CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of January 1, 2001, by and between GEM
COMMUNICATIONS, LLC, a Delaware limited liability company ("Company"),
CASINO JOURNAL PUBLISHING GROUP, INC., a Nevada corporation
("Consultant"), XXXXX XXXX and XXXX XXXX (collectively, the "Fines"):
Background
The Company owns and operate a business that publishes trade
magazines and newsletters and organizes trade shows for the gaming
industry (the "Business").
The Company wishes to retain the services of Consultant and
Consultant wishes to be engaged by the Company on the terms and
conditions set forth in this Agreement.
In consideration of the mutual covenants and agreements set forth
herein, the parties hereto, intending to be legally bound hereby, agree
as follows:
ARTICLE I
TERM OF AGREEMENT
Section 1.01 Commencing on the date of this Agreement and for
a period ending on December 31, 2003, subject to earlier
termination as provided in Article VI hereof, the Company
hereby engages Consultant and Consultant hereby accepts such
engagement with the Company to provide the services (the
"Services") set forth on Schedule A. Consultant agrees that
the Services hereunder shall be performed by the Fines. The
Company, the Official Information Company ("TOIC") and the
Company's and TOIC's subsidiaries are collectively referred to
below as the "Related Entities."
ARTICLE II
DUTIES AND OBLIGATIONS OF CONSULTANT
Section 2.01 At all times during the performance of this
Agreement, Consultant shall, and shall cause the Fines to,
adhere to each Related Entity's policies, rules and regulations
governing the conduct of its employees and contractors, now in
effect, or as subsequently adopted or amended.
Section 2.02 Consultant shall cause the Fines to devote their
best efforts and such amount of their time to the business of
the Company as is reasonably necessary and appropriate to meet
the reasonable goals and objectives of the Company.
ARTICLE III
FEES
Section 3.01 As full compensation for the Services hereunder,
the Company shall pay Consultant a monthly fee of Twelve
Thousand Five Hundred ($12,500) (the "Fee").
Section 3.02 In addition to the Fee, the Company shall pay
Consultant a bonus (the "Bonus") within 90 days following the
end of each fiscal year during the term of this Agreement equal
to $125,000 in the event that the Company's EBITDA for such
year equals or exceeds the amounts set forth below with respect
to such year:
$2,300,000
$2,540,000
$3,525,000
As used in this Agreement, the term "EBITDA" means the
consolidated earnings of the Company before interest, taxes,
depreciation and amortization, excluding extraordinary or
unusual nonrecurring items of income and expense, determined in
accordance with generally accepted accounting principles by the
Company's independent accountants. EBITDA shall be calculated
after taking into account the payment of any Bonuses.
Section 3.03 The Consultant accepts full and exclusive liability
for the payment of any and all taxes including federal, state and local
income taxes and taxes for unemployment insurance or other social
security legislation now or hereafter imposed by federal or state
governments, which are measured by amounts paid to the Consultant or
otherwise arise out of the Services.
ARTICLE IV
BENEFITS
Section 4.01 It is expressly understood and agreed that the
Consultant is an independent contractor and that neither
Consultant nor the Fines shall be deemed or construed to be an
employee of the Company nor entitled to any benefits of an
employee of the Company such as, but not limited to, worker's
compensation, group insurance, vacation, holiday pay,
unemployment insurance and welfare or pension benefits.
ARTICLE V
BUSINESS EXPENSES
Section 5.01 The Company shall reimburse Consultant, in
accordance with the Company's policies, for all reasonable out-
of-pocket business expenses incurred by Consultant in the
performance of its duties hereunder. Consultant shall furnish
to the Company documentary evidence of each such expense in the
form required to comply with the Company's policies and all
applicable federal and state tax statutes and regulations
issued thereunder for the substantiation of such expense as a
tax deduction.
ARTICLE VI
TERMINATION OF AGREEMENT
Section 6.01 Termination. The Company may terminate this
Agreement at any time for Cause by giving written notice of
such termination to Consultant. For purposes of this
Agreement, cause shall mean:
(a) The conviction of Consultant or the Fines of a felony;
(b) Fraud, embezzlement or other misappropriation by
Consultant or the Fines of funds or property of the Company or any of
its affiliates;
(c) Any action that would constitute a breach of any of
their fiduciary duties if the Fines were employed as an employee of the
Company;
(d) Any gross misconduct of Consultant or the Fines which is
injurious in any material respect to the Company or any of its
affiliates; or
(e) Consultant's failure to perform in any material respect
its obligations under this Agreement.
If the Company terminates this Agreement for Cause under this
Section 6.01, Consultant shall cease receiving their Fee as of the date
of such termination and shall not be entitled to any further pay or
compensation.
ARTICLE VII
NON-COMPETITION, CONFIDENTIALITY
AND NON-SOLICITATION COVENANTS
Section 7.01 Consultant and the Fines acknowledge that
Consultant's services hereunder will provide Consultant and the
Fineswith access on a continual basis to confidential and
proprietary information concerning the Business, which is not
readily available to the public; and that the Company would not
enter into this Agreement but for the covenants (the
"Restrictive Covenants") contained in this Article VII.
Accordingly, Consultant and the Fines agree that:
(a) During the term of this Agreement and, for a period of one
(1) year thereafter (the "Restricted Period"), neither Consultant nor
the Fines shall, directly or indirectly, (i) engage in any business
that is competitive with the Business for their own account; or (ii)
render any services which constitute engaging in any business that is
competitive with the Business in any capacity to any person (other than
with the consent or at the direction of the Company); nor shall
Consultant or the Fines own an equity interest in any person which is
engaged in any business that is competitive with the Business. Neither
Consultant nor the Fines shall be in breach of their obligations
hereunder by reason of (i) their ownership of less than one percent
(1%) of the outstanding debt or equity of any publicly traded company,
regardless of whether such publicly traded company competes with the
Business or with GEM, or (ii) their publication, in whatever format or
media, of any magazine, newsletter or other periodical substantially
similar to any Retained Asset (as such terms are defined in the Asset
Contribution Agreement dated the date hereof among GEM, Consultant and
certain other parties).
(b) Consultant and the Fines shall forever maintain in
strictest confidence all information relating to the Business and to
each of the Related Entities, which is known or becomes known to
Consultant or the Fines, including, without limitation, trade secrets,
know-how, financial statements and data, contracts (whether oral or
written), customer and advertiser lists, rate schedules, pricing
policies, marketing plans and strategies, and business acquisition
plans (collectively, the "Confidential Information"), and shall not,
except in connection with the business affairs of the Company and its
affiliates, disclose any Confidential Information to any person, other
than with the express written consent of the Company. Confidential
Information shall not include information which Consultant or the Fines
can demonstrate (A) has become generally available to the public other
than as a result of a disclosure by Consultant or the Fines, (B) was
available to Consultant or the Fines on a non-confidential basis prior
to its disclosure to Consultant or the Fines by the Company or any
Related Entity, or (C) has become available to Consultant or the Fines
on a non-confidential basis from a source other than the Company,
provided that such source is not known by Consultant or the Fines after
reasonable inquiry to be bound by a confidentiality agreement with the
Company or otherwise prohibited from transmitting the information to
Consultant or the Fines by a legally binding obligation.
Notwithstanding anything in this Agreement to the contrary, in the
event that a request or demand is made upon Consultant or the Fines, by
written interrogatory, request for information or documents, subpoena,
court order, civil investigative demand or other legal process, to
disclose any Confidential Information, which disclosure is not
otherwise permitted hereunder, Consultant or the Fines, as the case may
be, will provide the Company with prompt notice of any such request or
demand so that the Company may seek an appropriate protective order or
waive compliance with the provisions of this Agreement. Consultant and
the Fines will not oppose action by, and will cooperate with, the
Company in any effort to obtain an appropriate protective order.
All memoranda, notes, lists, records and other documents (and all
copies thereof) constituting Confidential Information heretofore or
hereafter made or compiled by Consultant or the Fines or made available
to Consultant or the Fines concerning the Business shall be the
property of the respective Related Entities, shall be kept confidential
in accordance with the provisions of this Section 7.01(b), and shall be
delivered to the respective Related Entities promptly upon termination
of this Agreement or at any earlier or later time upon the request of
the Company.
(c) During the Restricted Period, neither Consultant nor the
Fines shall, directly or indirectly, solicit or encourage any
current employee, officer or director of any of the Related
Entities to leave the employment of their employer, or hire any
current or former employee, officer or director of, any of the
Related Entities.
(d) During the Restricted Period, neither Consultant nor the
Fines shall, directly or indirectly, solicit or encourage any
person who is a customer or advertiser of any of the Related
Entities, or the affiliates or associates thereof, to
discontinue such person's business relationship with any of the
Related Entities.
Section 7.02 Consultant and the Fines acknowledge and agree
that (i) Consultant and the Fines have had an opportunity to
seek advice of counsel in connection with this Agreement; (ii)
the Restrictive Covenants are reasonable in scope and in all
other respects; (iii) any violation of the Restrictive
Covenants will result in irreparable injury to the Related
Entities; (iv) money damages would be an inadequate remedy at
law for the Related Entities in the event of a breach of any of
the Restrictive Covenants by Consultant or the Fines; and (v)
specific performance in the form of injunctive relief would be
an adequate remedy for the Related Entities.
The Company, Consultant and the Fines agree that if Consultant or
the Fines breach or threaten to breach a Restrictive Covenant, the
Company (or any of the other Related Entities) shall be entitled, in
addition to all other remedies, to an injunction restraining any such
breach, without any bond or other security being required and without
the necessity of showing actual damages.
ARTICLE VIII
ARBITRATION
Section 8.01 Except as otherwise set forth in Section 7.02
above, the Company, Consultant and the Fines each waives any
right each may have to a civil lawsuit and trial by jury in
connection with any dispute between them arising out of,
concerning or connected with this Agreement and each agrees
that, upon the written request of the other party, any such
dispute shall be submitted to arbitration. Arbitration shall
take place in the State of New York, or such other place as the
parties may agree, and shall be governed by the rules of the
American Arbitration Association.
Section 8.02 The Company and Consultant shall select one (1)
arbitrator to hear and determine the dispute from a list of
five (5) candidates provided by the American Arbitration
Association.
Section 8.03 The arbitrator's award shall be final and
binding on the parties and the arbitrator may invoke any remedy
available in equity or at law, including, without limitation,
injunctions and restraining orders. The parties agree to the
jurisdiction of any court of competent jurisdiction for
confirmation and enforcement of the arbitrator's award.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 In the event of arbitration or an action at law
or in equity to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs. The arbitrator's fees and costs
incurred shall be allocated by the arbitrator.
Section 9.02 This Agreement supersedes any and all other
agreements, whether oral or in writing, between the parties
hereto with respect to the subject matter hereof. Each party
acknowledges that no representations, inducements, promises or
agreements, whether oral or in writing, have been made by any
party, or on behalf of any party, which are not embodied
herein. No agreement, promise or statement not contained in
this Agreement shall be valid and binding, unless agreed to in
writing and signed by the parties sought to be bound thereby.
Section 9.03 Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered
personally, faxed, or sent by courier service (with next day
delivery requested) or the U.S. Postal Service by express mail
(with next day delivery requested). Any such notice or
communication shall be deemed given and effective, in the case
of personal delivery, upon receipt by the other party, in the
case of faxed, upon transmission of the fax, in the case of a
courier service or the U.S. Postal Service, upon the next
business day, after dispatch of the notice or communication.
Any such notice or communication shall be addressed as follows:
If to the Company:
GEM Communications, LLC
C/o The Official Information Company
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
If to Consultant or the Fines:
Any person named above may designate another address or fax number by
giving notice in accordance with this Section to the other persons
named above.
Section 9.04 This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York,
without regard to principles of conflicts of law.
Section 9.05 No breach of any provision hereof may be waived
unless in writing. Waiver of any breach of any provision
hereof shall not be deemed a waiver of any other breach of the
same or any other provision hereof. This Agreement may be
amended only by a written agreement, executed by the parties
hereto.
Section 9.06 In the event any one or more of the provisions
contained in this Agreement shall be held by an arbitrator or
court of competent jurisdiction to be invalid or unenforceable
in any respect, the validity and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable
provision in light of the tenor of this Agreement, and, upon so
agreeing, shall incorporate such substitute provision in this
Agreement.
Section 9.07 This Agreement may be executed in any number of
counterparts and each such duplicate counterpart shall
constitute an original, any one of which may be introduced in
evidence or used for any other purpose without the production
of its duplicate counterpart. Moreover, notwithstanding that
any of the parties did not execute the same counterpart, each
counterpart shall be deemed for all purposes to be an original,
and all such counterparts shall constitute one and the same
instrument, binding on all the parties hereto.
Section 9.08 The parties hereto acknowledge that they have
had the advice of counsel before entering into this Agreement,
have fully read the Agreement and understand the meaning and
import of all the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first above written.
GEM COMMUNICATIONS, LLC
By:_______________________________
Ian X.X. Xxxxxx
Chairman of the Board
CASINO JOURNAL PUBLISHING
GROUP, INC.
By:______________________
________________________
Xxxx Xxxx
_________________________
Xxxx Fine
SCHEDULE A
Duties and Responsibilities
Xxxx Xxxx:
Xxxx Xxxx would serve as Corporate Editorial Director of GEM. His
responsibilities would include:
As a member of the editorial board, contribute toward defining the
editorial position of all of GEM products and fulfilling the mission of
the editorial board.
Working with the EVP Group Publisher, evaluate the quality of the
editorial and production staff and organization and recommend any
actions that may be necessary to correct deficiencies.
Function as the Editorial Executive directly responsible for the
supervision and management of the Editorial staff of CE and CJ.
As the Editorial Executive responsible for CE and CJ, recommend the
appropriate editorial positioning for these publications to the
Editorial board.
As the Editorial Executive responsible for CE and CJ, recommend any
changes to the publication frequency or format or design to the
Editorial board.
Be responsible for suggesting in a timely manner specific editorial
content (e.g., feature articles) and use his contacts in the industry
to facilitate the same
Xxxxx Xxxx:
Xxxxx Xxxx would serve as Corporate Publishing Director of GEM. His
responsibilities would include:
As a member of the editorial board, contribute toward defining the
editorial position of all of GEM products and fulfilling the mission of
the editorial board.
Working with the EVP Group Publisher, evaluate the quality of the sales
and marketing staff and organization and recommend any actions that may
be necessary to correct deficiencies.
Working with the EVP Group Publisher, recommend actions to improve the
effectiveness of the sales organization to meet the needs of the
clients while leveraging the combined CJ and GEM products.
Leverage his existing client relationships to maximize the sales
opportunities of the combined GEM and CJ products.
Function as the Executive directly responsible for the supervision and
management of the Sales staff of CE and CJ and be responsible for them
attaining their goals.
