SKYLINE MULTIMEDIA
ENTERTAINMENT, INC.
EMPIRE STATE BUILDING
000 XXXXX XXXXXX, XXXXX 000
XXX, XX 00000
July 14, 1999
Mr. Xxxxxx Xxxxxxx
President
Logical Systems, Inc.
c/o Skyline Multimedia Entertainment, Inc.
Empire State Building
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Dear Xxxx:
Skyline Multimedia, Inc. (the "Company") hereby agrees to contract with Logical
Systems, Inc. ("Consultant") for the services of Xxxxxx Xxxxxxx ("Xxxxxxx") for
the position of Chief Executive Officer and Director of the Company for a period
of two years (the "Employment Term"). In such capacity, Xxxxxx Xxxxxxx shall be
covered and indemnified by the Company to the full extent of the Company's
Directors' and Officers' liability insurance.
The terms and conditions of this engagement are as follows:
This Agreement may be cancelled by either party with ninety (90) days
written notice.
The company will pay Consultant the gross monthly fee ("Fee") of $18,000,
which consists of the base amount of $15,000 per month plus 20% to cover the
cost of health, life, disability and other employment related costs.
In the event that the Company cancels this Agreement for any reason during
the Employment Term, or fails to offer to renew the Agreement, the Company will
pay a one-time termination fee equal to six months severance, plus one
additional month of severance for each month consultant has been employed at the
Company beyond May 1999, up to a maximum of twelve months severance.
If the event that a change of control of the Company occurs, the Company
shall pay to Consultant an incentive fee equal to the greater of 3% of the
transaction proceeds or $250,000; provided, however, that if a change of control
occurs during the twelve-month period following termination of this Agreement
and such change of control occurs in connection with negotiations that commenced
during the term of this Agreement, then Consultant shall be entitled to all such
incentive payments described in this Clause 4. As an incentive to improve
profitability, the Company shall pay a bonus to Consultant equal to 10% the
first $1,000,000 of annual EBITDA and 5% of EBITDA in excess of $1,000,000 per
year. This bonus may be paid semi-annually; provided, however, that upon the
termination of this Agreement, Consultant shall be paid any amounts accruing
under this Clause 5 on a pro rata basis up to and including such termination
date. In the event the Company survives through September 30, 1999 without the
necessity of a bankruptcy filing, the Company will pay Consultant a one-time
bonus of $50,000; provided, however that if the Company subsequently files for
bankruptcy with 15 days thereafter, the Company shall not be obligated under
this Clause 5 and Consultant shall return to the Company any funds previously
paid pursuant to this Clause.
This Agreement shall be deemed effective as of November 15, 1998.
Yours truly,
Skyline Multimedia, Inc.
/s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President of Finance
(As directed per Board Meeting of 8/4/99)
