Exhibit 10.2

EMPLOYMENT AGREEMENT
 
To:        Terry M. Phillips:
 
This Employment Agreement (this “Agreement”), dated as of May 12, 2008 (the
“Effective Date”), establishes the terms of your continued employment with
SouthPeak Interactive Corporation, a Delaware corporation (the “Company”).
 
1. Employment Duties. You and the Company agree to your employment as Chairman
on the terms contained herein. In such position, you will report directory to
the Company’s Board of Directors (the “Direct Report”). You agree to perform
whatever duties the Direct Report may assign you from time to time that are
reasonably consistent with your position. During your employment, you agree to
devote your full business time, attention, and energies to performing those
duties (except as the Company may otherwise agree).
 
2. Term. The initial term of this Agreement shall be for a period of three
years, commencing as of the Effective Date, unless terminated earlier pursuant
to Section 7 below. This Agreement shall automatically renew for successive
one-year periods thereafter (the initial term and each such renewal period are
collectively referred to as the “Term”) unless, at least three months prior to
the expiration of the initial term or any such renewal period, either party
gives written notice to the other party specifically electing to terminate this
Agreement at the end of the then-current initial term or renewal period, as
applicable (a “Notice of Non-Renewal”). In the event a Notice of Non-Renewal is
delivered by either party as provided above then, as of the end of the Term,
unless you are no longer an employee of the Company as of such time, you shall
become an at-will employee of the Company (provided that the provisions of this
Agreement that expressly survive termination shall continue to apply to you).
 
3. Compensation.
 
(a) Salary. For all services rendered by you under this Agreement, the Company
will pay you an annual salary (the “Salary”) of not less than US$100,000, which
may be increased, but not decreased, from time to time in such amounts as may be
determined by the Company’s Board of Directors (the “Board”) or the compensation
committee thereof, in accordance with its generally applicable payroll
practices.
 
(b) Bonus. In addition to your Salary, you shall be eligible during the Term to
receive an annual bonus (the “Bonus”) based on the Company’s achievement of its
financial performance goals, as determined by the Board or its compensation
committee. Any such Bonus earned hereunder will be paid within 90 days after the
end of the Company’s fiscal year. You must be employed at the end of the
applicable fiscal year in order to receive any Bonus to which you are otherwise
entitled pursuant to the terms of this Section 3(b).
 
(c) Equity. You shall be eligible to receive equity awards under any incentive
compensation, stock option or other equity plans of the Company now in effect or
which may be in effect at any time during the Term, subject to the discretion of
the Board or any committee thereof designated to administer any such plan.
 
 
 

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4. Employee Benefits. During the Term, the Company will provide you with the
same benefits as it makes generally available from time to time to the Company’s
senior executives, as those benefits are amended or terminated from time to
time. Your participation in the Company’s benefit plans will be subject to the
terms of the applicable plan documents and the Company’s generally applied
policies, and the Company, in its sole discretion, may adopt, modify, interpret,
or discontinue such plans or policies.
 
5. Vacation. You shall accrue at least four weeks of paid vacation per year. All
terms and conditions of your vacation benefit will be governed by the Company’s
policies in effect from time to time.
 
6. Expenses. The Company will reimburse you for reasonable travel and other
business-related expenses you incur for the Company in performing your duties
under this Agreement. You must itemize and substantiate all requests for
reimbursement and submit such reimbursement requests in accordance with the
Company’s policies in effect from time to time.
 
7. No Other Employment. While the Company employs you, you agree that you will
not, directly or indirectly, provide services to any person or organization for
which you receive compensation or otherwise engage in activities that would
conflict or interfere significantly with your faithful performance of your
duties as an employee without the Board’s prior written consent. Notwithstanding
the foregoing, you may (a) make and manage personal passive business investments
of your choice and serve in any director or similar type capacity with up to
three civic, educational or charitable organizations, or any trade association,
without seeking or obtaining the approval of the Board, provided such activities
do not materially interfere or conflict with the performance of your duties
hereunder, and (b) with the approval of the Board, serve on the boards of
directors of other corporations.
 
8. Termination. Subject to the provisions of this Section 8 and of Section 9,
you and the Company agree that it may terminate your employment, or you may
resign, prior to the expiration of the Term, except that, if you voluntarily
resign, you must provide the Company with 30 days’ prior written notice (unless
the Board or your Direct Report has previously waived such notice in writing or
authorized a shorter notice period).
 
(a) For Cause. The Company may terminate your employment for “Cause” if you:
 
(i) commit a material breach of (A) your obligations or agreements under this
Agreement or (B) any of the covenants regarding non-disclosure of confidential
information, assignment of intellectual property rights, non-competition and/or
non-solicitation (collectively, “Restrictive Covenants”) applicable to you under
any stock option agreement or other agreement entered into (whether before, on
or after the date hereof) between you and the Company;
 
(ii) willfully neglect or fail to perform your material duties or
responsibilities to the Company, such that the business or reputation of the
Company is (or is threatened to be) materially and adversely affected;
 
 
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(iii) commit an act of embezzlement, theft, fraud or any other act of dishonesty
involving the Company or any of its customers; or
 
(iv) are convicted of or plead guilty or no contest to a felony or other crime
that involves moral turpitude.
 
Your termination for Cause will be effective immediately upon the Company’s
mailing or written transmission of notice of such termination. Before
terminating your employment for Cause under clauses (i) or (ii) above, the
Company will specify in writing to you the nature of the breach, act, omission,
refusal, or failure that it deems to constitute Cause and give you 30 days after
you receive such notice to the correct the situation (and thus avoid termination
for Cause), if such situation is capable of being corrected, unless the Company
agrees to extend the time for correction.
 
(b) Without Cause. Subject to the applicable provisions in Sections 9 below, the
Company may terminate your employment under this Agreement before the end of the
Term without Cause.
 
(c) Disability. If you become disabled (as defined below), the Company may
terminate your employment. You are “disabled” if you are unable, despite
whatever reasonable accommodations the law requires, to render services to the
Company for more than 90 consecutive days because of physical or mental
disability, incapacity, or illness. You are also “disabled” if you are found to
be disabled within the meaning of the Company’s long-term disability insurance
coverage as then in effect (or would be so found if you applied for the coverage
or benefits).
 
(d) Death. If you die during the Term, the Term will end as of the date of your
death.
 
9. Consequences of Termination Prior to the Expiration of the Term.
 
(a) Payments on Termination. If you resign or the Company terminates your
employment with or without Cause or because of disability or death, the Company
will pay you any unpaid portion of your Salary pro-rated through the date of
actual termination, reimburse any substantiated but unreimbursed business
expenses, pay any accrued and unused vacation time (to the extent consistent
with the Company’s policies), and provide such other benefits as applicable laws
or the terms of the benefits require. Except to the extent the law requires
otherwise or as otherwise provided in this Agreement or in your option,
restricted stock or other equity instrument agreements, neither you nor your
beneficiary or estate will have any rights or claims under this Agreement or
otherwise to receive severance or any other compensation, or to participate in
any other plan, arrangement, or benefit, after such termination or resignation.
 
(b) Termination Due to Disability. If your employment is terminated prior to the
end of the Term due to disability, as determined in accordance with Section
8(c), the Company shall, in addition to the payments set forth in Section 9(a),
continue to pay your Salary, as then in effect, for a period of 3 months after
the date of termination of your employment (after which time the Company shall
have no further obligation to pay Salary hereunder).
 
 
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(c) Termination by the Company Without Cause. Anything contained herein to the
contrary notwithstanding, if before the end of the Term the Company terminates
your employment without Cause (other than as a result of your death or
disability), you shall be entitled to the following, in addition to the payments
set forth in Section 9(a):
 
(i) the Company shall continue to pay your Salary, as then in effect, for a
period of 3 months after the date of termination of your employment (the
“Separation Period”) (after which time the Company shall have no further
obligation to pay Salary hereunder); and
 
(ii) the Company shall provide you and your beneficiaries, throughout the
Separation Period and at the Company’s expense, with continued coverage under
the group medical care, disability and life insurance benefit plans or
arrangements in which you are participating at the time of termination;
provided, however, that if such coverage is precluded by the terms of the
Company’s benefit or insurance policies, the Company shall make a cash payment
to you in an amount sufficient to allow you to obtain comparable benefits for
such period; and provided, further, that the Company’s obligation to provide
such coverage shall be terminated if you obtain equivalent substitute coverage
from another employer at any time during the Separation Period.
 
(d) Conditions to Separation of Employment Benefits. Notwithstanding anything to
the contrary contained herein, it shall be a condition to the Company’s
continued obligations under Sections 9(b) and (c) hereof that you comply with,
and you agree to return any payments previously made to you under Sections 9(b)
and (c) hereof if you fail to comply with, any Restrictive Covenants applicable
to you. You are not required to mitigate amounts payable under this Section 9(d)
by seeking other employment or otherwise, nor must you return to the Company
amounts earned under subsequent employment. 
 
10. Unauthorized Disclosure; Non-Solicitation; Non-Competition; Proprietary
Rights.
 
(a) Unauthorized Disclosure. You agree and understand that in your position with
the Company, you have been and will be exposed to and have and will receive
information relating to the confidential affairs of the Company and its
affiliates, including, without limitation, technical information, intellectual
property, business and marketing plans, strategies, customer information,
software, other information concerning the products, promotions, development,
financing, expansion plans, business policies and practices of the Company and
its affiliates and other forms of information considered by the Company and its
affiliates to be confidential and in the nature of trade secrets (including,
without limitation, ideas, research and development, know-how, formulas,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information and business and marketing plans and proposals)
(collectively, the “Confidential Information”). You agree that at all times
during your employment with the Company and thereafter, you shall not disclose
such Confidential Information, either directly or indirectly, to any individual,
corporation, partnership, limited liability company, association, trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof (each a “Person”) without the prior written
consent of the Company and shall not use or attempt to use any such information
in any manner other than in connection with your employment with the Company,
unless required by law to disclose such information, in which case you shall
provide the Company with written notice of such requirement as far in advance of
such anticipated disclosure as possible so as to enable the Company to seek an
appropriate protective order or confidential treatment. This confidentiality
covenant has no temporal, geographical or territorial restriction. Upon
termination of your employment with the Company, you shall promptly supply to
the Company all property, keys, notes, memoranda, writings, lists, files,
reports, customer lists, correspondence, tapes, disks, cards, surveys, maps,
logs, machines, technical data and any other tangible product or document which
has been produced by, received by or otherwise submitted to you during or prior
to your employment with the Company, and any copies thereof in his (or capable
of being reduced to his) possession.
 
 
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(b) Non-Competition. By and in consideration of the Company’s entering into this
Employment Agreement and the payments to be made and benefits to be provided by
the Company hereunder, and in further consideration of your exposure to the
Confidential Information of the Company and its affiliates, you agree that you
shall not, during your employment with the Company (whether during the Term or
thereafter) and for a one-year period thereafter (the “Restriction Period”),
directly or indirectly, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of, or be
connected in any manner with, including, without limitation, holding any
position as a stockholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below); provided, that in no event shall ownership of two percent (2%)
or less of the outstanding securities of any class of any issuer whose
securities are registered under the Securities Exchange Act of 1934, as amended,
standing alone, be prohibited by this paragraph (b), so long as you do not have,
or exercise, any rights to manage or operate the business of such issuer other
than rights as a stockholder thereof. For purposes of this paragraph,
“Restricted Enterprise” shall mean any Person that is engaged, directly or
indirectly, in (or intends or proposes to engage in, or has been organized for
the purpose of engaging in) interactive video game publishing. During the
one-year period following the termination of your employment with the Company,
upon request of the Company, you shall notify the Company of your then-current
employment status.
 
(c) Non-Solicitation of Employees. During the Restriction Period, you shall not
directly or indirectly contact, induce or solicit (or assist any Person to
contact, induce or solicit) for employment any person who is, or within twelve
(12) months prior to the date of such solicitation was, an employee of the
Company or any of its affiliates.
 
(d) Non-Interference with Customers. During the Restriction Period, you shall
not  contact, induce or solicit (or assist any Person to contact, induce or
solicit) any Person which has a business relationship with the Company or of any
of its affiliates to terminate, curtail or otherwise limit such business
relationship.
 
 
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(e) Proprietary Rights. You shall disclose promptly to the Company any and all
inventions, discoveries, and improvements (whether or not patentable or
registrable under copyright or similar statutes), and all patentable or
copyrightable works, initiated, conceived, discovered, reduced to practice, or
made by you, either alone or in conjunction with others, during your employment
with the Company and related to the business or activities of the Company and
its affiliates (the “Developments”). Except to the extent any rights in any
Developments constitute a work made for hire under the U.S. Copyright Act, 17
U.S.C. § 101 et seq. that are owned ab initio by the Company and/or its
applicable affiliate, you hereby assign all of your right, title and interest in
and to all Developments (including all intellectual property rights therein) to
the Company or its nominee without further compensation, including all rights or
benefits therefor, including without limitation the right to sue and recover for
past and future infringement. you acknowledge that any rights in any
developments constituting a work made for hire under the U.S. Copyright act, 17
U.S.C § 101 et seq. are owned upon creation by the Company and/or its applicable
affiliate as your employer. Whenever requested to do so by the Company, you
shall execute any and all applications, assignments or other instruments which
the Company shall deem necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect the
interests of the Company and its affiliates therein. These obligations shall
continue beyond the end of your employment with the Company with respect to
inventions, discoveries, improvements or copyrightable works initiated,
conceived or made by you while employed by the Company, and shall be binding
upon your employers, assigns, executors, administrators and other legal
representatives. If the Company is unable for any reason, after reasonable
effort, to obtain your signature on any document needed in connection with the
actions described in this paragraph, you hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as your agent
and attorney in fact to act for and your behalf to execute, verify and file any
such documents and to do all other lawfully permitted acts to further the
purposes of this section with the same legal force and effect as if executed by
you.
 
(f) Remedies. You agree that any breach of the terms of this Section 10 would
result in irreparable injury and damage to the Company for which the Company
would have no adequate remedy at law; you therefore also agree that in the event
of said breach or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by you and/or any and all Persons
acting for and/or with you, without having to prove damages, in addition to any
other remedies to which the Company may be entitled at law or in equity. The
terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including,
without limitation, the recovery of damages from you. You and the Company
further agree that the provisions of the covenants contained in this Section 10
are reasonable and necessary to protect the businesses of the Company and its
affiliates because of your access to Confidential Information and his material
participation in the operation of such businesses.
 
11. Expiration. The expiration of this Agreement upon the end of the Term
following the delivery of a Notice of Non-Renewal does not constitute
termination without Cause and does not entitle you to any benefits under Section
9(c).
 
12. Cooperation After Termination of Employment. Following the termination of
your employment with the Company for any reason, you shall fully cooperate with
the Company in all matters relating to the winding up of your pending work on
behalf of the Company including, but not limited to, any litigation in which you
are involved, and the orderly transfer of any such pending work to other
employees of the Company as may be designated by the Company. The Company shall
reimburse you for any out-of-pocket expenses you incur in performing any work on
behalf of the Company following the termination of your employment.
 
 
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13. Restrictive Covenants. The Company and you acknowledge that the Restrictive
Covenants applicable to you pursuant to any agreement entered into between you
and the Company (a) shall remain in full force and effect, notwithstanding the
execution and delivery of this Agreement by the parties, and (b) are intended by
the parties to survive, and do survive, the expiration or termination of this
Agreement and your employment with the Company.
 
14. Assignment. The Company shall assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any corporation or other
entity with or into which the Company may hereafter merge or consolidate or to
which the Company may transfer all or substantially all of its assets, if in any
such case such corporation or other entity shall by operation of law or
expressly in writing assume all obligations of the Company hereunder as fully as
if it had originally been made a party hereto, but may not otherwise may not
assign or otherwise transfer this Agreement or any or all of its rights, duties,
obligations, or interests hereunder. You may not assign or otherwise transfer
this Agreement or any or all of your rights, duties, obligations, or interests
hereunder.
 
15. Severability. If the final determination of an arbitrator or a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that any
term or provision of this Agreement is invalid or unenforceable, the remaining
terms and provisions will be unimpaired, and the invalid or unenforceable term
or provision will be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
 
16. Amendment; Waiver. Neither you nor the Company may modify, amend or waive
the terms of this Agreement other than by a written instrument signed by you and
by another executive officer of the Company duly authorized by the Board. Either
party’s waiver of the other party’s compliance with any provision of this
Agreement is not a waiver of any other provision of this Agreement or of any
subsequent breach by such party of a provision of this Agreement.
 
17. Withholding. All payments required to be made by the Company to you under
this Agreement shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company may reasonably
determine should be withheld for payment to the applicable taxing authorities
pursuant to any applicable law or regulation.
 
18. Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Virginia exclusive of its choice of law provisions.
 
19. Survival. Notwithstanding anything to the contrary contained in this
Agreement, the provisions of Sections 7 through 20 of this Agreement shall
survive the termination or expiration, for any reason, of this Agreement.
 
 
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20. Notices. Notices and other communications under this Agreement must be given
in writing by personal delivery, by certified mail, return receipt requested, or
by overnight delivery. You should send or deliver your notices to the Company’s
corporate headquarters, to the attention of the Company’s Secretary. The Company
will send or deliver any notices given to you at your address as reflected in
the Company’s personnel records. You and the Company may change the notice
address by providing notice of such change. You and the Company agree that
notice is received on the date it is personally delivered, the date it is
received by certified mail, or the date of guaranteed delivery by overnight
service, at the applicable address set forth above.
 
21. Entire Agreement. This Agreement supersedes any prior oral or written
agreements, negotiations, commitments, and writings between you and the Company
with respect to the subject matter hereof. All such other agreements,
negotiations, commitments, and writings will have no further force or effect;
and the parties to any such other negotiation, commitment, agreement, or writing
will have no further rights or obligations thereunder.
 
[Signature Page to Follow]
 
 
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If you accept the terms of this Agreement please sign in the space indicated
below. You are encouraged to consult with any advisors you choose regarding this
Agreement.
 

 
SOUTHPEAK INTERACTIVE CORPORATION
         
By:
     
Name:  Abhishek Jain
   
Title:    Chairman, President and Chief
             Executive Officer

 
I accept and agree to the terms of employment set forth in this Agreement:
 
Signature:
 
Name:
Terry M. Phillips
Date:
May 12, 2008

 
 
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