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EXHIBIT 10.18
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of May 13, 1996 between NEW ENGLAND AUDIO
CO., INC., a Massachusetts corporation with a mailing address at 00 Xxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and XXXX XXXXXX, an individual
residing at 000 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000 (the
"Consultant").
WHEREAS, pursuant to an Asset Purchase Agreement (the "Asset Purchase
Agreement") dated as of the date hereof by and among the Company, Bryn Mawr
Radio & Television Centre, Inc., a Pennsylvania corporation (the "Seller"), and
the Consultant, the Company is acquiring the Assets (as defined in the Asset
Purchase Agreement) of the Seller;
WHEREAS, the Consultant owns all of the outstanding voting securities of
the Seller, and is currently the Chairman of the Seller; and the Consultant has
extensive and valuable knowledge of the Seller, its businesses, markets and
customers; and
WHEREAS, the Asset Purchase Agreement provides that the Consultant and
the Company execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
Company and the Consultant agree as follows:
1. TERM OF CONSULTING. The Company hereby retains the Consultant to
provide consulting services to the Company, and the Consultant hereby agrees to
provide consulting services to the Company, on the terms and conditions set
forth herein, for a period of seven years from and after the date hereof (the
"Consulting Period").
2. DUTIES. During the Consulting Period, the Consultant will be
available, upon reasonable notice and at reasonable times during normal business
hours, to render to the Company, on an as needed basis, such advice pertaining
to the Company's operation of the Seller Business (as defined in the Asset
Purchase Agreement) or otherwise pertaining to the retail sale of consumer
electronic and entertainment products as may be reasonably requested by the
President or Chairman of the Company. Consulting services hereunder may be
rendered by telephone or letter or in any other form as may be mutually agreed
upon by the parties hereto and need not be rendered in person. The Consultant's
obligation to provide services hereunder shall not prevent the Consultant from
engaging in any other services or activities, provided that such services are
not in contravention of this Consulting Agreement or the Consultant's covenants
under the Asset Purchase Agreement, including his covenants under Section 7.5
thereof. Consultant shall not be
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required to render any services hereunder which will require his travel beyond
twenty-five (25) miles from the current location of Seller's principal office as
000 Xxxxx Xxxxxxxxx Xxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx, and the Company
acknowledges that the Consultant spends extended periods of time outside of the
greater Philadelphia metropolitan area and will continue with such practice
during the Consulting Period.
3. COMPENSATION AND BENEFITS. Subject to the provisions of Section 5
below, during the Consulting Period the Company will pay the Consultant monthly
base compensation of $20,833.33 for each month during the first two years of the
Consulting Period (i.e., months one through twenty-four, inclusive), and
$4,166.66 for each month during years three through seven, inclusive, of the
Consulting Period (i.e., months twenty-five through eighty-four, inclusive)
("Compensation"). The Company will reimburse the Consultant for all reasonable
expenses paid or incurred by the Consultant with the prior approval of the
Company while traveling at the Company's request in connection with, or related
to, the rendering of consulting services under this Consulting Agreement, upon
presentation by the Consultant of such documentation, expense statements,
vouchers and other supporting information as the Company may reasonably request.
The Compensation and reimbursement for expenses as provided for in this Section
3 shall be the sole compensation paid to the Consultant for services rendered
pursuant to this Consulting Agreement. Without limiting the generality of the
foregoing, Consultant shall not be entitled to any fringe benefits or to
participate in any of the Company's plans providing for such fringe benefits.
In the event of the Consultant's death during the Consulting Period, the
Company shall pay to the Consultant's estate an amount equal to $750,000 less
all Compensation paid to the Consultant prior to his death, and this payment
shall be the Company's complete and exclusive liability to the Consultant or his
estate hereunder.
In addition, if the Company consummates, at any time during years four
through seven, inclusive, of the Consulting Period, an underwritten public
offering of its stock pursuant to an effective registration statement under the
Securities Act of 1933, and such public offering is for the account of the
Company to the public generally and provides net proceeds to the Company (after
underwriter commissions and discounts) of not less than $10,000,000, then the
remaining Compensation unpaid hereunder (i.e., $750,000 less all Compensation
previously paid to the Consultant) shall be prepaid within thirty (30) days
following the closing of such public offering. Such prepayment shall not operate
as a termination of this Agreement, and the Consultant shall continue to provide
consulting services hereunder through the remainder of the Consulting Period,
with no further Compensation to be due or owing to the Consultant.
4. NON-COMPETITION AND NON-DISCLOSURE. The Consultant acknowledges
that he has made certain covenants to the Company under the Asset Purchase
Agreement, including without limitation his covenants under Section 7.5 of the
Asset Purchase Agreement (which Section 7.5 includes, among other things, the
Covenant Not to Compete, as defined therein, and certain covenants relating to
non-disclosure of certain
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information). The Consultant hereby reaffirms such covenants, and agrees that
such covenants and this Section 4 shall survive, in accordance with their
respective terms, notwithstanding the expiration, cancellation or termination of
this Agreement.
5. RIGHT OF SETOFF. The Consultant agrees and acknowledges that during
the Consulting Period, the Company may setoff against the Compensation to be
paid hereunder any claims of the Company against the Consultant under the terms
of the Asset Purchase Agreement; PROVIDED THAT (a) before exercising such right
of setoff, the Company shall first send to the Consultant the notice required,
if and only if any notice is so required, by Section 9.14(E) of the Asset
Purchase Agreement with respect to such claim and (b) the Company shall only
exercise such right of setoff to the extent that payments are not being made to
the Company on account of such claim pursuant to Section 9.14(E)(iv) of the
Asset Purchase Agreement.
6. RELIEF IN CASE OF BREACH. The Company and the Consultant
acknowledge and agree that the Consultant's services hereunder are unique and
have a peculiar value to the Company, and that the Company cannot adequately be
compensated in money damages for their loss. Therefore, if the Consultant is in
breach of any provision of his obligations hereunder, the Company shall be
entitled, in addition to all other rights and remedies as may be provided by
law, to specific performance, injunctive and other equitable relief to prevent
or restrain a breach of this Agreement or to enforce this Agreement and its
provisions.
7. RELATIONSHIP. The relationship between the Consultant and the
Company shall be that of independent contractors and nothing in this Agreement
shall be construed to constitute either the Consultant nor the Company as a
partner, employee or agent of the other. Neither the Consultant nor the Company
shall have the authority to bind the other in any manner without the prior
written consent of the other.
8. NOTICES. For purposes of all notices required or permitted
hereunder, the provisions of Section 9.8 of the Asset Purchase Agreement are
hereby incorporated herein and made a part hereof.
9. GENERAL. This Consulting Agreement constitutes the entire agreement
between the Company and the Consultant and supersedes all prior agreements and
understandings, written or oral, relating to the subject matter hereof. This
Consulting Agreement may be amended, modified, changed or discharged, in whole
or in part, only in a written instrument executed by the Company and the
Consultant. The invalidity or unenforceability of any provision of this
Consulting Agreement shall not affect the validity or enforceability of any
other provision of this Consulting Agreement. The waiver of any breach or
default under this Consulting Agreement shall be valid only if in writing. Any
such waiver shall not constitute the waiver of the same breach or default on any
subsequent occasion or of any other breach or default. The Company may assign
its rights under this Consulting Agreement at any time (provided that no such
assignment shall relieve the Company of its obligations to the Consultant
hereunder unless the
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Consultant has previously consented to such assignment), but the Consultant may
not assign this Agreement, by operation of law or otherwise, and may not
delegate his duties hereunder. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, and subject to the
preceding sentence, the Consultant, his executors, estate and heirs. This
Agreement shall be governed by and construed, interpreted and enforced as a
sealed instrument under and in accordance with the laws of the Commonwealth of
Massachusetts, without regard to conflicts of laws principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
NEW ENGLAND AUDIO CO., INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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AGREEMENT
AGREEMENT dated as of April 23, 1997 between New England Audio Co., Inc., a
Massachusetts corporation (the "Company"), and Xxxx Xxxxxx, an individual (the
"Consultant"), Xxx Xxxxxx, an individual, and Bryn Mawr Radio & Television
Centre, Inc., a Pennsylvania corporation ("Bryn Mawr"). Reference is hereby made
to (a) that certain Consulting Agreement dated as of May 13, 1996 between the
Company and the Consultant (the "Consulting Agreement"), (b) that certain Escrow
Agreement dated as of May 13, 1996 between the Company, the Consultant, Bryn
Mawr, Xxx, and Xxxxxxxx & Xxxxxx, P.C., as escrow agent (the "Escrow Agent"),
and (c) that certain Asset Purchase Agreement dated as of May 13, 1996 between
the Company, the Consultant, Bryn Mawr, and Xxx (the "Purchase Agreement") and
the Guaranties referred to therein in favor of the Company by the Consultant and
Xxx (the "Guaranties").
WHEREAS, the parties wish to amend the Consulting Agreement, to request the
release of the Deposit (as defined in the Escrow Agreement) pursuant to the
Escrow Agreement and to take such other actions as herein described.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties, hereto, the
Company and the Consultant agree as follows:
1. AMENDMENT OF CONSULTING AGREEMENT. The Consulting Agreement is hereby
amended as follows:
A. AMENDMENT TO SECTION 1. Section 1 (entitled "Term of Consulting")
of the Consulting Agreement is hereby amended by deleting the word "seven" and
inserting in place thereof the word "four."
B. AMENDMENT TO SECTION 3. Section 3 (entitled "Compensation and
Benefits") is hereby deleted and replaced in its entirety with the following:
3. COMPENSATION AND BENEFITS. Subject to the provisions of Section 5
below, during the Consulting Period the Company will pay the Consultant
monthly base compensation of $20,833.33 for each month during the first
year of the Consulting Period (i.e., months one through twelve, inclusive,
representing the year ending May 13, 1997), and $4,166.66 for each month
during years three through four, inclusive, of the Consulting Period (i.e.,
months twenty-five through forty-eight, inclusive, representing the
two-year period ending May 13, 2000) ("Compensation"). No Compensation or
other payments (other than those described in the succeeding sentence) will
be paid to you during the second year of the
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Consulting Period (i.e., months thirteen through twenty-four, inclusive,
representing the year ending May 13, 1998). The Company will reimburse the
Consultant for all reasonable expenses paid or incurred by the Consultant
with the prior approval of the Company while traveling at the Company's
request in connection with, or related to, the rendering of consulting
services under this Consulting Agreement, upon presentation by the
Consultant of such documentation, expense statements, vouchers and other
supporting information as the Company may reasonably request. The
Compensation and reimbursement for expenses as provided for in this Section
3 shall be the sole compensation paid to the Consultant for services
rendered pursuant to this Consulting Agreement. Without limiting the
generality of the foregoing, Consultant shall not be entitled to any fringe
benefits or to participate in any of the Company's plans providing for such
fringe benefits.
In the event of the Consultant's death during the Consulting Period,
the Company shall pay the Consultant's estate an amount equal to $350,000
less all Compensation paid to the Consultant prior to his death, and this
payment shall be the Company's complete and exclusive liability to the
Consultant or his estate hereunder.
C. FULL FORCE AND EFFECT. Except as otherwise specifically amended as
set forth herein, the Consulting Agreement shall remain unchanged and in full
force and effect.
2. ESCROW RELEASE. The Company, Consultant Xxx and Bryn Mawr shall and
hereby do request the Escrow Agent to release the Deposit under the Escrow
Agreement and to deliver such Deposit to the Consultant for and on behalf of
the Consultant, Xxx and Bryn Mawr pursuant to the Consultant's authority as
attorney-in-fact for Xxx and Bryn Mawr under Section 10(f) of the Escrow
Agreement. Each of the Company, Consultant, Xxx and Bryn Mawr do hereby agree
and certify that such request constitutes "a joint written direction from the
Purchaser and the Seller" as that phrase is used in Section 5(a) of the Escrow
Agreement, and that a copy of this Section 2 shall be provided to the Escrow
Agent in connection therewith.
3. INSURANCE AMOUNTS. The Company hereby agrees that it shall pay to the
Consultant any amounts in excess of $67,000, if any, which the Company receives
from ITT Hartford Insurance Company on account of the theft of inventory and
other assets as well as business interruption of Bryn Mawr at its Xxxxxxxxx
Road location in November of 1995 pursuant to the specific insurance policy
which the Company acquired from Bryn Mawr and which insured against such loss.
In the event that the amount so received from ITT Hartford Insurance Company on
account of such loss under such policy is less than $67,000, the Consultant
shall not be responsible for paying the amount of any such deficiency to the
Company.
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4. GENERAL.
(a) The parties acknowledge and agree that the execution, delivery
and performance of this Agreement, including without limitation payment of the
amounts described in Section 3, above, are being made in settlement of certain,
specific indemnification claims which have arisen prior to the date hereof in
the aggregate amount of $650,000 by the Company against Bryn Mawr, the
Consultant and Xxx in connection with the Purchase Agreement, the Guaranties
and the transactions contemplated thereby. The parties further acknowledge and
agree that said settlement shall in no way affect any of the Company's rights
or remedies with respect to, or otherwise impact or affect, (1) such settled
claims to the extent exceeding, in the aggregate, $650,000, or (2) any other
claims the Company may have at any time and from time to time against Bryn Mawr,
the Consultant or Xxx, including without limitation any other such claims for
indemnification under the Purchase Agreement. In connection therewith, the
parties agree that neither the Purchase Agreement nor the Guaranties have been
in any way amended, modified or affected by this Agreement, and that said
Purchase Agreement (including without limitation Section 9.14 thereof), and
said Guaranties all remain in full force and effect for all purposes.
(b) This Agreement shall be governed by and construed, interpreted
and enforced as a sealed instrument under and in accordance with the laws of
the Commonwealth of Massachusetts, without regard to conflicts of laws
principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
/s/ Xxx Xxxxxx
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Xxx Xxxxxx
BRYN MAWR RADIO & TELEVISION
CENTRE, INC.
By: /s/ Xxxx Xxxxxx
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Title: Chairman of Board
NEW ENGLAND AUDIO CO., INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Title: President
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