exhibit_10-1.htm


    Exhibit
10.1

    CONSULTING,
CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENT

    


    This
Consulting, Confidentiality and Proprietary Rights Agreement (“Agreement”) is
entered into as of the 7th day of January, 2009 (the “Effective Date”) by and
between Woozyfly Inc. (the “Company”), and Venor, Inc.
(“Consultant”).

    


    WHEREAS,
the Company desires to engage Consultant to provide certain services as set
forth on Schedule attached hereto and as specified from time to time by the
Company.

    


    NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
conditions contained herein, the parties hereto agree as follows:

    


    1.  Engagement.  The
Company hereby engages Consultant to perform, those duties set forth in the
Schedule attached hereto and such other duties as may be requested from time to
time by the Board of Directors of the Company. Consultant hereby accepts such
engagement upon the terms and subject to conditions set forth in this
Agreement.

    


    2.  Compensation.  For
the services rendered by Consultant under this Agreement, the Consultant shall
be paid the compensation specified in the Schedule, which shall include travel
time, subject to the terms and conditions set forth in this
Agreement.

    


    3.  Term and
Survivability.  The term of this Agreement shall be for a month
to month period from the Effective Date; terminated with 30 day written
notice.  In addition, this Agreement may be terminated if either party
materially fails to perform or comply with this Agreement or any material
provision hereof. Termination shall be effective five (5) days after notice of
such material failure to perform or comply with this Agreement or any material
provision hereof to the defaulting party if the defaults have not been cured
within such five (5) day period.  Upon termination of this Agreement
the following sections of this Agreement shall survive such
termination:  Sections 3, 5, 6, 7, 8, 9, 10, 12, 13, 20 and
21.

    


    4.  Costs and Expenses of
Consultant’s Performance.  Except as set forth on the Schedule,
all costs and expenses of Consultant’s performance hereunder shall be borne by
the Consultant.

    


    5.  Taxes.  As
an independent contractor, Consultant acknowledges and agrees that it is solely
responsible for the payment of any taxes and/or assessments imposed on account
of the payment of compensation to, or the performance of services by Consultant
pursuant to this Agreement, including, without limitation, any unemployment
insurance tax, federal and state income taxes, federal Social Security (FICA)
payments, and state disability insurance taxes. The Company shall not make any
withholdings or payments of said taxes or assessments with respect to amounts
paid to Consultant hereunder; provided, however, that if required by law or any
governmental agency, the Company shall withhold such taxes or assessments from
amounts due Consultant, and any such withholding shall be for Consultant's
account and shall not be reimbursed by the Company to Consultant. Consultant
expressly agrees to make all payments of such taxes, as and when the same may
become due and payable with respect to the compensation earned under this
Agreement.

    


    6.  Confidentiality.  Consultant
agrees that Consultant will not, except when required by applicable law or order
of a court, during the term of this Agreement or thereafter, disclose directly
or indirectly to any person or entity, or copy, reproduce or use, any Trade
Secrets (as defined below) or Confidential Information (as defined below) or
other information treated as confidential by the Company known, learned or
acquired by the Consultant during the period of the Consultant's engagement by
the Company.  For purposes of this Agreement, "Confidential
Information" shall mean any and all Trade Secrets, knowledge, data or know-how
of the Company, any of its affiliates or of third parties in the possession of
the Company or any of its affiliates, and any nonpublic technical, training,
financial and/or business information treated as confidential by the Company or
any of its affiliates, whether or not such information, knowledge, Trade Secret
or data was conceived, originated, discovered or developed by Consultant
hereunder.  For purposes of this Agreement, "Trade Secrets" shall
include, without limitation, any formula, concept, pattern, processes, designs,
device, software, systems, list of customers, training


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    manuals,
marketing or sales or service plans, business plans, marketing plans, financial
information, or compilation of information which is used in the Company's
business or in the business of any of its affiliates.  Any information
of the Company or any of its affiliates which is not readily available to the
public shall be considered to be a Trade Secret unless the Company advises
Consultant in writing otherwise. Consultant acknowledges that all of the Confidential
Information is proprietary to the Company and is a special, valuable and unique
asset of the business of the Company, and that Consultant's past, present and
future engagement by the Company has created, creates and will continue to
create a relationship of confidence and trust between the Consultant and the
Company with respect to the Confidential Information.  Furthermore,
Consultant shall immediately notify the Company of any information which comes
to its attention which might indicate that there has been a loss of
confidentiality with respect to the Confidential Information. In such event,
Consultant shall take all reasonable steps within its power to limit the scope
of such loss.

    


    7.    Return of the Company’s
Proprietary Materials.  Consultant agrees to deliver promptly
to the Company on termination of this Agreement for whatever reason, or at any
time the Company  may so request, all documents, records, artwork,
designs, data, drawings, flowcharts, listings, models, sketches, apparatus,
notebooks, disks, notes, copies and similar repositories of Confidential
Information and any other documents of a confidential nature belonging to the
Company, including all copies, summaries, records, descriptions, modifications,
drawings or adaptations of such materials which Consultant may then possess or
have under its control.  Concurrently with the return of such
proprietary materials to the Company, Consultant agrees to deliver to the
Company such further agreements and assurances to ensure the confidentiality of
proprietary materials.  Consultant further agrees that upon
termination of this Agreement, Consultant's, employees, consultants, agents or
independent contractors shall not retain any document, data or other material of
any description containing any Confidential Information or proprietary materials
of the Company.

    


    8.   Assignment of Proprietary
Rights.  Other than the Proprietary Rights listed on the
Schedule attached hereto, if any, Consultant hereby assigns and transfers to the
Company all right, title and interest that Consultant may have, if any, in and
to all Proprietary Rights (whether or not patentable or copyrightable) made,
conceived, developed, written or first reduced to practice by Consultant,
whether solely or jointly with others, during the period of Consultant's
engagement by the Company which relate in any manner to the actual or
anticipated business or research and development of the Company, or result from
or are suggested by any task assigned to Consultant or by any of the work
Consultant has performed or may perform for the Company.

    


    Consultant
acknowledges and agrees that the Company shall have all right, title and
interest in, among other items, all research information and all documentation
or manuals related thereto that Consultant develops or prepares for the Company
during the period of Consultant's engagement by the Company and that such work
by Consultant shall be work made for hire and that the Company shall be the sole
author thereof for all purposes under applicable copyright and other
intellectual property laws. Other than the Proprietary Rights listed on the
Schedule attached hereto, Consultant represents and covenants to the Company
that there are no Proprietary Rights relating to the Company's business which
were made by Consultant prior to Consultant's engagement by the Company.
Consultant agrees promptly to disclose in writing to the Company all Proprietary
Rights in order to permit the Company to claim rights to which it may be
entitled under this Agreement.  With respect to all Proprietary Rights
which are assigned to the Company pursuant to this Section 8, Consultant will
assist the Company in any reasonable manner to obtain for the Company's benefit
patents and copyrights thereon in any and all jurisdictions as may be designated
by the Company, and Consultant will execute, when requested, patent and
copyright applications and assignments thereof to the Company, or other persons
designated by the Company, and any other lawful documents deemed necessary by
the Company to carry out the purposes of this Agreement. Consultant will further
assist the Company in every way to enforce any patents, copyrights and other
Proprietary Rights of the Company.

    


    9.  Trade Secrets of
Others.  Consultant represents to the Company that its
performance of all the terms of this Agreement does not and will not breach any
agreement to keep in confidence proprietary information or trade secrets
acquired by Consultant in confidence or in trust prior to its engagement by the
Company, and Consultant will not disclose to the Company, or induce the Company
to use, any confidential or proprietary information or material belonging to
others. Consultant agrees not to enter into any agreement, either written or
oral, in conflict with this Agreement.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    10.  Other
Obligations.  Consultant acknowledges that the Company, from
time to time, may have agreements with other persons which impose obligations or
restrictions on the Company regarding proprietary rights made or developed
during the course of work hereunder or regarding the confidential nature of such
work. Consultant agrees to be bound by all such obligations and restrictions and
to take all action necessary to discharge the obligations of the Company
hereunder.

    


    11.  Independent
Contractor.  Consultant shall not be deemed to be an employee
or agent of the Company for any purpose whatsoever. Consultant shall have the
sole and exclusive control over its employees, consultants or independent
contractors who provide services to the Company, and over the labor and employee
relations policies and policies relating to wages, hours, working conditions or
other conditions of its employees, consultants or independent
contractors.

    


    12. Non-Solicit.
Consultant will not, during the term this Agreement and for one year thereafter,
directly or indirectly (whether as an owner, partner, shareholder, agent,
officer, director, employee, independent contractor, consultant, or otherwise)
with or through any individual or entity: (i) employ, engage or solicit for
employment any individual who is, or was at any time during the twelve-month
period immediately prior to the termination of this Agreement for any reason, an
employee of the Company, or otherwise seek to adversely influence or alter such
individual's relationship with the Company; or (ii) solicit or encourage any
individual or entity that is, or was during the twelve-month period immediately
prior to the termination of this Agreement for any reason, a customer or vendor
of the Company to terminate or otherwise alter his, her or its relationship with
the Company or any of its affiliates.  Section 12 does not apply to
individuals or entities known to the Consultant previous to the Effective
Date.

    


    13. Equitable
Remedies.  In the event of a breach or threatened breach of the
terms of this Agreement by Consultant, the parties hereto acknowledge and agree
that it would be difficult to measure the damage to the Company from such
breach, that injury to the Company from such breach would be impossible to
calculate and that monetary damages would therefore be an inadequate remedy for
any breach. Accordingly, the Company, in addition to any and all other rights
which may be available, shall have the right of specific performance, injunctive
relief and other appropriate equitable remedies to restrain any such breach or
threatened breach without showing or proving any actual damage to the
Company.

    


    14. Governing
Law.  This Agreement shall be governed, construed and
interpreted in accordance with the internal laws of the State of New York. In
the event a judicial proceeding is necessary, the sole forum for resolving
disputes arising under or relating to this Agreement are the courts for the
County of New York or the Federal District Court for the Southern District of
New York and all related appellate courts, and the parties hereby consent to the
jurisdiction of such courts, and that venue shall be in New York County, New
York.

    


    15.  Entire Agreement:
Modifications and Amendments.  The terms of this Agreement are
intended by the parties as a final expression of their agreement with respect-to
such terms as are included in this Agreement and may not be contradicted by
evidence of any prior or contemporaneous agreement. The Schedule referred to in
this Agreement is incorporated into this Agreement by this reference. This
Agreement may not be modified, changed or supplemented, nor may any obligations
hereunder be waived or extensions of time for performance granted, except by
written instrument signed by the parties or by their agents duly authorized in
writing or as otherwise expressly permitted herein.

    


    16.  Attorneys
Fees.  Should any party institute any action or proceeding to
enforce this Agreement or any provision hereof, or for damages by reason of any
alleged breach of this Agreement or of any provision hereof, or for a
declaration of rights hereunder, the prevailing party in any such action or
proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    17. Prohibition of
Assignment.  This Agreement and the rights, duties and
obligations hereunder may not be assigned or delegated by Consultant without the
prior written consent of the Company. Any assignment of rights or delegation of
duties or obligations hereunder made without such prior written consent shall be
void and of no effect.  Company consents to the assignment of this
Agreement to Venor Consulting, Inc./LLC when duly formed, provided that Venor
Consulting, Inc./LLC is an affiliate of, or the successor to, Consultant, and
that Eric Stoppenhagen is a principal of such successor or
affiliate.

    


    18.  Binding Effect: Successors
and Assignment.  This Agreement and the provisions hereof shall
be binding upon each of the parties, their successors and permitted
assigns.

    


    19.  Validity.  This
Agreement is intended to be valid and enforceable in accordance with its terms
to the fullest extent permitted by law. If any provision of this Agreement is
found to be invalid or unenforceable by any court of competent Jurisdiction, the
invalidity or unenforceability of such provision shall not affect the validity
or enforceability of all the remaining provisions hereof.

    


    20. Compliance With
Laws.  Consultant agrees to comply with all applicable federal,
state, county and local laws, ordinances, regulations and codes in the provision
of services under this Agreement. 

     

    21. 
Representations and
Warranties; Indemnification. 

     

    (a) 
Consultant warrants, represents, and agrees that: (i) Consultant has
the right and power to enter into this Agreement and grant the rights set forth
herein and that no consent or authorization from any third party is required in
connection therewith; and (ii) any material Consultant furnishes to
Company hereunder shall not infringe upon or violate any common law or statutory
law, copyright or any right or privacy or publicity, or any other right of any
person or entity.  Company warrants, represents, and agrees
that Company has the right and power to enter into this
Agreement.

     

    (b) 
Each of the parties hereto (the "Indemnifying Party") hereby agrees to and does
hereby indemnify, save, and hold the other party (the "Indemnified Party")
harmless from any and all damages, liabilities, costs, losses and expenses
(including reasonable legal costs and attorney's fees reasonably related to the
Indemnified Party's liability) arising out of any third party claim, demand, or
action which is inconsistent with any of the warranties, representations,
covenants or agreements made by the Indemnifying Party in this Agreement, and
which is reduced to final adverse judgment or settled with the Indemnifying
Party's prior written consent, not to be unreasonably withheld or delayed;
provided, however, that the Indemnifying Party's indemnification obligations
hereunder are subject to the requirements that (1) the Indemnified Party
notifies the Indemnifying Party in writing within a reasonable time after the
Indemnified Party is notified of a claim; (2) the Indemnifying Party has sole
control of the defense of the claim (except that, if the Indemnified Party
elects to do so, the Indemnified Party may participate in the defense at its own
expense) and all related monetary settlement negotiations; and (3) the
Indemnified Party provides the Indemnifying Party with assistance, information
and authority necessary for the Indemnifying Party to perform its obligations
under this section; provided always that the Indemnified Party shall not be
required to admit liability under any circumstances.

    


    22.  Notices.  All
notices and other communications hereunder shall be in writing and, unless
otherwise provided herein, shall be deemed duly given if delivered personally or
by telecopy or mailed by registered or certified mail (return receipt requested)
or by Federal Express or other similar courier service to the parties at the
following addresses or (at such other address for the party as shall be
specified by like notice)

    


    (i)  If
to the Company:

    


    Woozyfly
Inc.

    c/o MKM
Opportunity Master Fund, Ltd.

     420
Lexington Avenue, Suite 1718

    New York,
NY  10170

    Attn:  David
Skriloff


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    (ii) If
to the Consultant:

    


    Venor, Inc.

    1328 West Balboa, Suite C

    Newport Beach, CA 92661

    Attn: Eric Stoppenhagen

    


    Any such
notice, demand or other communication shall be deemed to have been given on the
date personally delivered or as of the date mailed, as the case may
be.

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Consulting,
Confidentiality, and Proprietary Rights Agreement as of the Effective Date
written above.

    


    Venor,
Inc.                                                                                   Woozyfly
Inc.

    


    


    By: ___/s/ Eric
Stoppenhagen_____________                               By:
/s/ Jonathan Bomser

    Eric
Stoppenhagen                                                                                  Name:Jonathan
Bomser

    President                                                                                   Title:
CEO

    


    


    MKM
Opportunity Master Fund, Ltd.

    


    


    By:__/s/ David
Skriloff_____________

                                                                                           Name: David
Skriloff

    Title: Portfolio
Manager


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Schedule

    


    


    1.   DUTIES AND OPERATIONAL
RESPONSIBILITIES:

    Consultant
shall provide financial consulting to the company.  It is anticipated
that the responsibilities shall constitute the restructuring of the
capitalization of the Company including the restructuring of the outstanding
debt, negotiations of any payables and liabilities, sale of any assets,
completion of the audit and the 10k, and the general clean-up of the Company
such that it can be successfully merged with another entity as soon as
possible.  It is anticipated that such work will last no more than 90
days.

    


    2.           REPORTING
SCHEDULE:

    Consultant
shall report regarding his actions on behalf of the Company; such reports shall
be given to David Skriloff of MKM Opportunity Master Fund, Ltd. not less
frequently than once per week.

    


    3.           COMPENSATION AND PAYMENT
TERMS:

    Consultant shall be prepaid the
following amount, by MKM
Opportunity Master Fund, Ltd. at the beginning of every month under the
following schedule.

    


    1st month
- $15,000

    2nd month -
$10,000

    3rd month -
$7,500

    4th month -
$5,000

    5th month -
$3.5k going forward

    


    Payment
shall be made by wire to the following:

    


    4           EXPENSES:

    MKM
Opportunity Master Fund, Ltd. agrees to reimburse Consultant for other
reasonably necessary expenses which shall be paid at the end of every month.
However, should such expenses exceed $1,000 in any given calendar month; such
expenses shall be pre-approved in advance by Company in order to qualify to
reimbursement. An email authorization by an officer of Company shall be deemed a
valid approval.