Exhibit 10.1
CONSULTING SERVICES
AGREEMENT
1.
Agreement
:
A.
MathStar, Inc.
(“Company”) agrees to engage A. Harris &
Associates, LLC (“Advisor”) to provide a Chief
Executive Officer, Chief Financial Officer and Special Advisor for
the Company. All such services shall be rendered by
Alex H. Danzberger, Jr. (“Alex”), who is
a member and employee of Advisor.
Specifically, Advisor shall act as
the Chief Executive Officer and Chief Financial Officer of the
Company, as well as act as a Special Advisor to the
Company.
Company understands and agrees that
Advisor is not solely and exclusively engaged to provide services
to Company. Advisor agrees to use its best efforts to provide
the services provided for herein on a timely basis.
B.
This Agreement
shall commence on August 1, 2009 for a period of one year
unless terminated as provided herein. However, all
obligations of the Company pursuant to this Agreement will
automatically extend through the date of the actual consummation of
any Transaction.
C.
For the purposes
of this Agreement, “Transaction” means any investment
or merger and acquisition transaction or transactions, not in the
ordinary course of business, including any sale or exchange of
capital stock, sale or exchange of assets, acquisition, merger,
reverse merger, consolidation, business combination, tender offer,
joint venture, majority or minority investment, strategic alliance,
partnership, or any other similar transaction with
Sajan, Inc.
2.
Services
Rendered : During the term
hereof, Advisor will:
A.
As it relates to
the role of Chief Executive Officer and Chief Financial
Officer:
i)
Perform oversight
of the preparation and filing of regulatory documents required to
be filed with the Securities and Exchange Commission;
ii)
Provide
consultative services to the Board of Directors of the Company to
help address shareholder relations, shareholder meetings and voting
matters put before shareholders;
iii)
Oversee the
continued orderly winding down of former Company
operations;
iv)
Review documents
related to the acquisition of Sajan by the Company;
v)
Oversee
preparation, review and filing of proxy statements, current reports
on Form 8-K, any Registration Statements on Form S-4 and
any other documents related to the acquisition of Sajan by the
Company; and
vi)
Perform such
other services as the Company and Advisor agree.
vii)
Perform those job
duties customarily performed by the Chief Financial Officer and
Chief Executive Officer of a publicly traded company, including
without limitation, oversight of the preparation, review and
approval of the Company’s financial statements.
B.
As it relates to
the role of Special Advisor:
i)
Support the
general due diligence and acquisition process with respect to the
acquisition of Sajan by the Company;
ii)
With the support
of the Company’s Board of Directors, its advisors, and
executives at Sajan, Advisor shall prepare a 3 to 5 year strategic
plan for Sajan (or such other time frame as the Board of Directors
deems appropriate in its discretion). This strategic plan
will provide target market identification, a detailed marketing and
sales plan, a supporting product roadmap, a detailed 2010 budget,
and a 3 to 5 year sales forecast; and
iii)
Perform such
other services as the Company and Advisor agree.
3.
Compensation
: For the
services rendered by Advisor hereunder, the Company shall pay
Advisor as follows:
A.
A non-refundable
initial retainer of $20,000.00 shall be due and payable as of the
date this Agreement is signed by the Parties, which will fully
discharge any obligations between Company and Advisor pursuant to
any prior agreements, whether oral or written;
B.
A non-refundable
monthly retainer of $20,000.00 will be payable on the last day of
each month for services rendered during the course of the
month. The first such payment shall be due on August 31,
2009. There shall be a minimum of 2 and one half payments
($50,000.00) made.
C.
Company agrees to
provide Advisor with options to purchase 15,000 shares of
Company’s common voting stock. The exercise price shall
be the closing price of the Company’s common stock on the
date this Agreement is signed by the Parties. Such options
shall vest in Advisor upon the successful completion of the
Transaction, and will terminate 5 years from the date of the
vesting. The options shall contain standard anti-dilution
provisions.
4.
Expenses
: The
Company shall reimburse Advisor for any and all of Advisor’s
expenses incurred in connection with this Agreement. Such
fees shall include, but not be limited to, the fees and expenses of
any advisor or legal counsel retained by Advisor in conjunction
with this Agreement, travel expenses, postage, and copying
fees. Company shall not be responsible for reimbursing
Advisor for any single expense item in excess of $500.00 unless
Advisor receives prior authorization from Company
therefore.
2
5.
Limitation of
Liability and Indemnification :
A.
Unless as
otherwise set forth herein, Company shall indemnify and hold
harmless Advisor and Alex from and against all liability, claims,
actions, damages, fines, expenses, costs, and any other losses,
including attorney’s fees, incurred by Advisor or Alex,
arising as a result of or in connection with this Agreement
(including, for example, alleged liability based on the
relationship of the parties, breach, misrepresentation, furnishing
incorrect or incomplete information, undisclosed material facts
affecting the Company) or the activities, status, condition,
operations, liabilities, debts or obligations of Company.
Company shall not indemnity or hold harmless Advisor and Alex to
the extent related or due to Advisor’s or Alex’s gross
negligence or intentional wrong doing. This provision will
survive termination of this Agreement.
B.
Company shall
list Advisor and Alex as additional insureds under any applicable
directors’ and officers’ insurance policy, or any other
applicable insurance policy. Company agrees that any such
coverage extended to Advisor and Alex shall be consistent with, or
greater than, the coverage granted to the former CEO, excluding
health and life insurance provided to the former CEO.
C.
Advisor shall
indemnify and hold harmless Company from and against all liability,
claims, actions, damages, fines, expenses, costs, and any other
losses, including attorney’s fees, incurred by Company
arising as a result of Advisor’s intentional
misrepresentation of any material fact related to the
Company’s activities, status, condition, operations,
liabilities, debts or obligations. This provision will
survive termination of this Agreement.
D.
Advisor’s
liabilities in any event shall be limited to consideration received
under this Agreement.
E.
Advisor shall not
indemnify or hold harmless Company to the extent related or due to
Company’s negligence or intentional wrongdoing.
6.
Disclosure
: Upon
completion of the Transaction, Advisor may place advertisements in
financial publications and other media at its own expense
describing Advisor’s services to the Company hereunder,
subject to the Company’s prior review and approval of such
advertisements. Advisor shall not disclose the purchase price
unless pr
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