
(4) weeks paid vacation for each twelve month period ("Employment Year") during
the Consulting Period in accordance with the vacation policies established by
the Company for its executive officers from time to time. Each of Xxxx Xxxxxx
and Xxxxx Xxxxxx will also be entitled to paid holidays as set forth in the
Company's policies. Vacation days and holidays during any such Employment Year
may not be used for any subsequent Employment Year.
4. Expenses The Consultant shall be entitled to reimbursement for
reasonable travel and other out-of-pocket expenses necessarily incurred by each
of Xxxx Xxxxxx and Xxxxx Xxxxxx in the performance of his or her duties
hereunder, upon submission and approval of written statements and bills in
accordance with the then regular procedures of the Company.
5. Representations, Warranties and Covenants of the Consultant (a)
The Consultant represents and warrants to the Company that (a) neither the
Consultant nor either of Xxxx Xxxxxx and Xxxxx Xxxxxx is under a contractual
obligation or other restriction or obligation which is inconsistent with the
execution of this Agreement, the performance of its duties hereunder, or the
other rights of the Company hereunder, and (b) the principals of the Consultant,
Xxxx Xxxxxx and Xxxxx Xxxxxx, are under no physical or mental disability that
would hinder their performance of duties under this Agreement.
(b) During the Consulting Period, the Consultant will not admit any
additional entities as general partners.
(c) The obligations of the Consultant and the services to be
provided by each of Xxxx Xxxxxx and Xxxxx Xxxxxx pursuant hereto may not be
delegated and or performed by any other person or entity without prior written
consent of Sibling.
6. Non-Competition
(a) The Company, Sibling, the Consultant, and each of Xxxx Xxxxxx and
Xxxxx Xxxxxx pursuant to the Stock Purchase Agreement, have entered into a
non-compete agreement (the "Non-Compete Agreement") which imposes certain
restrictions and conditions on the Consultant's ability to engage in business
activities that are competitive to those business activities engaged in by the
Company. The Consultant and each of Xxxx Xxxxxx and Xxxxx Xxxxxx acknowledges
that, in view of their respective knowledge of the affairs, trade secrets,
customers, potential customers and business information of the Company and
Sibling, and such knowledge that he will acquire about the Company and Sibling,
the nature of the businesses of the Company and Sibling and the business
objectives of the Company and Sibling, and the consideration paid to the
Consultant hereunder and under the Stock Purchase Agreement, the restrictions
contained in the Non-Compete Agreement are reasonably necessary to protect the
legitimate business interest of the Company and the Sibling Corporations.
(b) If any restriction contained in this Section 6, or in Sections 8 or 9,
shall be deemed to be invalid, illegal, or unenforceable by reason of the
extent, duration, or geographical scope thereof, or otherwise, then the court
making such determination shall have the right to
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reduce such extent, duration or geographical scope, or other provisions thereof,
and in its reduced form such restrictions shall be enforceable in the manner
contemplated hereby.
(c) For purposes of this Section 6, and Sections 7 and 8 hereof, phrases
such as "during the period of the Consultant's engagement by the Company," and
similar phrases, refer to the Consultant's engagement by the Company whether or
not pursuant to this Consultant Agreement.
7. Intellectual Property
Any interest in patents, patent applications, inventions,
copyrights, developments, and processes ("Intellectual Property") which the
Consultant (and each of Xxxx Xxxxxx and Xxxxx Xxxxxx) hereafter, during the
period it is employed by the Company, may own or develop relating to the fields
in which the Company may then be engaged shall belong to the Company; and
forthwith upon request of the Company, the Consultant shall execute all such
assignments and other documents and take all such other action as the Company
may reasonably request in order to vest in the Company all his right, title, and
interest in and to such Intellectual Property free and clear of all liens,
charges, and encumbrances. the Consultant undertakes to disclose promptly to the
Company any and all Intellectual Property, business information and other
information obtained by the Consultant concerning the business or affairs of the
Company or Sibling during the course of the Consultant's employment by the
Company, including, without limitation, inquiries concerning, and potential
orders for products and services.
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8. Confidential Information
All confidential information which the Consultant (and each of Xxxx
Xxxxxx and Xxxxx Xxxxxx) may now possess, or may obtain or create prior to the
end of the period it is employed by the Company, relating to the business of the
Company, or any customer or supplier of the Company, or any agreements,
arrangements, or understandings to which the Company is a party, shall not be
disclosed or made accessible by him to any other person or entity either during
or after the termination of her employment or used by her except during her
employment by the Company in the business and for the benefit of the Company.
The Consultant (and each of Xxxx Xxxxxx and Xxxxx Xxxxxx, to the extent
applicable) shall return all tangible evidence of such confidential information
to the Company prior to or at the termination of its engagement. The Consultant
(and each of Xxxx Xxxxxx and Xxxxx Xxxxxx, to the extent applicable) will not
remove from the Company's premises (except to the extent such removal is for the
purposes of the performance by each of Xxxx Xxxxxx and Xxxxx Xxxxxx of their
respective duties at home or while traveling, or except as otherwise
specifically authorized by the Company) any document, record, plan, notebook or
computer software whether embodied in a disk or any other form (the Proprietary
Items"). The Consultant recognizes that, as between the Consultant ((and each of
Xxxx Xxxxxx and Xxxxx Xxxxxx, to the extent applicable) and the Company, the
Proprietary Items, whether or not developed by the Consultant, are the exclusive
property of the Company. Upon termination of this Agreement for any reason, or
upon the request of the Company during the Consulting Period, the Consultant
(and each of Xxxx Xxxxxx and Xxxxx Xxxxxx, to the extent applicable) will return
to the Company all of the Proprietary Items in the Consultant's (and each of
Xxxx Xxxxxx and Xxxxx Xxxxxx, to the extent applicable) possession or subject to
the Consultant's control, and the Consultant (and each of Xxxx Xxxxxx and Xxxxx
Xxxxxx, to the extent applicable) shall not retain any copies, abstracts,
sketches, or other physical embodiment of any of the Proprietary Items
9. Earlier Termination
Notwithstanding anything herein contained, if on or after the date
hereof and prior to the end of the Consulting Period,
(a) this Agreement may be terminated by the Company upon five days prior
written notice if (i) both of Xxxx Xxxxxx and Xxxxx Xxxxxx shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge
their duties hereunder for a period of 45 consecutive days, or 90 days, whether
or not continuous, in any period of 180 days during the Consulting Period, (ii)
either of Xxxx Xxxxxx and Xxxxx Xxxxxx shall be convicted of a crime, (iii) the
Board of Directors of the Company shall have determined the Consultant (or
either of Xxxx Xxxxxx and Xxxxx Xxxxxx, as the case may be) has committed any
act or omitted to take any action in bad faith and to the detriment of the
Company, including, but not limited to the appropriation (or attempted
appropriation) of the Company's funds or property or a material business
opportunity of the Company, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of the
Company or has materially neglected the Company's business, (iv) the Board of
Directors of the Company shall have determined that the Consultant (or either of
Xxxx Xxxxxx and Xxxxx Xxxxxx, as the case may be) has breached any term of this
Agreement or failed to adhere to any written Company policy if the Consultant
(or either of Xxxx Xxxxxx and Xxxxx Xxxxxx, as the case may be) has been given a
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reasonable opportunity to comply with such policy and failed to correct such
breach, if such breach is curable, within five days after commission thereof,
then, and in each such case, the Company shall have the right to give notice of
termination of the Consultant's services hereunder as of a date (not earlier
than ten days from such notice) to be specified in such notice, and this
Agreement shall terminate on the date so specified, or (v) the Consultant (or
either of Xxxx Xxxxxx and Xxxxx Xxxxxx, as the case may be) is convicted of, the
indictment for (or its procedural equivalent), or the entering of a guilty plea
or plea of no contest with respect to a felony, the equivalent thereof, or any
other crime with respect to which imprisonment is a possible punishment, or (vi)
the services to be provided by either of Xxxx Xxxxxx and Xxxxx Xxxxxx are
delegated to a third party in breach of this Agreement; or
(b) automatically on the date of the death of the latter to survive of
either Xxxx Xxxxxx and Xxxxx Xxxxxx;
(c) upon any termination of this Agreement, the obligation of the Company
to make any further payments, or provide any benefits specified herein, other
than those payments and benefits, shall cease and terminate as of the date of
such termination.
10. Survival
The covenants, agreements, representations, and warranties contained
in this Agreement shall survive the termination this Agreement, irrespective of
any investigation made by or on behalf of any party.
11. Entire Agreement; Modification
This Agreement, the Stock Purchase Agreement, and the documents
executed in connection with the Stock Purchase Agreement, including the
Non-compete Agreement, contain the entire understanding of the parties with
respect to the subject matter hereof, supersede all prior agreements and
understandings between them concerning such subject matter, and may be modified
only by a written instrument duly executed by each party.
12. Notices
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to the Company: c/o Sibling Theatricals, Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxxxx Xxxxxxx, President and CEO
Facsimile No.: (000) 000-0000
Email: xxxxxxxxxx@xxxxx.xxx
If to the Consultant: c/o Xxxx Xxxxxx Productions
0000 Xxxxxxxxx Xxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Dick and Xxxxx Xxxxxx
Facsimile: (000) 000-0000
Email: xxxxxxx@xxxxxxx.xxx
13. Waiver
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
14. Binding Effect
The Consultant's rights and obligations under this Agreement shall
not be transferable by assignment or otherwise, such rights shall not be subject
to commutation, encumbrance, or the claims of the Consultant's creditors, and
any attempt to do any of the foregoing shall be void. This Agreement may not be
assigned by the Consultant without the prior written consent of Sibling and the
Company, which consent may be withheld for any reason whatsoever.
15. Life Insurance
If requested by the Company or Sibling, each of Xxxx Xxxxxx and
Xxxxx Xxxxxx shall submit to such physical examinations and otherwise take such
actions and execute and deliver such documents as may be reasonably necessary to
enable the Company or Sibling at its expense and for its own benefit, to obtain
life insurance on the life of each of Xxxx Xxxxxx and Xxxxx Xxxxxx. Neither of
Xxxx Xxxxxx and Xxxxx Xxxxxx has reason to believe that his/her life is not
insurable with a reputable insurance company at rates now prevailing in the City
of Las Vegas, Nevada, for healthy men and women of their respective ages.
16. Counterparts; Governing Law
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed by and construed in accordance
with the laws of the State of Nevada, without giving effect to the conflict of
laws principles thereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
Xxxx Xxxxxx Productions, Inc.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President
D & L Partnership, a Nevada general partnership
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, a general partner
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, a general partner
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