Exhibit 10.1
TRANSITION AND CONSULTING AGREEMENT
This Transition and Consulting Agreement (the "Agreement") is made as of
December 19th, 2005 by and between MediaMax Technology Corporation, a Nevada
corporation with a principal place of business at 000 Xxxxx 00xx Xxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000 (the "Company"), and Xxxxxxx X. Xxxxxxxx (the
"Consultant").
WHEREAS, the Consultant formerly served as the President and Chief
Executive Officer of the Company and also served the Company as a member of the
Board of Directors;
WHEREAS, the Consultant desires to resign from the Company and cease
serving as an employee of the Company in any manner, in each case as of December
29, 2005 (the "Effective Date"), and resigns from serving on the Board of
Directors of the Company concurrently with his execution of this Agreement;
WHEREAS, the Company desires to accept these resignations of Consultant and
engage Consultant to provide assistance to the Company and its Chief Executive
Officer on a non-executive basis for a period of eight (8) months, commencing as
of December 30, 2005, and continuing though August 31, 2006, on the terms and
subject to the conditions set forth herein;
WHEREAS, Consultant is willing to accept such engagement on such terms and
subject to such conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Company and Consultant agree as follows:
SECTION 1. Resignation. The Consultant hereby resigns from all offices and
positions he holds with the Company, and resigns from his employment with the
Company, effective as of the Effective Date. The Consultant further resigns from
serving on the Board of Directors of the Company, effective as of the date of
his execution of this Agreement. Effective as of the Effective Date, Consultant
shall no longer have access to use office space of the Company (other than in
his capacity as a Consultant to the Company), shall no longer receive any
Company benefits (other than health care benefits to which Consultant is
entitled to receive at his own expense pursuant to applicable Federal law and as
described in a separate letter to Consultant), and shall no longer have access
to Company e-mail services. On or prior to the Effective Date, Consultant shall
return to the Company all of the records, correspondence, electronic and
magnetic storage media, documents, proprietary or confidential information,
reports, files and all other property, including keys, and other electronic
devices of the Company or any of its affiliates, held by the Consultant or
otherwise in his possession. Consultant will not retain any copies, duplicates
or excerpts of any of the aforementioned documents or items. Notwithstanding the
foregoing, Consultant may retain the lap-top computer, provided that all files
containing proprietary or confidential information of the Company are deleted
therefrom and confirmation of such deletion has been given to the Company by a
person or entity acceptable to the Company. From and after the Effective Date,
Consultant shall have no authority to incur any liability on behalf of the
Company or any of its affiliates or otherwise to commit the Company or any of
its affiliates to any contract, liability or obligation of any kind or nature
whatsoever.
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SECTION 2. Engagement. The Company agrees to engage Consultant to assist
the Company's Chief Executive Officer and other officers and executives of the
Company from time to time, as requested, in facilitating a smooth transition in
the management of the Company and otherwise in operating the business and
affairs of the Company during the Term (as defined below), and Consultant
accepts such engagement (the "Engagement"). Consultant agrees to commit such
necessary time as shall be reasonably necessary to perform such services to the
Company from and after the Effective Date. During the Term (as defined below)
and for one year thereafter, Consultant shall not engage in any activity that
has a conflict of interest with the Company, including any competitive
employment, business, or other activity, and he shall not assist any other
person or organization that competes, or intends to compete, with the Company.
SECTION 3. Term. The term of the Engagement of Consultant by the Company as
provided in Section 2 shall begin on December 30, 2005 and shall continue until
August 30, 2006 (the "Term"), unless earlier terminated as hereinafter provided.
SECTION 4. Compensation and Expenses.
(a) Prior to the Effective Date. On and prior to the Effective Date, the
Company shall pay Consultant in accordance with its normal payroll practices and
shall reimburse Consultant for all reasonable unpaid expenses incurred by
Consultant on behalf of the Company or its affiliates. The Company acknowledges
that, as of the date hereof, such unreimbursed expenses aggregate $6,823.07, all
of which shall be reimbursed to Consultant with his last pay check, subject to
reduction by the Company to the extent Consultant has not fully paid for the
purchase price of the shares of Common Stock to be sold to Consultant pursuant
to Section 5 below.
(b) Compensation. During the Term, the Company shall pay Consultant a
consulting fee at a rate equal to $10,000 per month; provided, however, that
such monthly consulting fee shall be reduced to $5,000 upon acceptance by
Consultant of an employment contract with another person or entity in a position
commensurate with Executive management duties as performed by Consultant during
employment as President and Chief Executive Officer of the Company . The
consulting fee shall be payable bi-weekly at the end of each calendar two-week
period along with normal payroll processing during the Term in the amount of
$4,650.16 per period for 35 weeks. The first payment is scheduled for January 6,
2006 and the last payment (which will be adjusted to an amount of $930.28 to
accommodate the intention of this agreement to be for 8 months at $10,000.00 per
month or a total of $80,000.00) is scheduled for September 1, 2006.
(c) Expenses. The Company shall reimburse Consultant for all reasonable
out-of-pocket expenses incurred by Consultant in connection with the business of
the Company and in performance of Consultant's duties under this Agreement.
Notwithstanding the foregoing, the Consultant shall not incur any such expenses
without the prior written approval of the Company.
SECTION 5. Equity Compensation.
(a) Issuance of Restricted Stock. On or before December 30, 2005, the
Company shall issue to Consultant 3,000,000 shares of the Common Stock, $.001
par value per share ("Common Stock"), of the Company for a purchase price of
$.001 per share (or $3,000.00 in the aggregate). Consultant acknowledges that
the fair market value of such shares of Common Stock (the "Shares") may exceed
the purchase price therefore and has consulted his tax advisors with respect to
the Federal and state income tax consequences of such stock issuance.
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(b) Restrictions on Transfer. The Consultant agrees that, for a period of
one year from and after the Effective Date (the "Restricted Period"), he will
not Transfer (as defined below) any of the Shares, except in accordance with the
terms of this Agreement. The immediately preceding sentence of this Section
shall not apply to or otherwise prevent (1) the inter vivos transfer or
assignment by Consultant, voluntarily or by operation of law, of all of his
Shares to his legal representative in the case of his incompetency, (2) a
lifetime or testamentary transfer of all or part of the Shares of Consultant to
his spouse, children, grandchildren or a trust or other entity for the benefit
of Consultant and/or any such other Persons, or (3) a transfer of the Shares to
the Consultant's heirs at law upon Consultant's death, provided, however, that
in any of the foregoing permitted cases, each transferee agrees in writing to be
bound by all of the provisions of this Agreement, and the term "Consultant"
hereunder shall include such transferees. Any attempt to Transfer or any
purported Transfer of any Shares not in accordance with the terms of this
Agreement shall be null and void and neither the Company, as the issuer of such,
nor any transfer agent of such Shares shall give any effect to such attempted
Transfer in its stock records. For the purposes of this Agreement, the term
"Transfer" shall mean any direct or indirect sale, transfer, assignment, grant
of participation in, gift, hypothecation, alienation, pledge or other
disposition of any securities or any interests therein excluding, for the
avoidance of doubt, any exercise of purchase or conversion rights under options,
warrants or convertible securities. Following the Restricted Period, the
Consultant may Transfer shares only in accordance with applicable Federal or
state securities laws and the terms of this Agreement.
(e) Legends. Each certificate representing the Shares held by Consultant
shall be endorsed with the following legends and such other legends as may be
required by applicable state securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT HAVE BEEN
COMPLIED WITH OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION, THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES OR "BLUE SKY" LAWS OF ANY JURISDICTION. THEY MAY NOT BE
OFFERED OR SOLD WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION, IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION,
THAT THE PROPOSED TRANSACTION WILL BE EXEMPT FROM REGISTRATION,
QUALIFICATION AND FILINGS IN ALL SUCH JURISDICTIONS.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon the
completion of a Transfer pursuant to a registered public offering under the
Securities Act or pursuant to Rule 144 thereunder and made in accordance with
the Securities Act) shall also bear such legends, unless the Shares represented
thereby are no longer subject to the restrictions on transfer imposed under the
Securities Act or state securities laws, in which case the applicable legend (or
legends) will be removed.
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SECTION 6. Representations of Consultant.
(a) The Consultant understands that the Shares are not registered under the
Securities Act of 1933, as amended (the "Act"), and represents to the Company,
and agrees that the Company is entitled to rely on such representations, as
follows: that the Consultant is acquiring the Shares with no intention of
reselling any of them in any distribution within the meaning of the Act; that he
is acquiring the Shares for his own account and that no one else has any
beneficial ownership in the Shares; and that he does not intend to and will not
resell the Shares except in compliance with the Act and subject to the terms and
conditions set forth in section 5 hereof. In addition, the Consultant
understands and agrees that (i) the Shares are "restricted securities" within
the meaning of Rule 144 under the Act; (ii) the Shares must be held unless they
are registered under the Act or an exemption from registration is available, and
the Company has received an opinion of counsel to such effect, (iii) in any
event, the exemption from registration under Rule 144 will not be available for
at least one year and even then will not be available unless a public market
then exists for the Common Stock of the Company, adequate information concerning
the Company is then available to the public, and other terms and conditions of
Rule 144 are complied with.
(b) The Consultant is relying solely on his tax advisors with respect to
the tax consequences of this investment and the transactions contemplated
hereunder and not on any statements or representations of the Company or any of
its agents or representatives. The Consultant understands that the equity
compensation he receives under this Agreement may be considered taxable income
for Federal or state income tax purposes and that the Company may treat such
equity compensation as a compensation charge against its earnings. The
Consultant understands that the Consultant, and not the Company, shall be
responsible for the Consultant's own tax liability that may arise as a result of
this investment or the transactions contemplated hereunder.
SECTION 7. Termination. Except as provided in the next succeeding sentence,
this Agreement may only be terminated by written agreement of the Company and
Consultant. Notwithstanding the foregoing, the Company may terminate this
Agreement, effective immediately upon receipt of written notice, if the
Consultant breaches any provision of Section 8 or Section 9 of this Agreement.
No termination of this Agreement shall affect any of Consultant's rights to
receive or retain equity compensation pursuant to Section 5 above, unless and
until (a) Consultant has agreed in writing to such termination, or (b) it is
finally judicially determined that Consultant has breached any provision of
Section 8 or Section 9 of this Agreement.
SECTION 8. Covenants of Consultant.
(a) Consultant recognizes that the knowledge of, information concerning and
relationship with customers, suppliers, investors and agents, and the knowledge
of the Company's business methods, systems, plans, software, technologies and
policies which Consultant will establish, receive or obtain as a consultant to
the Company (collectively, "Confidential Information"), are valuable and unique
assets of the business of the Company. Consultant will not, during or within
five (5) years after the Term, disclose any such Confidential Information
pertaining to the Company, its customers, suppliers, agents, policies or other
aspects of its business, for any reason or purpose, whatsoever except pursuant
to Consultant's duties hereunder or as otherwise authorized by the Company in
writing. The term Confidential Information shall not include knowledge or
information which (i) is in or enters the public domain without violation of
this Agreement or other obligations of confidentiality by Consultant or his
agents or representatives, (ii) Consultant can demonstrate was in his possession
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on a nonconfidential basis prior to the commencement of his engagement with the
Company, or (iii) Consultant can demonstrate was received or obtained by him on
a non-confidential basis from a third party who did not acquire it wrongfully or
under an obligation of confidentiality, subsequent to the termination of his
engagement hereunder.
(b) All memoranda, notes, records or other documents made or compiled by
Consultant or made available to Consultant while engaged concerning customers,
suppliers, agents or personnel of the Company, or the Company's business
methods, systems, plans and policies, shall be the Company's property and shall
be delivered to the Company within five (5) business days of the termination of
Consultant's engagement or at any other time on request.
(c) During the Term and for two (2) years thereafter, Consultant shall not
directly or indirectly solicit or initiate contact with any employee of the
Company with a view to inducing or encouraging such employee to leave the employ
of the Company for the purpose of being hired by Consultant, an employer
affiliated with him or any competitor of the Company.
(d) Consultant acknowledges that the provisions of this section are
reasonable and necessary for the protection of the Company and that the Company
will be irrevocably damaged if such covenants are not specifically enforced.
Accordingly, Consultant agrees that, in addition to any other relief to which
the Company may be entitled in the form of actual or punitive damages, the
Company shall be entitled to seek and obtain injunctive relief from a court of
competent jurisdiction for the purposes of restraining Consultant from any
actual or threatened breach of such covenants.
(e) In the event that, following the termination of this Agreement,
consultant is entitled to receive any further payments other than for
compensation or other amounts accrued prior to termination or expiration of this
Agreement, such payments shall nonetheless cease and the Company shall no longer
be obligated to make such payments if there is a material breach of any of the
covenants in this section and Consultant shall forthwith upon demand of the
Company repay any such amounts paid to Consultant subsequent to the date such
breach occurred.
SECTION 9. Assignment of Inventions.
(a) Consultant agrees that all Confidential Information and all other
inventions, discoveries, concepts, designs, research methods and results,
processes, formulae, creations, products, works of authorship, databases, trade
secrets and know-how, or parts thereof, conceived, developed, or otherwise made
by Consultant, alone or jointly with others and in any way relating to the
Company's present or proposed programs or services or to tasks assigned to
Consultant during the course of Consultant's engagement by the Company, whether
or not patentable or subject to copyright protection and whether or not reduced
to tangible form or reduced to practice, during the period of Consultant's
engagement by the Company, whether or not made during Consultant's regular
working hours, and whether or not made on the premises of the Company, and
whether or not disclosed by Consultant to the Company (hereinafter collectively
referred to as "Developments"), together with all goods or services which embody
or emulate such Developments, shall be the sole property of the Company.
Consultant agrees to, and hereby does, assign to the Company all his or her
right, title and interest throughout the world in and to all Developments and to
anything tangible which evidences, incorporates, constitutes, represents or
records any such Developments. Consultant agrees that all such Developments
shall constitute works made for hire under the copyright laws of the United
States and hereby assign and, to the extent any such assignment cannot be made
at present, hereby agrees to assign to the Company all copyrights, patents and
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other proprietary rights Consultant may have in any such Development, together
with the right to file for and/or own wholly without restriction United States
and foreign patents, trademarks, and copyrights with respect thereto.
(b) Consultant shall make and maintain adequate and current written records
of all Developments, and shall disclose all Developments promptly, fully and in
writing to an authorized officer of the Company immediately upon development of
the same and at any time upon request.
SECTION 10. Exceptions. Consultant hereby certifies that Consultant has
informed the Company in writing of all continuing obligations to any previous
employer, including those which require Consultant not to disclose to the
Company any information, and that Consultant has also informed the Company, in
writing, of all Confidential Information or Developments which Consultant claims
as his or her own or otherwise intends to exclude from this Agreement because it
was developed by Consultant prior to the date of this Agreement. Consultant
understands that after execution of this Agreement, Consultant shall have no
right to exclude Confidential Information or Developments from this Agreement.
SECTION 11. Obligation to Cooperate. Consultant will, at any time during
his engagement, or after it terminates, at the request of the Company, execute
all documents and perform all lawful acts which the Company considers necessary
or advisable to secure its rights hereunder and to carry out the intent of this
Agreement. It is understood that reasonable out-of-pocket expenses of
Consultant's assistance incurred at the request of the Company will be
reimbursed by the Company.
SECTION 12. Release. Consultant hereby releases and waives all claims,
causes of action or the like that Consultant had, now has or may in the future
have against the Company or SunnComm International, Inc. ("SunnComm") and any
and all of the respective officers, employees, directors and stockholders
(collectively, the "Released Parties"), whether now known or unknown, in respect
to all matters relating to Consultant's employment with the Company or
engagement by the Company, possible separation from employment with the Company,
which Consultant acknowledges may occur for nondiscriminatory reasons, or
treatment of Consultant by the Company while in the Company's employ or
engagement, including all claims related to severance, notice of termination,
the payment of salary and/or incentive performance bonus, and all claims arising
under the Age Discrimination in Employment Act of 1967 ("ADEA") as amended by
the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of
1964 as amended by the Civil Rights Act of 1991, the Equal Pay Act of 1962, the
Americans with Disabilities Act of 1990, the Workers Adjustment and Retraining
Notification Act, or any other federal, state or local statute or ordinance, and
Consultant further releases and waives any other claim or cause of action
recognized in law or equity which Consultant had or now has against any of the
Released Parties arising out of conduct, acts or omissions of the Company or
SunnComm occurring prior to the execution date of this Agreement. Consultant
understands and acknowledges that this Agreement will bar recovery in any forum
for any claims that are the subject matter of the release set forth herein, and
that Consultant will neither seek nor accept any moneys for any claim or cause
of actions which is the subject matter of this release.
SECTION 13. Non-Disparagement. Company and Consultant agree that they will
not make any comments or statements to the press, employees of the Company, any
individual or entity with whom either party has a business relationship or any
other person if such comment or statement could be likely to adversely affect
the conduct of the business of the Company or Consultant, or any of their plans
or prospects or the business reputation of the Company or Consultant or that of
any of Company's employees or stockholders, except as may be required by law or
subpoena.
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SECTION 14. Independent Contractor Status. The Consultant shall perform all
services under this Agreement as an "independent contractor" and not as an
employee or agent of the Company.
SECTION 15. Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter thereof,
supersedes and replaces in its entirety any and all prior agreements of the
parties with respect to the subject matter thereof, and cannot be changed or
extended except by a writing signed by both parties hereto. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
legal representatives, executors, heirs, administrators, successors and assigns.
SECTION 16. Governing Law. This Agreement and all matters and issues
collateral thereto shall be governed by the laws of the State of Arizona,
without regard to its conflict of law principles.
SECTION 17. Severabilitv. If any provision of this Agreement, as applied to
either party or to any circumstance, shall be adjudged by a court to be void and
unenforceable, the same shall in no way affect any other provision of this
Agreement or the validity or enforceability thereof.
SECTION 18. Notices. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally or mailed by
registered or certified mail, return receipt requested, to the parties at their
respective addresses on record at the Company, or at such other address or
addresses as they may hereafter designate in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
first date written above.
MEDIAMAX TECHNOLOGY CORP.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Chief Executive Officer
CONSULTANT
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx.
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