Consulting Agreement
Exhibit
10.7
Consulting
Agreement (this “Agreement”)
is
entered into as of June 24, 2008, by and between Equity Media Holdings
Corporation, a Delaware corporation having offices at 0 Xxxxxxxxxxx Xxxxx,
Xxxxx
000, Xxxxxx Xxxx, Xxxxxxxx 00000 (“EMHC”),
and
NIA Broadcasting, LLC, a Texas limited liability company having offices at
16401
Chenal Valley Drive, No. 6102, Xxxxxx Xxxx, Xxxxxxxx 00000 (“Consultant”).
| Whereas, |
EMHC
and Consultant each desire that Consultant provide certain services
to
EMHC on the terms and conditions set forth herein;
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Now,
Therefore,
in
consideration of the premises and the covenants and conditions hereinafter
set
forth, the parties hereby agree as follows:
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1.
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Scope
of Services
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1.1.
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Commencing
on the date hereof, Consultant will conduct regular meetings and
discussions with members of EMHC’s management to assist and advise them on
matters concerning the affairs and business of EMHC and render such
other
consulting services and advice as may be agreed to from time to time
by
EMHC and Consultant (the “Consulting
Services”).
The Consulting Services will include the services set forth on Schedule
A
hereto. All Consulting Services shall be performed by an employee
of
Consultant designated with the approval of EMHC (the “Designated
Employee”).
Until otherwise agreed by Consultant and EMHC, the Designated Employee
shall be Xxxx Xxxxxx (“Ardman”).
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1.2.
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In
rendering the Consulting Services hereunder, Consultant and the Designated
Employee shall cooperate with EMHC and utilize professional skill
and
diligence to provide the expertise required in connection with such
services. The Designated Employee will devote not less than a majority
of
his business time to the Consulting Services and, if necessary, such
additional time as will be reasonably required for the proper performance
of the Consulting Services. Consultant and the Designated Employee
will
comply with EMHC’s Code of Ethics and other corporate policies and
procedures as in effect from time to
time.
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2.
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Compensation
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2.1.
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In
consideration of the performance of the Consulting Services, EMHC
shall
pay to Consultant, or an affiliated entity designated by Consultant,
a
monthly fee of Thirty Thousand Dollars ($30,000.00). Such amount
will be
increased by a minimum of 5% per month, effective on each anniversary
of
the date of this Agreement.
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2.2.
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EMHC
will reimburse Consultant for reasonable documented out-of-pocket
business
expenses borne by Consultant or any of its employees, directors or
officers in connection with the provision of the Consulting Services,
in
accordance with policies approved by EMHC’s board of directors, but
including travel expenses between San Antonio, Texas and Little Rock,
Arkansas to the extent such travel expenses have been reimbursed
to
Consultant prior to the date of this Agreement. Upon execution of
this
Agreement, EMHC shall pay Consultant the sum of Ten Thousand Dollars
($10,000.00) as partial reimbursement for legal fees and expenses
incurred
by Consultant in connection with the negotiation and preparation
of this
Agreement and other arrangements entered into between EMHC and
Consultant.
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2.3.
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All
payments under Section 2.1 shall be made in advance on the first
day of
each month against the issuance of valid invoices by Consultant to
EMHC.
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2.4.
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Consultant
shall be solely responsible for all taxes and other mandatory payments
with respect to the amounts payable by EMHC to Consultant under this
Agreement.
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2.5.
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In
consideration for Consultant entering into this Agreement and other
arrangements with EMHC, concurrently with the execution of this Agreement,
EMHC has paid Consultant the sum of One Hundred Seventy-Five Thousand
Dollars ($175,000.00). Consultant will also be paid Forty-three Thousand
Seven Hundred Fifty Dollars ($43,750.00) per month for each of the
four
monthly periods beginning July 1, 2008. The remaining three payments
will
be made upon the reasonable determination of the compensation committee
of
EMHC’s board of directors that Consultant has, during the period beginning
on the date of this Agreement and ending on the day prior to the
date on
which such payment is to be made, made himself reasonably available
and
has reasonably assisted with respect to the build-out of EMHC’s back-up
facility to be located in Chattanooga,
Tennessee.
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2.6.
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EMHC
shall hire Xxxxx Xxxxxx as an employee to assist the Consultant and
the
Designated Employee in the performance of their duties hereunder,
at an
annual salary not to exceed Seventy Thousand Dollars ($70,000.00),
with
fully-paid health insurance benefits in accordance with EMHC’s benefit
plans in effect from time to time and three (3) weeks vacation per
year.
Nothing in this Agreement, including the immediately preceding sentence,
shall confer upon Xx. Xxxxxx the rights of a third party beneficiary
of
any of the provisions of this
Agreement.
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3.
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Term
and Termination
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3.1.
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This
Agreement shall be effective as of the date hereof and shall remain
in
effect for a period of thirty-six (36) months thereafter. Either
party may
terminate this Agreement on written notice with immediate effect
upon a
breach of the other party’s obligations under this Agreement that is not
cured within thirty (30) days after receipt by the breaching party
of
written notice of such breach given by the non-breaching party. In
the
event of an alleged breach by Consultant that is disputed by Consultant,
EMHC shall continue to make payments to Consultant hereunder during
the
pendency of such dispute but for no more than twelve (12) months
and, if
such dispute is resolved adversely to Consultant, Consultant shall
return
to EMHC all payments so made upon
demand.
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2
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4.
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Office Space; Support Services |
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4.1.
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During
the term of this Agreement, Consultant shall be entitled to utilize
the
office space previously assigned to Ardman during his consultancy
prior to
the date hereof and EMHC shall provide Consultant and the Designated
Employee with support services of a similar character and scope to
those
provided by EMHC to Ardman prior to the date hereof, such office
space and
support services to be used by Consultant and the Designated Employee
in
connection with the provision of their services
hereunder.
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5.
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Independent
Contractor
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5.1.
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Consultant
is an independent contractor and is not an agent or employee of,
and has
no authority to bind, EMHC by contract or otherwise. Consultant will
perform the Consulting Services under the general direction of EMHC’s
board of directors or a designee thereof. Until Consultant is advised
otherwise, such designee is the person serving as Chief Executive
Officer
of EMHC.
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6.
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Rights
To Work Product
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6.1.
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Subject
to the provisions of Section 7, all work product produced by Consultant
within the scope of the Consulting Services and with the utilization
of
EMHC’s resources shall be deemed “work for hire” and all rights thereto
shall vest in EMHC.
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7.
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Special
Projects
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7.1.
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If,
during the period that this Agreement is in effect, Consultant develops
a
proposal or plan for a project that is not within the scope of
Consultant’s duties specified in Schedule A hereto (“Special
Project”),
other than projects developed by Consultant pursuant to agreements
with
third parties, Consultant shall provide to EMHC a written description
of
the Special Project. EMHC shall thereupon have a period of twenty-one
(21)
days to advise Consultant that it has determined that it will accept
the
Special Project for its own use and benefit. If EMHC so advises Consultant
within such twenty-one (21) day period, the provisions of Section
7.2 and
7.3 shall apply with respect to such Special Project. If EMHC does
not so
advise Consultant, Consultant shall be free to use the Special Project
for
his own benefit, including the right to sell or assign such Special
Project to a third party.
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7.2.
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If
EMHC so accepts a Special Project, EMHC shall thereafter pay to
Consultant, so long as EMHC operates such Special Project, no later
than
ninety (90) days after the end of each calendar year, 2.49% of the
EBITDA
of the accepted Special Project for such calendar year (or such shorter
period during which EMHC owned the accepted Special Project during
such
calendar year). As used in this Agreement, “EBITDA” means the earnings
derived by EMHC from the accepted Special Project (including the
“Unreliable Sources” project referred to in Section 7.4) before interest,
taxes, depreciation and amortization after exclusion of intercompany
expenses.
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7.3.
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If,
during or after the period during which this Agreement is in effect,
EMHC
sells to a third party a Special Project that it had accepted, it
shall
pay to Consultant, (a) upon the closing of such sale, an amount equal
to
4.9% of the gross sale price, net after deduction of the costs of
the sale
transaction, received by EMHC from the purchaser at the closing and
(b)
within ten (10) business days after received, 4.9% of any additional
gross
sale price received after the
closing.
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7.4.
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EMHC
agrees to fund up to $100,000 of total documented development and
syndication costs for the program called “Unreliable Sources,” subject to
Consultant, in conjunction with Xxxxx Xxxxxx, submitting a written
development plan that is reasonably satisfactory to EMHC addressing
both
business and creative direction of the program. The parties acknowledge
that “Unreliable Sources” is a presently ongoing program that will be
continued by EMHC during the term of this Agreement and that Consultant
shall have complete creative control of such program and act as host
of
the program during such term. Such program shall be deemed to be
an
accepted Special Project for which payment is to be made to Consultant
pursuant to Section 7.2 provided that, during the term of this Agreement,
the program is being operated in accordance with the written development
plan in all material respects. If such program is sold by EMHC to
a third
party during or after the term of this Agreement, EHMC shall pay
to
Consultant, (a) upon the closing of such sale, an amount equal to
4.9% of
the gross sale price, net after deduction of the costs of the sale
transaction, received by EMHC from the purchaser at the closing and
(b)
within ten (10) business days after received, 4.9% of any additional
gross
sale price received after the
closing.
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| 8. |
Miscellaneous
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8.1.
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Entire
Agreement.
This Agreement contains the entire agreement of the parties with
relation
to the subject matter hereof, and cancel and supersede all prior
and
contemporaneous negotiations, correspondence, understandings and
agreements (oral or written) of the parties relating to such subject
matter.
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8.2.
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Amendment.
This Agreement may not be modified or amended except by mutual written
agreement of the parties.
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8.3.
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No
Waiver.
No failure, delay of forbearance of either party in exercising any
power
or right hereunder shall in any way restrict or diminish such party's
rights and powers under this Agreement, or operate as a waiver of
any
breach or nonperformance by either party of any terms of conditions
hereof.
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8.4.
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Non-Disclosure
of Advice.
Except as may be required pursuant to the securities laws of the
United
States and as may otherwise be required by law or legal process or
its
regulatory authorities, EMHC shall not disclose to any third party
the
contents of any advice or materials provided by Consultant to EMHC
without
the prior written consent of Consultant, which consent shall not
be
unreasonably withheld.
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8.5.
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Confidentiality.
Consultant and its employees will keep strictly confidential all
information, whether written or oral, acquired from EMHC and its
agents
and advisors in connection with Consultant’s provision of Consulting
Services under this Agreement unless otherwise directed by EMHC,
except
information: (i) that was made available to the public prior to the
commencement of the provision by Consultant of Consulting Services
hereunder; (ii) that thereafter becomes available to the public other
than
through a breach by Consultant of its obligations hereunder; and
(iii)
except to the extent that Consultant is required by law or in connection
with legal process or legal or regulatory proceedings to disclose
such
information. If Consultant is required by legal process to disclose
any
such information, Consultant will provide EMHC with prompt notice
of such
requirement, so that such EMHC may seek an appropriate protective
order or
waive compliance with this
requirement.
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8.6.
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Assignment.
This Agreement is not assignable by Consultant. EMHC may assign this
Agreement to a subsidiary or affiliate but may not assign it to another
third party without Consultant’s prior written consent. Any attempt to
effect an assignment of this Agreement or any portion thereof except
in
accordance with the foregoing shall be null and
void.
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8.7.
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Severability.
In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable
in
any respect, such invalidity, illegality or unenforceability shall
not
affect any other provision hereof and this Agreement shall be construed
as
if such invalid, illegal or unenforceable provision had never been
contained herein
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| 8.8. |
Notices. Any
notice or other communication required or permitted to be given under
this
Agreement shall be in writing and shall be sufficiently given or
made by
delivery or by telecopy or similar facsimile transmission (receipt
confirmed) to the respective parties as
follows:
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if
to
EMHC, to:
0
Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx
Xxxx, Xxxxxxxx 00000
Attention:
General Counsel
Fax:
000-000-0000
Telephone:
000-000-0000
if
to
Consultant, to:
16401
Chenal Valley Drive, No. 6102
Little
Rock, Arkansas 7223
Attention:
Xxxx Xxxxxx, Manager
Fax:
000-000-0000
Telephone:
000-000-0000
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8.9.
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Any
notice so given shall be deemed conclusively to have been given and
received when so personally delivered or so telecopied or transmitted.
Either party may change its address by notice to the other in the
manner
set out above.
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8.10.
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Counterparts.
This Agreement may be executed in multiple counterparts, including,
without limitation, by facsimile signature, which taken together
shall
constitute a single document.
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8.11.
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Governing
Law and Jurisdiction.
This Agreement and the transactions contemplated hereunder shall
be
governed by and construed in accordance with the law of the State
of
Arkansas, without giving effect to rules respecting conflict of law
that
would cause the law of any jurisdiction other than the State of Arkansas
to be applied. The competent federal and state courts located in
the
County of Pulaski, State of Arkansas shall have sole and exclusive
jurisdiction to hear and resolve any disputes among the parties related
to
this Agreement.
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In
Witness Whereof,
the
parties have signed this Consulting Services Agreement as of the date first
set
forth above.
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Equity
Media Holdings Corporation
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NIA
Broadcasting, LLC
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By:
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Name:
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Name:
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Xxxx
Xxxxxx
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Title:
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Manager
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6
SCHEDULE
A
Consulting
Services
1. Oversee
engineering for EMHC and RTN, including, at EMHC’s direction, build-out of
network operating center for RTN in Tennessee.
2. Assist
in
operation of EMHC stations.
3. Assist
in
advertising sales for EMHC and RTN as directed by EMHC.
4. Assist
in
management of back-office systems personnel.
5. Assist
in
the operation of the C.A.S.H. System.
6. Assist
EMHC’s officers and employees in matters relating to EMHC’s business.
7. Other
duties as mutually agreed by EMHC and Consultant.
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