EXHIBIT 10.7
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CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT is made as of March 1, 1999, between College
Television Network, Inc., a Delaware corporation (the "Network"), and C. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ("Consultant").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Consulting Relationship. The Network hereby hires Consultant upon the
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terms and conditions set forth in this Agreement for the period beginning on the
date hereof and ending as provided in Paragraph 4 hereof (the "Consulting
Period").
2. Position and Duties.
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During the Consulting Period, Consultant shall provide services to the
Network in connection with sales and promotions and shall devote his best
business and professional efforts to the conduct of the Network's business, and
shall devote an average of one (1) hour per business day to the business of the
Network. Consultant shall provide the Network with a monthly written report of
services provided each month within ten (10) days after the end of each month.
Including, but not limited to the foregoing, Consultant shall perform the
following services.
(i) assist the Network in obtaining permission from additional
colleges and universities to install its equipment in their common areas;
(ii) assist the Network in expanding its programming to
additional markets, such as international and military; and
(iii) attempt to secure advertising sales from contacts of
Consultant.
3. Base Compensation and Benefits.
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(a) Consultant shall receive a percentage commission (the "Commission
Bonus") equal to ten percent (10%) of any net revenue (after any applicable
agency fees) actually received by the Network from new sales procured by
Consultant for the Network, which is entered into during the Consulting Period
("Commissionable Receipts"). The Commission Bonus shall be paid to Consultant
monthly for Commissionable Receipts for the previous month. The Network shall
provide an accounting of earned Commission Bonuses to Consultant on a monthly
basis during the Consulting Period and at least every twelve (12) months after
the Consulting Period has expired. After the Expiration Date, Consultant shall
be entitled to the ten percent (10%) Commission Bonus for the remaining term of
any advertising contract in existence
on the Expiration Date, and a five percent (5%) Commission Bonus (rather than
10%) for the first written renewal contract for an advertiser for which
Consultant previously was paid a Commission Bonus during the Consulting Period
of this Agreement. In addition to the Commission Bonus, if Commissionable
Receipts during the Term of this Agreement exceed $500,000, Consultant shall
receive an additional $10,000 bonus and if the Commissionable Receipts during
the Term of this Agreement exceed $1,000,000, Consultant shall receive an
additional $25,000 bonus.
(b) The services to be provided by Consultant include assistance to
the Network in adding installations at military bases. If Consultant is
successful in this goal, the Network agrees to pay Consultant as a one-time
bonus $1.00 for each verified military viewer which allows the Network to
present to advertisers as increased total viewership (the "Military Bonus"), as
of the date of the agreement of the United States military to allow the Network
to install its systems. The Military Bonus shall be a one-time bonus, and shall
be paid on the date of substantial installation of the Network's system,
provided that the system must remain installed for at least twelve (12) months.
(c) During the Term of this Agreement, Consultant shall be paid $5,000
per month on the first day of each month commencing on March 1, 1999 as a draw
against the Commission Bonus and Military Bonus (the "Draw"). The Draw shall be
recouped out of the Commission Bonus and Military Bonus and shall be reconciled
on each anniversary of this Agreement or the termination of this Agreement
(whichever is sooner). Consultant shall not be liable for any Draw in excess of
Commission Bonus upon termination of this Agreement.
(d) The Network shall reimburse Consultant for all reasonable pre-
approved expenses incurred in the course of performing the duties under this
Agreement in accordance with the Network's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Network's requirements with respect to reporting and documentation of such
expenses.
4. Term. The "Consulting Period" shall commence on March 1, 1999 (the
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"Effective Date") and shall terminate upon thirty (30) days written notice by
either party to the other (the "Expiration Date").
5. Confidential Information. The Consultant acknowledges that the
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information, observations and data obtained while performing services for the
Network concerning the business or affairs of the Network ("Confidential
Information") are the property of the Network. Therefore, Consultant agrees
that, except in the performance of duties for the Network, that Consultant shall
not during the Consulting Period or for two (2) years after the termination of
this Agreement, for any reason whatsoever, disclose to any unauthorized person
or use for its or his own account any Confidential Information without prior
written consent of the Network, except (i) to the extent that the aforementioned
matters become generally known to and available for use by the public other than
as a result of Consultant's wrongful acts or wrongful omissions to act, (ii) as
necessary to comply with compulsory legal process, provided that Consultant
shall provide prior notice to the extent possible regarding such disclosure,
(iii) as necessary to counsel
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and other professional advisors retained by the Consultant, subject to the
attorney/client privilege or a valid and binding non-disclosure agreement
between Consultant and such professional and (iv) disclosures of information
obtained, to Consultant's knowledge from a third party free of restrictions or
disclosure of information in Consultant's possession which was obtained from a
source other than the Network or its predecessors. Consultant shall deliver, at
the Network's request and expense, to the Network at the termination of this
Agreement, all memoranda, notes, plans, records, reports, computer tapes and
software and other documents and data (and copies thereof) relating to
Confidential Information or the business of the Network which it, may then
possess or have under its or his control.
6. Inventions and Patents. Consultant agrees that all ideas, concepts,
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marketing strategies, management techniques, product development, methods,
designs, analyses, drawings, reports, and all similar or related information
which relates to the Network's actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Consultant, while providing services for the Network ("Work
Product") belong to the Network. Consultant will promptly disclose such Work
Product to the Network and perform all actions reasonably requested by the
Network (whether during or after the Consulting Period) to establish and confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
7. Non-Compete, Non-Solicitation.
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(a) Consultant acknowledges that in the course of providing services
for the Network he will become familiar with the Network's trade secrets and
with other confidential information concerning the Network and that their
services will be of special, unique and extraordinary value to the Network.
Therefore, Consultant agrees that, during the Consulting Period and for two
years after the termination of this Agreement, such termination being for any
reason whatsoever (the "Non-Compete Period"), he shall not directly or
indirectly manage, control, consult with or render services as an advisor,
consultant, officer or salesperson for any business competing with the business
of the Network, which is an information or entertainment network which has as
its primary business, marketing to colleges or universities (and military bases
if Consultant assists the Network in its expansion) (the "Business") within any
geographical area in which the Network engages or plans to engage in such
businesses, which is in the United States of America. Notwithstanding the
foregoing, nothing herein shall prohibit Consultant, from being a passive owner
of not more than 5% of the outstanding stock of any class of a company which is
publicly traded that competes with the Business, so long as Consultant has no
active participation in the management or the business of such company.
(b) During the Non-Compete Period, Consultant shall not directly or
indirectly, on behalf of any Person in the Business solicit, encourage, entice
or induce (or attempt to do any of the foregoing) a customer of Network with
whom Consultant had contact while providing services for the Network to cease
doing business with Network.
(c) During the Consulting Period and for eighteen months thereafter,
Consultant shall not directly or indirectly through another entity (i) knowingly
solicit, encourage,
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interview, entice, discuss with or induce or attempt to induce any employee of
the Network to leave the employ of the Network, or in any way interfere with the
relationship between the Network and any employee thereof, (ii) knowingly hire
any person who was an employee of the Network at any time during the Consulting
Period or (iii) knowingly induce or attempt to induce any customer, supplier,
licensee or other business relation of the Network to cease doing business with
the Network, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Network.
8. Enforcement. If, at the time of enforcement of paragraphs 5, 6 or 7 of
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this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope and area.
Because Consultants' services are unique and because the Consultant has access
to Confidential Information and Work Product, the parties hereto agree that
money damages would be an inadequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Network or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provision hereof (without posting a bond or
other security).
9. Consultant Representations. Consultant hereby represents and warrants
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to the Network that (i) the execution and performance of this Agreement by
Consultant does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Consultant is a party or by which he is bound, and (ii) Consultant is not
a party to or bound by any consulting agreement, employment agreement, non-
compete agreement or confidentiality agreement with any other person or entity,
which would prohibit his performance under this Agreement.
10. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by telecopy or reputable
overnight courier service (charges prepaid) to the recipient at the address or
telecopy number below indicated:
Notice to Consultant:
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Notices to Network:
College Television Network, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
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With a Copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, LLP
1600 Atlanta Financial Center
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or such other address or telecopy number or to the attention of such other
person as the recipient party shall have specified by prior written notice to
the sending party. Any notice under this Agreement will be deemed to have been
given when so delivered or sent or, if mailed, five days after deposit in the
U.S. mail.
11. Severability. Whenever possible, each provision of this agreement
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will be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12. Complete Agreement. This Agreement embodies the complete agreement
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and understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way. This
Agreement supersedes any previous Consulting Agreements between Consultant and
the Network.
13. Counterparts. This Agreement may be executed in separate
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counterparts, each of which to be an original and all of which taken together
constitute one and the same agreement.
14. Successors and Assigns. This Agreement is intended to bind and inure
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to the benefit of and be enforceable by all parties and their respective heirs,
successors and assigns, except that Consultant may not assign his rights or
delegate his obligations hereunder without the prior written consent of the
Network.
15. Amendment and Waiver. The provisions of this Agreement may be amended
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or waived with the prior written consent of the Network and Consultant, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
16. Independent Contractor. Consultant does hereby agree and acknowledge
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that he is an independent contractor, which controls his own day to day
activities and are not employees, joint venturers or partners of the Network.
Further Consultant shall not have the ability to bind Network and all
advertising sold must be approved by the Network. Consultant shall indemnify
and hold harmless the Network for any taxes owed by Consultant which may be
assessed against the Network.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COLLEGE TELEVISION NETWORK, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
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Its:Chief Executive Officer
CONSULTANT:
/s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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