Exhibit 10.2
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of October 1, 2003 (this
"Agreement"), by and between Mr. Michael Jay Solomon, a resident of the State of
California (the "Executive"), and Pyramid Music Corp., a Florida corporation
(the "Company").
R E C I T A L S :
The Company engages in (i) a niche music business, focused on a
target audience of adults between the ages of 35 and 65 years of age, to produce
and distribute music on CD's, DVD's, tape, MP3 or other digital or non-digital
format, or through any other means to distribute music currently available or
that may be developed in the future, and (ii) the development of a digital cable
network for the distribution of such music, and other activities in connection
with the foregoing (the "Business").
The Company desires to employ the Executive as its Chief Executive
Officer, and the Executive desires to be employed by the Company in such
position, upon the terms and provisions, and subject to the conditions, set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties contained herein, and other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1. Employment; Term. The Company shall employ the Executive, and the
Executive shall accept employment by the Company, upon the terms and provisions,
and subject to the conditions, of this Agreement. The term of the Executive's
employment hereunder shall commence on and as of the date of the closing of a
debt or equity financing, or any combination of debt or equity financing (the
"Financing") with gross proceeds to the Company of approximately six million
dollars ($6,000,000), on terms and conditions reasonably satisfactory to the
Executive (the "Employment Date"). The term of the Executive's employment
hereunder shall commence on the Employment Date and terminate on the fifth (5th)
anniversary of the Employment Date (as the same may be extended in accordance
with this Section 1 or terminated earlier as provided in this Agreement, the
"Employment Term")). This Agreement shall automatically renew for successive two
(2) year periods following the initial five (5) year Employment Term and any
extensions thereof, if applicable, unless either party provides written notice
to the other party not less than ninety (90) days prior to the end of the
then-existing Employment Term, that such party does not desire the Employment
Term to automatically renew, in which event this Agreement shall terminate as of
the last day of the then-existing Employment Term. Notwithstanding anything to
the contrary contained in this Agreement, if the Financing does not occur on or
before December 1, 2003, the Executive, in his sole discretion, may, upon
written notice to the Company, terminate this Agreement in its entirety and,
upon such termination by the Executive, this Agreement shall be null and void ab
initio and of no force and effect.
2. Position and Duties.
(a) The Company shall employ the Executive, and the Executive
shall serve, as the Chief Executive Officer of the Company and its subsidiaries.
The Executive shall be responsible for overseeing and managing the Business,
including complete authority for the management of the day-to-day business,
operations and strategy of the Company and its subsidiaries, subject to the
ultimate authority of the Board of Directors of the Company. The Executive shall
have such additional responsibilities or duties with respect to the Company and
its subsidiaries, and their respective operations, as may be determined and
assigned to the Executive by the Board of Directors of the Company, which
responsibilities and duties shall generally be of a nature which may be assigned
to the most senior executive of the Company. The Executive shall report directly
to the Board of Directors of the Company.
(b) During the Employment Term, the Company and its Board of
Directors shall cause the Executive to be nominated to be elected as a director
to the Company's Board of Directors and the Executive shall serve at all times
during the Employment Term as the Chairman of the Board of Directors.
(c) The Company acknowledges that the Executive has
substantial and significant other business commitments, spends a substantial and
significant portion of his business hours on other business activities, and
serves as an officer and director of other entities and business enterprises
that require the Executive to devote substantially all of his business time to
such activities and enterprises. Accordingly, the Executive shall not be
required to devote any particular specific amount of time or energy to the
business of the Company. Subject to the foregoing, the Executive shall perform
his duties and obligations hereunder, including but not limited to assisting the
Company in achieving its goals and business plans as determined by the Board of
Directors from time to time, diligently, faithfully and competently, and with
the Executive's application of his abilities, skills, and judgment and in
accordance with ethical and professional standards. The Executive's principal
responsibility shall be setting strategy for the Company.
(d) Nothing in this Agreement shall prohibit the Executive
from serving as an officer or director of any entity or business enterprise, or
otherwise participating in educational, ____ welfare, social, religious and
civic organizations; provided, however, that during the Employment Term, the
Executive shall not serve as a director or officer of any entity or business
enterprise which engages in a business that competes directly with the Business.
(e) Nothing in this Agreement shall prohibit the Executive
from making any investments in the securities of any entity or business
enterprise; provided, however, that during the Employment Term, the Executive
shall not make any investments (other than "passive investments" as defined
below) in the securities of any entity or business enterprise which engages in a
business that competes directly with the Business. An investment shall be
considered a "passive investment" to the extent that such securities (i) are
actively traded on a United States national securities exchange, on the NASDAQ
National Market System or Small Cap Market System, on the OTC Bulletin Board, or
on any foreign securities exchange, and (ii) represent, at the time such
investment is made, less than five percent (5%) of the aggregate voting power of
such entity or business enterprise.
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(f) The Executive shall perform his duties from his current
offices located in Los Angeles, California. The Executive shall permit the
Company to utilize his Los Angeles, California offices, on terms and conditions
acceptable to the Executive, in his discretion.
(g) The Executive shall assist the Company in obtaining the
Financing by introducing the Company to potential financing sources. The other
senior executives of the Company will also be actively involved in obtaining the
Financing, including, but not limited to, preparing offering materials and
private placement memoranda, and performing "roadshow" presentations as may be
appropriate to accomplish the Financing.
3. Base Salary; Signing Bonus; Common Stock Bonus; Sale Bonus;
Performance Bonus.
(a) During the Employment Term, the Company shall pay to the
Executive an annual salary of four hundred thousand dollars and no cents (US
$400,000), as adjusted in accordance with Section 3(b) below (as adjusted, the
"Base Salary"). The Board of Directors, in its discretion, may increase (but not
decrease) the Base Salary from time to time. The Base Salary shall be payable in
equal quarterly installments during any year of the Employment Term; provided,
however, that such quarterly payments shall be made not later than fifteen (15)
days following the commencement of each quarterly period, and shall be subject
to withholding for applicable taxes and any other amounts generally withheld
from compensation paid to salaried senior executives of the Company. If the
Company's financial condition improves, as reasonably determined by its Board of
Directors, the Base Salary shall be paid to the Executive on a bi-weekly basis.
(b) The Base Salary shall increase annually by an amount equal
to the greater of (i) seven and one-half percent (7.5%) for each year of the
Employment Term, and (ii) the annual percentage increase in the consumer price
index (the "CPI") for Los Angeles, California as published by the Federal Bureau
of Labor Statistics (the "Bureau"), or any successor entity to the Bureau, in
each case multiplied by the then current Base Salary pursuant to Section 3(a);
provided, however, that if the Bureau no longer publishes the CPI, a comparable
index reasonably acceptable to the Company and the Executive shall be
substituted therefore.
(c) Simultaneously upon the Employment Date, the Company shall
pay to the Executive a signing bonus in the amount of one hundred thousand
dollars and no cents (US $100,000).
(d) Simultaneously upon the Employment Date, the Company shall
issue to the Executive such number of shares of its common stock, par value
$1.00 per share ("Common Stock"), equal to five percent (5%) of the Company's
then outstanding shares of Common Stock, after giving effect to the Financing,
on a fully diluted and as converted basis.
(e) If, during the Employment Term or for a period of eighteen
(18) months following the Employment Term, the Company (i) consummates a merger,
consolidation, sale of all or substantially all of its assets, or enters into a
business combination whereby, following such transaction, the Company is not the
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surviving corporation, (ii) enters into a transaction or series of transactions
with a person, group or entity resulting in the acquisition of fifty percent
(50%) or more of the then outstanding shares of Common Stock (or any other
securities with voting rights attached thereto), (iii) effects a change in the
majority of the Board of Directors of the Company, or (iv) enters into any
recapitalization or similar transaction resulting in a change in fifty percent
(50%) or more of the Common Stock (or any other securities with voting rights
attached thereto), then simultaneously with the consummation of any event set
forth in this Section 3(e)(i),(ii), (iii), or (iv) (each, a "Triggering Event"),
the Company shall pay to the Executive a bonus in cash in an amount equal to the
greater of (i) three million dollars ($3,000,000), and (ii) five percent (5%) of
the total Consideration (as defined below) paid, received or contributed by or
to the Company in connection with such Triggering Event (the "Sale Bonus"),
which Sale Bonus shall be up to a maximum amount of ten million dollars
($10,000,000) (the "Sale Bonus Cap"); provided, however, that in the event the
Executive introduces the party or parties entering into the Triggering Event
with the Company, the Sale Bonus Cap shall not be applicable. If any Sale Bonus
paid to the Executive hereunder is determined to be an "Excess Parachute
Payment" under Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the Company shall pay the Executive a sum equal to fifty percent
(50%) of an additional amount such that (x) the excess of all Excess Parachute
Payments (including any payments under this Section 3(e)) over the sum of excise
tax thereon under Section 4999 of the Code and income tax thereon under subtitle
A of the Code and under applicable state law is equal to (y) the excess of all
Excess Parachute Payments (excluding payments under this sentence) over income
tax thereon under Subtitle A of the Code and under applicable state law. The
above determination shall be made without regard to interest and penalties for
failure to pay or underpayment of taxes. For purposes of this Section 3(e),
"Consideration" shall mean (i) any cash and the "fair market value" (as
determined by an independent investment bank of national reputation or as
otherwise agreed to in writing by the Company and the Executive) of any
securities or other property, paid or payable at the time of the consummation of
the relevant Triggering Event or committed to be paid in the future, (ii) the
aggregate dollar amount of all indebtedness of the Company (including guarantees
of indebtedness of the Company or a third party) assumed, recapitalized or
restructured at the time of, or in connection with, the consummation of the
relevant Triggering Event, and (iii) any other contingent amounts.
(f) Following the end of each fiscal year of the Company
during the Employment Term, the Executive shall be eligible to receive a fiscal
year end bonus, payable in cash (the "Performance Bonus"). The Company shall pay
to the Executive the Performance Bonus if the Company attains the financial
performance targets for such fiscal year as determined prior to the beginning of
such fiscal year in good faith by the Board of Directors of the Company, in its
sole discretion. The Performance Bonus, if earned, shall be paid by the Company
to the Executive within thirty (30) days following the declaration by the Board
of Directors of the Company of the Performance Bonus to the Executive for the
prior fiscal year.
4. Expense Allowance; Business Expenses.
(a) The Company shall pay to the Executive, as a
non-accountable expense allowance, the amount of four thousand dollars and no
cents ($4,000.00) for each month of the Employment Term for the allocation of
certain business expenses to the Company, including the rental of a portion of
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the office space of the Executive's Los Angeles, California office, a portion of
amounts payable to the Executive's executive assistant and a portion of the
expenses for telephone, facsimile, photocopies and other general office expenses
(the "Expense Allowance"). The Expense Allowance shall be paid by the Company to
the Executive on the first day of each calendar month commencing on the
Employment Date.
(b) In addition to the Expense Allowance, the Company shall
reimburse the Executive for all necessary and reasonable expenses actually
incurred or paid by the Executive during the Employment Term in connection with
the performance of the Executive's duties and obligations to the Company in
accordance with this Agreement, in accordance with the Company's policies from
time to time in effect. Notwithstanding any Company policy to the contrary, in
connection with the Executive's business travel on behalf of the Company, the
Executive shall be entitled to first class hotel accommodations and first class
air travel for any flight that is greater than two (2) hours in duration.
5. Benefits; Indemnification and D&O Insurance.
(a) During the Employment Term, the Executive may (subject to
applicable eligibility requirements) participate in such insurance and health
and medical benefits as are generally made available to the senior executives of
the Company pursuant to such plans as are from time to time maintained by the
Company; provided, however, that the Company shall implement and maintain a
health and medical plan as soon after the Employment Date as is reasonably
practical and maintain such throughout the Employment Term. The Executive
acknowledges that his participation in any benefit plan may require the
Executive's co-payment of a periodic premium as a deduction from his salary.
(b) During each full year of the Employment Term, the
Executive shall be entitled to four (4) weeks of vacation. The Executive shall
take vacation at such time or times as the Executive desires based upon the then
current business needs and activities of the Company.
(c) During the Employment Term, the Executive shall be
entitled to receive such other benefits as may be provided to other senior
executives of the Company, including participation in the Company's 401(k) plan
and stock option plan.
(d) During the Employment Term, the Company shall indemnify
the Executive and hold the Executive fully harmless from and against all claims,
actions, suits, proceedings, liabilities, damages, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) which
may be incurred by the Executive in connection with the performance of his
duties hereunder, to the fullest extent permitted by applicable law and to the
extent no less than provided to any other senior executive officer of the
Company. In addition, on the Employment Date, the Company and the Executive
shall enter into an indemnification agreement containing terms and provisions
reasonably satisfactory to the Executive. During the Employment Term and for a
period of three (3) years thereafter, the Company shall maintain in full force
and effect (and pay all premiums which may be due in respect thereof) directors
and officers liability insurance coverage which shall provide not less than
three million dollars ($3,000,000) of coverage per occurrence and in the
aggregate.
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6. Covenant Not to Solicit.
(a) The Executive shall not, during the Employment Term and
the twenty four (24) month period following the Employment Term (the
"Restriction Period"), unless the employment of the Executive is terminated by
the Company Without Cause (as hereinafter defined) or by the Executive for Good
Reason (as such term is hereinafter defined), in either such instance the
Restriction Period shall only continue for so long as the Company fully
satisfies its obligations to the Executive under Section 11(e) or 11(f) hereof,
as applicable, directly or indirectly, solicit, entice, persuade, induce or
cause any employee, officer, manager, director, consultant, agent or independent
contractor of the Company to terminate his, her or its employment, consultancy
or other engagement by the Company to become employed by or engaged by any
individual, entity, corporation, ____ partnership, association, or other
organization (collectively, "Person") other than the Company, or approach any
such employee, officer, manager, director, consultant, agent or independent
contractor for any of the foregoing purposes, or authorize or assist in the
taking of any of such actions by any Person; provided, however, that,
notwithstanding anything to the contrary contained in the foregoing, the
Executive shall be entitled to employ or otherwise utilize the services of his
personal assistant in connection with any other business activity or enterprise
in which the Executive engages or otherwise participates.
(b) The Executive shall not, during the Restriction Period,
directly or indirectly, solicit, entice, persuade, induce or cause:
(i) any Person who is a customer of the Company at any
time during the Restriction Period; or
(ii) any lessee, vendor or supplier to, or any other
Person who had or has a business relationship with, the Company at
any time during the Restriction Period;
(the Persons referred to in items (i) and (ii) above, collectively, the
"Prohibited Persons") to enter into a business relationship with any other
Person for the same or similar services, activities or goods that any such
Prohibited Person purchased from, was engaged in with or provided to, the
Company or to reduce or terminate such Prohibited Person's business relationship
with the Company; and the Executive shall not, directly or indirectly, approach
any such Prohibited Person for any such purpose, or authorize or assist in the
taking of any of such actions by any Person.
(c) For purposes of this Section 6, the terms "employee",
"consultant", "agent", and "independent contractor" shall include any Persons
with such status at any time during the six (6) months preceding any
solicitation in question.
7. Non-Competition. Except as otherwise provided in this Agreement,
during the Employment Term and during the Restriction Period, unless the
employment of the Executive is terminated by the Company Without Cause, or by
the Executive for Good Reason, in either instance the Restriction period shall
only continue for so long as the Company fully exercises its obligations under
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Section 11(e) or 11(f) hereof, as applicable, the Executive shall not, anywhere
within the United States of America, directly or indirectly, alone or in
association with any other Person, directly or indirectly, (i) acquire, or own
in any manner, any interest in any Person that engages in the Business or that
engages in any business, activity or enterprise that competes with any aspect of
the Business, or (ii) be interested in (whether as an owner, director, officer,
partner, member, lender, shareholder, vendor, consultant, employee, advisor,
agent, independent contractor or otherwise), or otherwise participate in the
management or operation of, any Person that engages in any business, activity or
enterprise that competes with any aspect of the Business.
8. Protection of Confidential Information.
(a) The Executive acknowledges that prior to the date hereof
the Executive has had access to, and during the course of the Executive's
employment hereunder will have access to, significant Confidential Information
(as hereinafter defined). During the Restriction Period, (i) the Executive shall
maintain all Confidential Information in strict confidence and shall not
disclose any Confidential Information to any other Person, except as necessary
in connection with the performance of the Executive's duties and obligations
under this Agreement, and (ii) the Executive shall not use any Confidential
Information for any purpose whatsoever except in connection with the performance
of the Executive's duties and obligations under this Agreement.
(b) "Confidential Information" shall mean any and all
information pertaining to the Company and the Business, whether such information
is in written form or communicated orally, visually or otherwise, that is
proprietary, non-public or relates to any trade secret, including, but not
limited to, customer data, files, business secrets and business techniques.
Notwithstanding the foregoing, "Confidential Information" shall not include
information that (i) is or becomes generally available to, or known by, the
public through no fault of the Executive, or (ii) is independently acquired or
developed by the Executive without violating any of his obligations under this
Agreement.
9. Certain Additional Agreements.
(a) The Executive agrees that it is a legitimate interest of
the Company and reasonable and necessary for the protection of the goodwill and
business of the Company, which are valuable to the Company, that the Executive
make the covenants contained in Section 6, Section 7 and Section 8 of this
Agreement.
(b) The parties acknowledge that (i) the type and periods of
restriction imposed in the provisions of Section 6, Section 7 and Section 8 of
this Agreement are fair and reasonable and are reasonably required to protect
and maintain the proprietary and other legitimate business interests of the
Company, as well as the goodwill associated with the Business conducted by the
Company, (ii) the Business conducted by the Company [extends throughout the
United States], and (iii) the time, scope, geographic area and other provisions
of Section 6, Section 7 and Section 8 of this Agreement have been specifically
negotiated by sophisticated commercial parties represented by experienced legal
counsel.
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(c) In the event that any covenant contained in this
Agreement, including, without limitation, any covenant contained in Section 6,
Section 7, or Section 8 of this Agreement shall be determined by any court of
competent jurisdiction to be illegal, invalid or unenforceable by reason of its
extending for too great a period of time or over too great a geographical area
or by reason of its being too extensive in any other respect, (i) such covenant
shall be interpreted to extend over the maximum period of time for which it may
be legal, valid and enforceable, as applicable, and/or over the maximum
geographical area as to which it may be legal, valid and enforceable, as
applicable, and/or to the maximum extent in all other respects as to which it
may be legal, valid and enforceable, as applicable, all as determined by such
court making such determination, and (ii) in its reduced form, such covenant
shall then be legal, valid and enforceable, as applicable, but such reduced form
of covenant shall only apply with respect to the operation of such covenant in
the particular jurisdiction in or for which such adjudication is made. It is the
intention of the parties that such covenants shall be enforceable to the maximum
extent permitted by applicable law.
10. Specific Performance. The Executive acknowledges that any breach
or threatened breach of the covenants contained in Section 6, Section 7, Section
8 and Section 9 of this Agreement will cause the Company material and
irreparable damage, the exact amount of which will be difficult to ascertain and
that the remedies at law for any such breach or threatened breach will be
inadequate. Accordingly, the Executive agrees that the Company shall, in
addition to all other available rights and remedies (including, but not limited
to, seeking such damages as either of them can show it has sustained by reason
of such breach), be entitled to specific performance and injunctive relief in
respect of any breach or threatened breach of any of Section 6, Section 7,
Section 8 and Section 9 of this Agreement, without being required to post bond
or other security and without having to prove the inadequacy of the available
remedies at law or irreparable harm.
11. Termination.
(a) In the event of the death of the Executive during the
Employment Term, the Executive's employment hereunder shall automatically
terminate as of the date of death; provided, however, that the Executive's
estate or legal representative, as the case may be, shall be entitled to
receive, and the Company shall pay the Executive's estate or legal
representative, as the case may be, (i) the Base Salary owing to the Executive
hereunder through the date of death; (ii) the Sale Bonus; (iii) the Performance
Bonus; and (iv) any business expenses which were properly reimbursable to the
Executive pursuant to Section 4 hereof, through the date of termination. The
Executive shall be entitled to no further payment upon such termination.
(b) In the event of the Executive's Incapacity (as hereinafter
defined), the Company may, in its sole discretion, upon written notice to the
Executive, terminate the Executive's employment hereunder upon written notice to
the Executive; provided, however, that the Executive or the Executive's legal
representative, as the case may be, shall be entitled to receive, and the
Company shall pay the Executive or the Executive's legal representative, as the
case may be, (i) the Base Salary owing to the Executive hereunder through the
date the Executive receives written notice from the Company of his termination
due to Incapacity; (ii) the Sale Bonus; (iii) the Performance Bonus; and (iv)
any business expenses which were properly reimbursable to the Executive pursuant
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to Section 4 hereof through the date of termination. The Executive shall be
entitled to no further payment upon such termination. For purposes of this
Agreement, "Incapacity" shall mean the Executive's inability to perform his
duties and obligations hereunder on account of illness or other impairment for
six (6) consecutive months or such longer period as proscribed by applicable
law.
(c) The Company shall have the right to terminate the
Executive's employment under this Agreement at any time for Cause (as
hereinafter defined) upon written notice to the Executive. In the event the
Executive's employment hereunder is terminated by the Company for Cause, or the
Executive voluntarily terminates his employment with the Company prior to the
end of the Employment Term upon ninety (90) days prior written notice from the
Executive to the Company, the Executive shall be entitled to receive, and the
Company shall pay the Executive, (i) the Base Salary owing to the Executive
hereunder through the date of termination; and (ii) any business expenses which
were properly reimbursable to the Executive pursuant to Section 4 hereof through
the date of termination. The Executive shall be entitled to no further payment
upon such termination. The Executive acknowledges and agrees that each of the
factors which comprise the definition of "Cause" constitutes, on an individual
basis, adequate and sufficient grounds for termination of the Executive's
employment with the Company. If the Executive voluntarily terminates his
employment hereunder, it shall not be deemed a breach of this Agreement by the
Executive or a violation of the Executive's duties or obligations hereunder.
(d) For purposes of this Agreement, "Cause" shall mean:
(i) any material breach of any covenant of the Executive
contained in this Agreement, and the Executive's failure to cure
such breach within thirty (30) days of the Executive's receipt of
written notice with respect thereto;
(ii) any conviction of the Executive of or no contest
plea by the Executive to a felony; or
(iii) any illegal drug or illegal substance abuse,
illegal drug or illegal substance addiction, or chronic addition to
alcohol on the part of the Executive that renders the Executive
unable to perform his duties as set forth in this Agreement, other
than any drug use or use of medication prescribed by a doctor.
(e) The Company shall have the right to terminate the
Executive's employment hereunder without Cause at any time upon thirty (30) days
prior written notice to the Executive. If the Company terminates the Executive's
employment hereunder without Cause, the Executive shall be entitled to receive,
and the Company shall pay the Executive, in accordance with the Company's
regular payroll policy, (i) Base Salary owing to the Executive for the two (2)
year period from the date of termination (the period for which Base Salary shall
be owed to the Executive under this Section 11(e)(i) shall be referred to herein
as the "Severance Period"); (ii) the Sale Bonus; (iii) the Performance Bonus;
and (iv) any business expenses which were properly reimbursable to the Executive
pursuant to Section 4 hereof through the date of termination; and (iv) during
the Severance Period, the health, medical insurance and other benefits which are
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provided to the Executive in Section 5(a) hereunder. In addition, if the Company
terminates the Executive's employment hereunder without Cause, any stock options
granted by the Company to the Executive which have not vested or are not yet
exercisable shall automatically vest and become immediately exercisable by the
Executive commencing on the date of termination and for a period of five (5)
years following the date of termination.
(f) The Executive shall be entitled to terminate his
employment with the Company for Good Reason (as hereinafter defined) upon notice
to the Company of his intent to so terminate within thirty (30) days after he
has actual knowledge of the event giving rise to the notice and the Company
fails to cure the condition specified in the Executive's notice to the Company
required to be provided by this Section 11(f) within thirty (30) days following
such notice. If the Executive terminates his employment pursuant to this Section
11(f), such termination shall be deemed to be a termination by the Company
without Cause, with the same effect and affording to the Executive the same
rights and benefits as otherwise provided in this Agreement upon a termination
of the Executive's employment by the Company without Cause as provided in
Section 11(e) hereof.
(g) For purposes of this Agreement, "Good Reason" shall mean
the occurrence of any of the following events:
(i) the Executive is not retained as both Chairman and
Chief Executive Officer of the Company even if the Executive is
allowed to continue in the employ of the Company; or
(ii) the Company materially reduces the Executive's
duties and responsibilities hereunder; or
(iii) the Executive is removed from his position as a
member of the Board of Directors of the Company for any reason other
than in connection with the Executive's termination for Cause; or
(iv) the Company fails to perform or observe any of its
material obligations to the Executive under this Agreement
including, without limitation, by failing to provide or cause the
provision of, any compensation or benefits to the Executive that it
is obligated to provide hereunder; or
(v) the Company enters into any aspect of the fair and
carnival business or any business that is related thereto.
12. Miscellaneous.
(a) Notices. All notices, demands, consents, requests,
instructions and other communications to be given or delivered or permitted
under or by reason of the provisions of this Agreement or in connection with the
transactions contemplated hereby shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (i) if personally
delivered, on the business day of such delivery (as evidenced by the receipt of
the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, four (4) business days after being mailed, (iii) if
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delivered by overnight courier (with all charges having been prepaid), on the
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (iv) if delivered by facsimile
transmission, on the business day of such delivery if sent by 5:00 p.m. in the
time zone of the recipient, or if sent after that time, on the next succeeding
business day (as evidenced by the printed confirmation of delivery generated by
the sending party's facsimile machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 12(a)), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second business day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:
If to the Company, to:
11077 Biscayne Blvd.
Suite 101
Miami, Florida 33161
Facsimile No.: (305) 893-8036
Attn.: David Levy
with a copy to:
Blank, Rome, LLP
Attn: Bruce C. Rosetto, Esq.
1200 Federal Highway
Suite 417
Boca Raton, Florida 33432
If to the Executive, to:
Mr. Michael Jay Solomon
Solomon Entertainment Enterprises, Inc.
9350 Wilshire Boulevard, Suite 212
Beverly Hills, California 90212
Facsimile No.: (310) 205-6296
with a copy to:
Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Facsimile No.: (212) 704-6288
Attn.: Martin Eric Weisberg, Esq.
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or to such other address as any party may specify by notice given to the other
party in accordance with this Section 12(a).
(b) Amendment. This Agreement may not be modified, amended,
altered or supplemented, except by a written agreement executed by each of the
parties hereto.
(c) Entire Agreement. This Agreement contains the entire
understanding and agreement of the parties relating to the subject matter hereof
and supersedes all prior and/or contemporaneous understandings and agreements of
any kind and nature (whether written or oral) among the parties with respect to
such subject matter, all of which are merged herein.
(d) Waiver. Any waiver by a party hereto of any breach of or
failure to comply with any provision or condition of this Agreement by any other
party hereto shall not be construed as, or constitute, a continuing waiver of
such provision or condition, or a waiver of any other breach of, or failure to
comply with, any other provision or condition of this Agreement, any such waiver
to be limited to the specific matter and instance for which it is given. No
waiver of any such breach or failure or of any provision or condition of this
Agreement shall be effective unless in a written instrument signed by the party
granting the waiver and delivered to the other party hereto in the manner
provided for hereunder in Section 12(a). No failure or delay by any party to
enforce or exercise its rights hereunder shall be deemed a waiver hereof, nor
shall any single or partial exercise of any such right or any abandonment or
discontinuance of steps to enforce such rights, preclude any other or further
exercise thereof or the exercise of any other right.
13. Governing Law; Jurisdiction.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to agreements
made and to be performed in that state, without regard to any of its principles
of conflicts of laws or other laws that would result in the application of the
laws of another jurisdiction.
(b) Notwithstanding anything herein to the contrary, all
disputes among the parties arising out of or relating to this Agreement shall be
resolved by final and binding arbitration in Los Angeles, California, conducted
by a single arbitrator pursuant to the commercial arbitration rules of the
American Arbitration Association. Depositions may be taken and other discovery
may be obtained during such arbitration proceedings to the same extent as
authorized in civil juridical proceedings. Any award issued as a result of such
arbitration shall be final and binding between the parties thereto and not
subject to any judicial review whatsoever, and shall be enforceable by any court
having jurisdiction over the party against whom enforcement is sought. The
parties shall cause the arbitrator to reduce its findings of fact and
conclusions of law to writing. The parties shall direct the arbitrator to
allocate the responsibility to pay the costs and expenses of the arbitration
(including, but not limited to, attorneys' fees and expenses and the costs of
the arbitrator) between the parties to the arbitration on the basis of the
relative extent to which the arbitrator determines the parties have prevailed in
the arbitration. In addition, each party shall be entitled to collect its costs
and expenses (including, but not limited to, attorneys' fees and expenses)
incurred in enforcing any arbitration award.
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(c) Each of the parties unconditionally and irrevocably
consents to the exclusive jurisdiction of the courts of the State of California
and the federal district court for the Southern District of California with
respect to any suit, action or proceeding arising out of or relating to this
Agreement that cannot be resolved by arbitration hereunder or for the purpose of
enforcing any arbitration award hereunder, and each of the parties hereby
unconditionally and irrevocably waives any objection to venue in any such court
or to assert that any such court is an inconvenient forum, and agrees that
service of any summons, complaint, notice or other process relating to such
suit, action or other proceeding may be effected in the manner provided in
Section 12(a) hereof. Each of the parties hereby unconditionally and irrevocably
waives the right to a trial by jury in any such action, suit or other
proceeding.
14. Binding Effect, No Assignment, etc. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective legal representatives, heirs, estate, successors and permitted
assigns. Neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any party hereto without the prior written consent of the
other party, and any attempt to do so shall be void and of no force and effect,
except (i) assignments and transfers by operation of law and (ii) that the
Company may assign any or all of its respective rights, interests and
obligations hereunder to any purchaser of a majority of the issued and
outstanding capital stock of the Company or a substantial part of the assets of
the Company.
15. Third Parties. Except as expressly permitted by Section 12(f)
hereof, nothing herein is intended or shall be construed to confer upon or give
to any Person, other than the parties hereto, any rights, privileges or remedies
under or by reason of this Agreement.
16. Headings. The section headings contained in this Agreement are
inserted for reference purposes only and shall not affect in any way the
meaning, construction or interpretation of this Agreement. Any reference to the
masculine, feminine, or neuter gender shall be a reference to such other gender
as is appropriate. References to the singular shall include the plural and vice
versa.
17. Drafting History. This Agreement shall be construed and
interpreted without regard to any presumption against the party causing this
Agreement to be drafted. The parties acknowledge that this Agreement was
negotiated and drafted with each party being represented by competent counsel of
its choice and with each party having an equal opportunity to participate in the
drafting of the provisions hereof and shall therefore be construed as if drafted
jointly by the parties.
18. Counterparts. This Agreement may be executed in two (2) or more
counterparts (including by facsimile signature, which shall constitute a legal
and valid signature), and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, and
all of which, when taken together, shall constitute one and the same document.
This Agreement shall become effective when one or more counterparts, taken
together, shall have been executed and delivered by all of the parties.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
PYRAMID MUSIC CORP.
By:
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Name:
Title:
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Michael Jay Solomon