Exhibit 10.9
CONSULTING AND SEVERANCE AGREEMENT
Consulting and Termination Agreement (this "Agreement"), dated as of
May 17, 2005 (the "Effective Date") between MediaBay, Inc. ("MediaBay" or the
"Company") and ▇▇▇▇ ▇▇▇▇ ("▇▇▇▇").
1. Termination of Employment. Levy's employment with the Company is
terminated, effective as of May 17, 2005. The Company shall make severance
payments to Levy as follows: (i) $75,000 on May 15, 2005 and (ii) $6,000 per
month, payable semi-monthly with the regular MediaBay payroll, commencing with a
payment on May 31, 2005 and ending on April 30, 2006. The Company shall continue
to make the deductions to Levy in accordance with his payroll and shall report
his earnings at year-end on a Form W-2. Effective as of the Effective Date, Levy
resigns from all positions as an officer, director and employee of MediaBay and
all of its subsidiaries
2. Levy's Services. MediaBay hereby engages Levy to provide to
MediaBay, and Levy agrees to provide to MediaBay under the terms of this
Agreement, the following consulting services: assistance with accounting and
finance issues, transition of the Company's financing and accounting functions
and preparation of the Company's Quarterly Report on Form 10-Q for the quarter
ending June 30, 2005 (hereinafter the "Services") during the Term (defined
below). During the Term, Levy shall be required to devote at least 40 hours per
month in connection with the provision of the Services. The Services shall be
performed under the direct supervision of the Board of Directors of the Company
(the "Board") and Chairman and shall be performed at such times and places and
in such manner (whether by conference, telephone, electronic communication or
otherwise) as Levy and the Company shall mutually agree. It is understood and
agreed that while serving as a consultant to MediaBay hereunder, Levy may 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 4 below.
3. Term; Compensation; Reimbursement of Expenses. Levy shall render the
Services during the period from the Effective Date through August 15, 2005 (the
"Term"). In exchange for the performance of the Services, and specifically for
the covenants contained in Sections 4 and 5 hereof, MediaBay shall pay Levy (in
addition to the payments set forth in Section 1 hereof), a fee at the rate of
$10,000 per month, payable semi-monthly with the regular MediaBay payroll. The
Company shall continue to make the deductions to Levy in accordance with its
payroll and shall report his earnings at year-end on a Form W-2. In addition,
MediaBay will (i) reimburse Levy for business expenses, to the extent such
expenses relate to Levy's performance of the Services, he actually incurs in the
performance of the Services hereunder and (ii) continue to provide Levy with the
use of the office, cellular phone and computer Levy currently uses without
charge.
4. Noncompetition Covenant. For a period of one (1) year from the date
of this Agreement, Levy shall not 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.
5. Nondisclosure Obligation. Levy shall not at any time, whether during
or two (2) years after the Term, 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. 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. Levy shall not use or disclose any material non-public
information discovered about MediaBay, whether through the rendering of Services
or otherwise. Levy shall keep secret all matters entrusted to Levy shall not use
or attempt to use any confidential information except as may be required in the
ordinary course of performing Levy's Services, nor shall Levy 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 Levy 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 Levy is required to disclose by
virtue of subpoenas, court orders or otherwise as a matter of law.
6. Termination.
The Term and performance of Services by Levy under Section 3 hereof, is
Agreement may be terminated by Levy upon thirty (30) days notice to the Company.
In the event of termination by Levy, Levy shall be entitled to no further
benefits other than payment of amounts owed to Levy through the date of such
termination.
7. Independent Contractor. It is expressly understood and agreed that
during the term of this Agreement, Levy'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. Levy is not authorized to bind
MediaBay, or to incur any obligation or liability on behalf of MediaBay, except
as expressly authorized by MediaBay in writing. Levy 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. Indemnification.
(a) To the maximum extent permitted under the corporate laws of
the State of Florida, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the Articles of
Incorporation and/or By-Laws of the Company as in effect on the date of this
Agreement, (a) Levy shall be indemnified and held harmless by the Company, as
provided under such corporate laws or such Articles of Incorporation and/or
By-Laws, as applicable, for any and all actions taken or matters undertaken,
directly or indirectly, in the performance, in connection with any services
performed by or on behalf of the Company at the Company's request, and (b)
without limiting clause (a), the Company shall indemnify and hold harmless Levy
from and against (i) any claim, loss, liability, obligation, damage, cost,
expense, action, suit, proceeding or cause of action (collectively, "Claims")
arising from or out of or relating to Levy's service as an officer, director,
employee, consultant or agent of the Company or of any subsidiary of the Company
or in any other capacity, including, without limitation, any fiduciary capacity
in which Levy serves at the Company's request, and (ii) any cost or expense
(including, without limitation, reasonable fees and disbursements of counsel for
Levy in the event that the defense of such Claim is not assumed by the Company)
(collectively, "Expenses") incurred by Levy in connection with the defense or
investigation thereof. The Company shall have the right to assume the defense of
any action for a Claim made against Levy. Levy shall have the right to employ
separate counsel in the event the Company does not assume defense of any action
for a Claim made against Levy. If any Claim is asserted or other matter arises
with respect to which Levy believes in good ▇▇▇▇▇ ▇▇▇▇ is entitled to
indemnification as contemplated hereby, the Company shall pay the Expenses
incurred by Levy in connection with the defense or investigation of such Claim
or matter (or cause such Expenses to be paid) on a monthly basis. Levy may not
settle a Claim for which it seeks indemnification under this Agreement without
the prior consent of the Company.
(b) Levy shall promptly notify the Company of any Claim as to
which Levy have received written notice and which may be the subject of a claim
for indemnification under this Agreement; provided, however, that the failure to
promptly notify the Company shall not release the Company of its obligations
under this Agreement unless and to the extent it is materially prejudiced
thereby.
(c) The Company shall cause Levy to continue to be covered by any
insurance policy covering its officers and directors (to the same extent as the
Company's officers and directors are covered) to protect Levy against any
Expenses for Claims that could be the subject of indemnification hereunder.
(d) The indemnification rights provided to Levy are in addition to
those previously granted to Levy (which previous indemnification rights shall
remain in full force and effect). This Section 8 shall survive the termination
of this Agreement.
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) 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.
(c) Levy 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. Levy 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.
(d) This Agreement, the Services to be performed and all rights
hereunder are unique to Levy and Levy and may not be performed on Levy's behalf
by any person other than Levy and may not be transferred or assigned by Levy or
by the Company at any time.
(e) 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 10th
day of May 2005.
MEDIABAY, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman
/s/
/s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇, individually