Document:

EX-10.20 Unit Purchase Agreement

 

EXHIBIT
10.20

EQUITY MEDIA HOLDINGS CORPORATION

UNIT PURCHASE AGREEMENT

     THIS UNIT PURCHASE AGREEMENT (the “Agreement”) is made as of the 21st day of June,
2007, by and among Equity Media Holdings Corporation, a Delaware corporation (the
“Company”), and the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and collectively, the “Buyers”).

RECITALS

     WHEREAS, the Company and each Buyer is executing and delivering this Agreement in reliance
upon the exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and Rule 506 of Regulation D as promulgated by the
Securities and Exchange Commission (the “Commission”) under the Securities Act;

     WHEREAS, each Buyer, severally and not jointly, wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement, that aggregate number of units (each
a “Unit” and collectively, the “Units”) set forth opposite such Buyer’s name on the
Schedule of Buyers, each Unit consisting of (i) one share (each a “Share” and collectively,
the “Shares”) of common stock, $.0001 par value per share, of the Company and (ii) two
warrants (each a “Warrant” and collectively, the “Warrants”) of the Company, in
substantially the form attached hereto as Exhibit A, each Warrant exercisable for one share of
common stock, $.0001 par value per share, of the Company (each a “Warrant Share” and
collectively, the “Warrant Shares”) at an exercise price per share equal to $5.00; and

     WHEREAS, the Units, Shares, Warrants and Warrant Shares collectively are referred to herein as
the “Securities.”

AGREEMENT

     NOW THEREFORE, in consideration of the premises and mutual promises herein made, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Buyers hereby agree as follows:

     1. Purchase and Sale of Units.

          1.1 Agreement to Sell and Purchase the Units. At the Closing (as defined below),
subject to the terms and conditions of this Agreement, the Company shall issue and sell to each
Buyer, and each Buyer, severally and not jointly, shall purchase from the Company that number of
Units as is set forth opposite such Buyer’s name on the Schedule of Buyers.

          1.2 Purchase Price. The purchase price for each Buyer (the “Purchase Price”)
shall be equal to $6.40 per Unit being purchased by such Buyer at the Closing.

          1.3 Closing. The closing (the “Closing”) of the purchase of the Units shall
take place at the offices of Akerman Senterfitt, 1 SE 3rd Avenue, Miami, Florida, at 10:00 A.M.,
Eastern Standard Time, on June 21, 2007 (the “Closing Date”), or at such other time and
place as

 

 

the Company and the Buyers agree upon orally or in writing. On the Closing Date, each Buyer
shall pay its applicable Purchase Price to the Company for the Units to be issued and sold to such
Buyer by wire transfer of immediately available funds in accordance with the Company’s written wire
instructions, and the Company shall deliver to each Buyer a certificate representing the Units that
such Buyer is purchasing, duly executed on behalf of the Company and registered in the name of such
Buyer or such Buyer’s designee, and bearing an appropriate legend referring to the fact that the
Securities were sold in reliance upon an exemption from registration under the Securities Act of
1933, as amended (the “Securities Act”).

     2. Representations and Warranties of the Company. The Company represents and warrants
to each of the Buyers that:

          2.1 Organization, Good Standing and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State of Delaware, and
the Company is qualified to do business in each jurisdiction in which qualification is required,
except where failure to so qualify would not have a Material Adverse Effect (as defined herein).

          2.2 Due Execution, Delivery and Performance of the Agreements. The Company has the
requisite power and authority to enter into Agreement and perform the transactions contemplated
hereby. The Agreement has been duly authorized, executed and delivered by the Company. This
Agreement is, and upon execution and delivery by the Company, the Warrants will be, a legal, valid
and binding agreement of the Company, enforceable against the Company in accordance with their
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or affecting the
enforcement of creditors’ rights and the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution, including but not
limited to, indemnification provisions set forth in Section 4.7 of this Agreement, may be limited
by federal or state securities law or the public policy underlying such laws. Except as would not,
individually or in the aggregate, cause a Material Adverse Effect, the execution and performance of
the Agreement by the Company and the consummation of the transactions contemplated hereby will not
violate any provision of the certificate of incorporation or bylaws of the Company and will not
result in the creation of any lien, charge, security interest or encumbrance upon any assets of the
Company pursuant to the terms or provisions of, or will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument to which the Company is a party or by which the Company or its properties may
be bound or affected, or, to the knowledge of the Company, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory body, administrative
agency or other governmental agency or body applicable to the Company or any of its properties. No
consent, approval, authorization or other order of any court, regulatory body, administrative
agency or other governmental agency or body is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated by this Agreement, except for
compliance with the Blue Sky laws, the federal securities laws and the rules of the NASDAQ Capital
Market applicable to the offering of the Units. For the purposes of this Agreement the term
“Material Adverse Effect” shall mean a material adverse effect on the condition (financial or
otherwise), properties, business or results of operations of the Company, taken as a whole.

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          2.3 Issuance of the Securities. The Units have been duly authorized and, when issued
and paid for in accordance with the terms of this Agreement, will be duly and validly issued. The
Shares have been duly authorized and, when issued and paid for in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable. The Warrants have been
duly authorized and, when issued and paid for in accordance with the terms of this Agreement, will
be duly and validly issued. The Warrant Shares issuable upon exercise of the Warrants have been
duly authorized and, when issued and paid for in accordance with the terms of this Agreement and
the Warrants, will be duly and validly issued, fully paid and nonassessable. No preemptive rights
or other rights to subscribe for or purchase any shares of common stock of the Company exist with
respect to the issuance and sale of the Securities by the Company pursuant to this Agreement and
the Warrants. No further approval or authority of the stockholders or the Board of Directors of
the Company will be required for the issuance and sale of the Securities as contemplated herein.

          2.4 Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of (i) 100,000,000 shares of common stock, $.0001 par value per share (the
“Common Stock”), of which, as of the date hereof, 40,665,830 shares are issued and
outstanding, and (ii) 25,000,000 shares of preferred stock, $.0001 par value per share (the
“Preferred Stock”), of which, as of the date hereof, 2,050,519 shares of Series A
Convertible Non-Voting Preferred Stock are issued and outstanding. The issued and outstanding
shares of Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, and were
not issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities.

          2.5 Financial Statements. The consolidated financial statements of the Company and the
related notes and schedules thereto included in its filings pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) fairly present in all material respects the
financial position, results of operations, stockholders’ equity and cash flows of the Company and
its consolidated subsidiaries at the dates and for the periods specified therein. Such financial
statements and the related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein) and all adjustments necessary for a fair presentation of
results for such periods have been made; provided, however, that the unaudited
financial statements are subject to normal year-end audit adjustments and do not contain all
footnotes required under generally accepted accounting principles. As of their respective dates,
such financial statements complied as to form in all material respects with the published rules and
regulations of the Commission with respect thereto.

          2.6 Taxes. The Company has filed all required federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has
no knowledge of a tax deficiency that has been or might be asserted or threatened against it that
could cause a Material Adverse Effect. All tax liabilities accrued through the date hereof have
been adequately provided for on the books of the Company.

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          2.7 No Material Change. Since December 31, 2006 and except as described in the
Company’s filings with the Commission pursuant to the Exchange Act, which shall be deemed to
include the Company’s Registration Statement on Form S-4, as amended, declared effective by the
Commission on March 16, 2007 (collectively, the “Exchange Act Filings”), (i) the Company
has not incurred any material liabilities or obligations, indirect, or contingent, or entered into
any material agreement or other transaction that is not in the ordinary course of business or that
could reasonably be expected to result in a material reduction in the future earnings of the
Company; (ii) the Company has not sustained any material loss or interference with its businesses
or properties from fire, flood, windstorm, accident or other calamity not covered by insurance;
(iii) the Company has not paid or declared any dividends or other distributions with respect to its
capital stock and the Company is not in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the capital stock of the
Company other than the sale of the Units hereunder and shares or options issued pursuant to equity
incentive plans or purchase plans approved by the Company’s Board of Directors, or indebtedness
material to the Company (other than in the ordinary course of business and any required scheduled
payments); and (v) there has not occurred any event that has caused or could reasonably be expected
to cause a Material Adverse Effect.

          2.8 No Actions. Except as disclosed in its Exchange Act Filings, there are no legal or
governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened
against the Company before or by any court, regulatory body or administrative agency or any other
governmental agency or body, domestic, or foreign, which, individually or in the aggregate, might
reasonably be expected to cause a Material Adverse Effect. The Company is not a party to or
subject to the provisions of any injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental agency or body that might cause a Material
Adverse Effect.

          2.9 No Defaults. Except as would not, individually or in the aggregate, cause a
Material Adverse Effect, the Company is not in violation or default of any provision of its
certificate of incorporation or bylaws, or other organizational documents, or in breach of or in
default with respect to, any provision of any agreement, judgment, decree, order, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which it is a party or
by which it or any of its properties is bound, and there does not exist any state of fact that,
with notice or lapse of time or both, would constitute an event of default on the part of the
Company (as defined in such documents).

          2.10 Governmental Permits, Etc. The Company has all franchises, licenses,
certificates and other authorizations from such federal, state or local government or governmental
agency, department or body that are currently necessary for the operation of the business of the
Company as currently conducted, except where the failure to posses such franchises, licenses,
certificates and other authorizations would not cause a Material Adverse Effect. The Company has
not received any notice of proceedings relating to the revocation or modification of any such
permit that, if the subject of an unfavorable decision, ruling or finding, could reasonably be
expected to cause a Material Adverse Effect.

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          2.11 Properties. Except as disclosed in its Exchange Act Filings, the Company owns
all the properties and assets described in its Exchange Act Filings as being owned by it,
free and clear of all liens, mortgages, pledges, or encumbrances of any kind, except where
failure to do so would not, individually or in the aggregate, cause a Material Adverse Effect. To
the Company’s knowledge, the Company holds its leased properties under valid and binding leases,
with such exceptions as are not materially significant in relation to its business.

          2.12 Intellectual Property. Except as disclosed in its Exchange Act Filings, (i) the
Company, directly or indirectly, owns or has obtained valid and enforceable licenses for the
inventions, patent applications, patents, trademarks (both registered and unregistered), trade
names, copyrights and trade secrets necessary for the conduct of the Company’s business as
currently conducted (collectively, the “Intellectual Property”); and (ii) (a) to the
knowledge of the Company, there are no third parties who have any ownership rights to any
Intellectual Property that is owned by, or has been licensed to, the Company that would preclude
the Company from conducting its business as currently conducted and cause a Material Adverse
Effect, except for the ownership rights of the owners of the Intellectual Property licensed by the
Company or any Subsidiary; (b) to the Company’s knowledge, there are currently no sales of any
products that would constitute an infringement by third parties of any Intellectual Property owned
or licensed by the Company, which infringement would cause a Material Adverse Effect; (c) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the rights of the Company in or to any Intellectual Property owned or licensed by the
Company, other than claims which could not reasonably be expected to have a Material Adverse
Effect; (d) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any Intellectual Property owned, or
licensed by the Company, other than non-material actions, suits, proceedings and claims; and (e)
there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary right of others, other than non-material actions, suits, proceedings
and claims.

          2.13 Employee Relations. The Company is not a party to any collective bargaining
agreement or employs any member of a union. The Company believes that its relations with its
employees are good.

          2.14 ERISA. Except as would not, individually or in the aggregate, cause a Material
Adverse Effect, the Company is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (herein called “ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan;” or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations thereunder (the
“Code”); and each “pension plan” for which the Company would have liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which would cause the loss of
such qualification.

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          2.15 Insurance. The Company maintains insurance of the types and in the amounts that
the Company reasonably believes is adequate for its business.

          2.16 Related Party Transactions. No transaction has occurred between or among the
Company, on the one hand, and its affiliates, officers or directors on the other hand, that is
required to have been described under applicable securities laws in its Exchange Act Filings and is
not so described in such filings, except for compensation paid in the ordinary course of business.

          2.17 No Fees. No person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or a
Buyer for any commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company.

          2.18 Private Placement. Assuming the accuracy of each Buyer’s representations and
warranties set forth in Section 3 of this Agreement, no registration under the Securities Act is
required for the offer and sale of the Securities by the Company to the Buyers under this
Agreement.

          2.19 No Directed Selling Efforts or General Solicitation. Neither the Company nor any
person acting on its behalf has conducted any “general solicitation” or “general advertising” (as
those terms are used in the Securities Act) in connection with the offer or sale of any of the
Securities.

          2.20 No Integrated Offering. Assuming the accuracy of each Buyer’s representations
and warranties set forth in Section 3, neither the Company nor any person acting on its behalf has,
directly or indirectly, at any time within the past six months, made any offers or sales of any
security of the Company or solicited any offers to buy any security under circumstances that would
(i) eliminate the availability of the exemption from registration under the Securities Act in
connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii)
cause the offering of the Securities pursuant to this Agreement to be integrated with prior
offerings by the Company for purposes of any applicable law, regulation or stockholder approval
provisions.

          2.21 Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to terminate (or which would reasonably be expected to have the effect of terminating) the
registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration.

          2.22 Investment Company. The Company is not an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.

          2.23 Foreign Corrupt Practices. Neither the Company, nor, to the knowledge of the
Company, any director, officer, agent, employee or other Person acting on behalf of the Company
has, in the course of its actions for, or on behalf of, the Company (i) used any

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corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.

          2.24 Non-Public Information. The Company has not disclosed to the Buyers information
that would constitute material non-public information as of the Closing Date other than the
existence and terms of the transactions contemplated by this Agreement.

          2.25 Additional Information. The information contained or incorporated in the
following documents, taken as a whole as of the date hereof do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made not misleading:

               (a) the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006;

               (b) the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007;

               (c) the Company’s Current Reports on Form 8-K filed with the Commission on January 12, 2007,
January 23, 2007, February 23, 2007, March 2, 2007, March 19, 2007, March 21, 2007, March 30, 2007,
April 5, 2007, May 8, 2007, May 14, 2007 and May 15, 2007; and

               (d) all other documents, if any, filed by the Company with the Commission since December 31,
2006 pursuant to the reporting requirements of the Exchange Act.

          2.26 Acknowledgment Regarding Buyers’ Purchase of Securities. The Company
acknowledges and agrees that each Buyer is acting solely in the capacity of an arm’s length
purchaser with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to this Agreement and the transactions contemplated hereby
and any advice given by any Buyer or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is merely incidental to the
such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the
Company’s decision to enter into this Agreement has been based solely on the independent evaluation
of the transactions contemplated hereby by the Company and its representatives.

     3. Representations and Warranties of the Buyers. Each Buyer represents and warrants
to the Company that:

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          3.1 Organization; Validity; Enforcements. (i) The Buyer has power, authority and
capacity to enter into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and performance of this
Agreement, (ii) the making and performance of this Agreement by the Buyer and the consummation of
the transactions herein contemplated will not violate any provision of the organizational
documents, if applicable, of the Buyer or conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a default under any
material agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Buyer is a party, or any statute, authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency or other governmental
agency or body applicable to the Buyer, (iii) no consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental agency or body is required
on the part of the Buyer for the execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement, (iv) upon the execution and delivery of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation of the Buyer,
enforceable in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application
relating to or the enforcement of creditor’s rights and the application of equitable principles
relating to the availability of remedies, and except as rights to indemnity or contribution,
including, but not limited to, the indemnification provisions set forth in Section 4.7 of this
Agreement, may be limited by federal or state securities law or the public policy underlying such
laws and (v) there is not in effect any order enjoining or restraining the Buyer from entering into
or engaging in any of the transactions contemplated by this Agreement.

          3.2 Investment Intent. The Buyer understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any applicable state
securities law and is acquiring the Securities and, upon exercise of the Warrants, will acquire the
Warrant Shares issuable upon exercise thereof, as principal for its own account and not with a view
to, or for distributing or reselling such Securities or any part thereof in violation of the
Securities Act or any applicable state securities laws; provided, however, that by
making the representations herein, such Buyer reserves the right, subject to the provisions of this
Agreement, to sell or otherwise dispose of all or any part of such Securities pursuant to an
effective registration statement under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities laws. The Buyer is
acquiring the Securities hereunder in the ordinary course of its business. The Buyer does not
presently have any agreement, plan or understanding, directly or indirectly, with any person to
distribute or effect any distribution of any of the Securities (or any securities which are
derivatives thereof) to or through any person or entity; such Buyer is not a registered
broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would
require it to be so registered as a broker-dealer.

          3.3 Buyer Status. At the time the Buyer was offered the Securities, the Buyer was,
and at the date hereof the Buyer is, and on each date on which the Buyer exercises the Warrants the
Buyer will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

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          3.4 General Solicitation. The Buyer is not purchasing the Securities as a result of
any advertisement, article, notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or any other general advertisement.

          3.5 Investment Experience. The Buyer, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment. The Buyer is able to bear
the economic risk of an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.

          3.6 Access to Information. The Buyer acknowledges that it has had the opportunity to
review the Company’s Exchange Act Filings and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and its
financial condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect to the investment.
The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make
an informed decision with respect to the purchase of the Securities.

          3.7 Brokers and Finders. No person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
any Buyer for any commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Buyer.

          3.8 Independent Investment Decision. The Buyer has independently evaluated the merits
of its decision to purchase Securities pursuant to this Agreement, and such Buyer confirms that it
has not relied on the advice of any other Buyer’s business and/or legal counsel in making such
decision. The Buyer understands that nothing in this Agreement or any other materials presented by
or on behalf of the Company to the Buyer in connection with the purchase of the Securities
constitutes legal, tax or investment advice. The Buyer has, in connection with its decision to
purchase the Units, relied solely upon the Company’s Exchange Act Filings as filed with the
Commission and the documents included therein or incorporated by reference and the representations
and warranties of the Company contained herein.

          3.9 Reliance on Exemptions. The Buyer understands that the Securities are being
offered and sold to the Buyer in reliance on specific exemptions from the registration requirements
of federal and state securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire the Securities.

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          3.10 No Governmental Review. The Buyer understands that no federal or state agency or
any other government or governmental agency has passed on or made any recommendation or endorsement
of the Securities or the fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the Securities.

     4. Other Agreements of the Parties.

          4.1 Compliance with Laws. Notwithstanding any other provision of this Agreement, each
Buyer covenants that the Securities may be disposed of only pursuant to an effective registration
statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an
available exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable federal and state securities laws. In
connection with any transfer of the Securities other than pursuant to an effective registration
statement, the Company may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer
does not require registration of such Securities under the Securities Act. As a condition of
transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement.

          4.2 Legends. Each Buyer understands that, until such time as a registration statement
covering the transfer of Securities has been declared effective or the Securities may be sold
pursuant to Rule 144 under the Securities Act without any restriction as to the number of
Securities as of a particular date that can then be immediately sold, the Securities will bear a
restrictive legend in substantially the following form:

     “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE
SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

          4.3 Acknowledgment. Each Buyer acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell any Securities or any interest therein without
complying with the requirements of the Securities Act.

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          4.4 Form D and Blue Sky. The Company agrees to timely file a Form D with respect to
the Securities as required under the Securities Act. The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Buyers at the Closing pursuant to this
Agreement under applicable Blue Sky laws (or to obtain an exemption from such qualification).

          4.5 Reservation of Common Stock. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance from and after the Closing Date, no
less than 100% of the maximum number of shares of Common Stock issuable upon exercise of the
Warrants issued at the Closing.

          4.6 Registration Rights.

               (a) Piggyback Registration Rights. If, at any time during the 2 year period
commencing on the Closing Date, the Company proposes to file a registration statement under the
Securities Act with respect to an offering of equity securities or securities exercisable or
exchangeable for, or convertible into, equity securities, by the Company for its own account or for
the account of stockholders of the Company, other than a registration statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an exchange offer or
offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt
that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan,
then the Company shall (x) give written notice of such proposed filing to the Buyers as soon as
practicable but in no event less than ten (10) days before the anticipated filing date, which
notice shall describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing underwriter or
underwriters, if any, of the offering, and (y) subject to Section 4.6(b) below, offer to the
holders of Shares, the Warrants and Warrant Shares (also referred to herein as “Registrable
Securities”) in such notice the opportunity to register the sale of such number of shares of
Registrable Securities as such holders may request in writing within five (5) days following
receipt of such notice (a “Piggyback Registration Statement”). Subject to Section 4.6(b)
below, the Company shall cause such Registrable Securities to be included in such registration and
shall use commercially reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Securities requested to be included in a
Piggyback Registration Statement, on the same terms and conditions as any similar securities of the
Company, and to permit the sale or other disposition of such Registrable Securities in accordance
with the intended method(s) of distribution thereof. All holders of Registrable Securities
proposing to distribute their securities through a Piggyback Registration Statement that involves
an underwriter or underwriters shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such Piggyback Registration Statement.

               (b) Underwriter’s Cutback. Notwithstanding any other provision of this Agreement, if
the managing underwriter of a proposed underwritten offering determines that the inclusion of all
shares requested to be included in a Piggyback Registration Statement would adversely affect such
offering, the Company may, in its discretion, limit the number of Registrable Securities to be
included in such offering.

11

 

          4.7 Indemnification.

               (a) Indemnification of Buyers. The Company agrees to indemnify and hold harmless each
Buyer, against any losses, claims, damages, liabilities or expenses, joint or several, to which the
Buyer may become subject, under the Securities Act, the Exchange Act, or any other federal or state
law or regulation, or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the prior written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon (i) any failure to comply with the covenants and agreements
contained in this Agreement, (ii) the inaccuracy of any representation or warranty made by the
Company herein or (iii) any untrue statement or alleged untrue statement of any material fact
contained in a Piggyback Registration Statement, including the prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended and at the time of
effectiveness of the Piggyback Registration Statement, including any information deemed to be a
part thereof as of the time of effectiveness under the Securities Act, or in the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Securities Act, or filed as
part of the Piggyback Registration Statement at the time of effectiveness if no Rule 424(b) filing
is required (the “Prospectus”), or any subsequent amendment or supplement thereto, or any
omission or alleged omission to state a material fact required to be stated or necessary to make
the statements in the Piggyback Registration Statement, or any amendment or supplement thereto, not
misleading or, in the Prospectus, or any amendment or supplement thereto, not misleading in light
of the circumstances under which they were made; and the Company will reimburse each Buyer for any
legal and other expenses as such expenses are reasonably incurred by such Buyer in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability
or expense; provided, however, that the Company will not be liable for amounts paid
in settlement of any such loss, claim, damage, liability or expense if such settlement is effected
without the consent of the Company, and the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or is based upon (i)
the failure of a Buyer to comply with the covenants and agreements contained in this Agreement,
(ii) the inaccuracy of any representation or warranty made by a Buyer herein, (iii) an untrue
statement or alleged untrue statement or omission or alleged omission made in the Piggyback
Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with information furnished to the Company by or on behalf of the Buyer expressly for
use therein, or (iv) any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Buyer prior to the pertinent sale or sales by the
Buyer.

               (b) Indemnification of the Company. Each Buyer will, severally and not jointly,
indemnify and hold harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, damages, liabilities or expenses to
which the Company, each of its directors, each of its officers who signed the Piggyback
Registration Statement or controlling person may become subject, under the Securities Act, the
Exchange Act, or any other federal or state law or regulation, or at common law or otherwise
(including in settlement of any litigation, but only if such settlement is effected with the prior
written consent of such Buyer) insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon

12

 

(i) any failure to comply with the covenants and agreements contained in this Agreement, (ii)
the inaccuracy of any representation or warranty made by such Buyer herein or (iii) any untrue or
alleged untrue statement of any material fact contained in a Piggyback Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any omission or alleged omission to state a
material fact required to be stated or necessary to make the statements in the Piggyback
Registration Statement, or any amendment or supplement thereto not misleading, or in the
Prospectus, or any amendment or supplement thereto, not misleading in the light of the
circumstances under which they were made, in the case of clause (iii), to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Piggyback Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished to the Company by or
on behalf of any Buyer expressly for use therein; and each Buyer will reimburse the Company, each
of its directors, each of its officers who signed the Piggyback Registration Statement or
controlling person for any legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Piggyback Registration Statement or controlling
person in connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability or expense.

               (c) Notice of Claims, etc. Promptly after receipt by an indemnified party under this
Section 4.7 of notice of the threat or commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under this Section 4.7,
promptly notify the indemnifying party in writing thereof, but the omission to notify the
indemnifying party will not relieve it from any liability that it may have to any indemnified party
for contribution or otherwise under the indemnity agreement contained in this Section 4.7 to the
extent it is not prejudiced as a result of such failure. In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party and the
indemnifying party, and the indemnified party shall have reasonably concluded, based on an opinion
of counsel reasonably satisfactory to the indemnifying party, that there is likely to be a conflict
of interest between the positions of the indemnifying party and the indemnified party in conducting
the defense of any such action or that there are likely to be legal defenses available to it and/or
other indemnified parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified party
under this Section 4.7 for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance with the proviso to
the preceding sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, reasonably satisfactory to such
indemnifying party, representing all of the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel

13

 

reasonably satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of action, in each of which cases, the reasonable fees
and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party
shall not be liable for any settlement of any action without its written consent.

               (d) Contribution. If the indemnification provided for in this Section 4.7 is required
by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party under paragraphs (a), (b) or (c) of this Section 4.7 in respect of
any losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the Buyer
from the placement of the Units contemplated by this Agreement or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Buyer in connection with the statements, omissions, failures to comply or
inaccuracies in the representations and warranties that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative fault
of the Company on the one hand and each Buyer on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact, the omission
or alleged omission to state a material fact, the failure to comply or alleged failure to comply or
the inaccurate or the alleged inaccurate representation or warranty relates to information supplied
by the Company or by such Buyer and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in paragraph (c) of this Section 4.7,
any legal or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The Company and each Buyer agree that it would not
be just and equitable if contribution pursuant to this Section 4.7 were determined solely by pro
rata allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in this paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Buyers’ obligations to
contribute pursuant to this Section 4.7 are several and not joint.

          4.8 Listing of Securities. The Company shall comply with the requirements of the
NASDAQ Capital Market with respect to the issuance of the Securities and shall use its commercially
reasonable efforts to have the Shares, Warrants and the Warrant Shares listed on the NASDAQ Capital
Market or on any other exchange on which the Company’s common stock has been listed by the Company
for quotation on or before the Closing Date.

          4.9 Confidentiality. For the benefit of the Company, each Buyer hereby agrees to keep
confidential all information concerning the private placement of the Securities to the Buyer. Each
Buyer understands that the existence and nature of all conversations and presentations, if any,
regarding the Company and this offering must be kept strictly confidential. Each Buyer understands
that the federal securities laws impose restrictions on trading based on
information regarding the offering of the Securities to the Buyer. In addition, the Buyer
hereby acknowledges that unauthorized disclosure of information regarding the offering of the
Securities to the Buyer may result in a violation of Regulation FD.

14

 

     5. Conditions Precedent to Closing.

          5.1 Conditions Precedent to the Obligations of the Buyers to Purchase Units. The
obligation of each Buyer to purchase Units at the Closing is subject to the fulfillment to such
Buyer’s satisfaction, on or prior to the Closing Date, of each of the following conditions, any of
which may be waived by such Buyer (as to itself only):

               (a) Representations and Warranties. The representations and warranties of the Company
contained in Section 2 shall be true and correct in all material respects (except for those
representations and warranties which are qualified as to materiality, in which case such
representations and warranties shall be true and correct in all respects) as of the date when made
and as of the Closing Date, as though made on and as of such date, except for such representations
and warranties that speak as of a specific date.

               (b) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by it at or prior to the Closing.

               (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by this Agreement.

               (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Units at the Closing, all of which shall be and remain so long as
necessary, in full force and effect.

               (e) Adverse Changes. Since the date of execution of this Agreement, no event or
series of events shall have occurred that has had or would reasonably be expected to cause a
Material Adverse Effect.

               (f) Deliverables. The Company shall have executed and delivered to such Buyer (i)
this Agreement and (ii) certificates representing the Units to be purchased by such Buyer pursuant
to this Agreement.

               (g) Legal Opinion. The Company shall have delivered to such Buyer a legal opinion of
Akerman Senterfitt, in form, scope and substance reasonably satisfactory to the parties hereto.

               (h) Secretary’s Certificate. The Company shall have delivered to such Buyer a
certificate of the Secretary of the Company (the “Secretary’s Certificate”), dated as of
the Closing Date, (i) certifying the resolutions adopted by the Board of Directors of the Company
approving the transactions contemplated by this Agreement and the issuance of the Securities
and (ii) certifying the current versions of the certificate or articles of incorporation, as
amended, and bylaws of the Company;

15

 

               (i) Compliance Certificate. In the event the Closing Date is different than the date
of this Agreement, the Company shall have delivered to such Buyer a certificate, dated as of the
Closing Date and signed by its Chief Executive Officer or its Chief Financial Officer, certifying
to the fulfillment of the conditions specified in this Section 5.1 as of the Closing Date.

          5.2 Conditions Precedent to the Obligations of the Company to Sell Units. The
Company’s obligation to sell and issue the Units at the Closing is subject to the fulfillment to
the satisfaction of the Company, on or prior to the Closing Date, of the following conditions, any
of which may be waived by the Company:

               (a) Representations and Warranties. The representations and warranties made by the
Buyers in Section 3 hereof shall be true and correct in all material respects (except for those
representations and warranties which are qualified as to materiality, in which case such
representations and warranties shall be true and correct in all respects) as of the date when made,
and as of the Closing Date as though made on and as of such date, except for representations and
warranties that speak as of a specific date.

               (b) Performance. The Buyers shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyers at or prior to the Closing Date.

               (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by this Agreement.

               (d) Deliverables. The Buyers shall have executed and delivered to the Company this
Agreement and shall have delivered to the Company the Purchase Price for the Units being purchased
by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Company.

     6. Miscellaneous.

          6.1 Entire Agreement. This Agreement, together with any documents, instruments and
certificates explicitly referred to herein, constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes any and all prior discussions,
negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with
respect thereto.

          6.2 Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed by first-class registered or certified airmail, e-mail, confirmed
facsimile or nationally recognized overnight express courier service, and shall be deemed given
when so mailed and shall be delivered as addressed as follows:

16

 

If to the Company, to it at:

Equity Media Holdings Corporation

One Shackleford Drive, Suite 400

Little Rock, Arkansas 72211

Attention: General Counsel

Telephone number: (501) 219-2400

Facsimile number: (501) 221-1101

with a copy to:

Akerman Senterfitt

One Southeast Third Avenue

Miami, FL 33131

Attention: Stephen K. Roddenberry, Esq.

Telephone number: (305) 982-5618

Facsimile number: (305) 374-5095

     If to a Buyer, at such Buyer’s address as set forth at the end of this Agreement, or
at such other address or addresses as may have been furnished to the Company in
writing.

          6.3 Amendments and Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the Company and Buyers
holding or having the right to acquire a majority of the Shares and the Warrant Shares on a
fully-diluted basis at the time of such amendment or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right. No consideration shall be offered or paid to
any Buyer to amend or consent to a waiver or modification of any provision of this Agreement unless
the same consideration is also offered to all Buyers who then hold Securities.

          6.4 Construction. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The
language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.

          6.5 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted assigns. This
Agreement, or any rights or obligations hereunder, may not be assigned by the Company without the
prior written consent of the Buyers. Any Buyer may assign its rights hereunder in whole or in

17

 

part to any person to whom such Buyer assigns or transfers any Securities in compliance with
this Agreement and applicable law, provided such transferee shall agree in writing to be bound,
with respect to the transferred Securities, by the terms and conditions of this Agreement that
apply to the “Buyers,” and the Company consents to such assignment.

          6.6 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other person, except the directors and officers of
the Company and each person who controls the Company is an intended third party beneficiary of
Section 4.7, and such persons may enforce the provisions of such Section directly against the
parties with obligations thereunder.

          6.7 Governing Law. This Agreement is to be construed in accordance with and governed
by the federal law of the United States of America and the internal laws of the State of Florida
without giving effect to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Florida to the rights and duties of the
parties. The Company and each Buyer submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of Florida and of any Florida State court sitting in Palm
Beach County for purposes of all legal proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby. Each of the Company and each Buyer irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have to the laying of
the venue of any such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

          6.8 Survival. The representations, warranties and covenants of the Company and the
Buyers contained in or made pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the Closing.

          6.9 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

          6.10 Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or impaired thereby.

[Signature Page Follows]

18

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	COMPANY:

EQUITY MEDIA HOLDINGS CORPORATION

 	 
	 	By:  	/s/ Glenn Charlesworth 	 
	 	 	Name:  	Glenn Charlesworth 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

19

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

W. THORPE MCKENZIE

 	 
	 	/s/ W. THORPE MCKENZIE
 	 
	 	 	 
	 	 	 
	 

20

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

ROBERT DISBROW

 	 
	 	/s/ ROBERT DISBROW
 	 
	 	 	 
	 	 	 
	 

21

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

MARNA DISBROW

 	 
	 	/s/ Robert Disbrow
 	 
	 	Robert Disbrow as Agent 	 
	 	 	 
	 

22

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

BANQUE PRIVEE EDMOND DE ROTHSCHILD, A/C CHROMETECH

 	 
	 	By:  	/s/ Robert Disbrow 	 
	 	 	Name:  	Robert Disbrow 	 
	 	 	Title:  	As Agent 	 
	 

23

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

FEI-BRENT INVESTMENTS LTD.

 	 
	 	By:  	/s/ Robert Disbrow 	 
	 	 	Name:  	Robert Disbrow 	 
	 	 	Title:  	President 	 
	 

24

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

ALLISON LAM

 	 
	 	/s/ ALLISON LAM
 	 
	 	 	 
	 	 	 
	 

25

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	BUYER:

HENRY G. LUKEN

 	 
	 	/s/ HENRY G. LUKEN
 	 
	 	 	 
	 	 	 
	 

26

 

SCHEDULE OF BUYERS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Address and	 	Aggregate	 	 	Aggregate	 	 	Aggregate	 	 	Purchase	 
	Buyer	 	Facsimile Number	 	Number of Units	 	 	Number of Shares	 	 	Number of Warrants	 	 	Price	 
	W. Thorpe McKenzie
	 	Mr. W. Thorpe McKenzie	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	735 Broad Street, Suite 1108	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Chattanooga, TN 37402	 	 	780,000	 	 	 	780,000	 	 	 	1,560,000	 	 	$	4,992,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert Disbrow
	 	Robert Disbrow	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	2000-400 Burrard St.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Vancouver BC V6C 3A6	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Canada	 	 	157,000	 	 	 	157,000	 	 	 	314,000	 	 	$	1,004,800	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Banque Privee Edmond de
	 	Banque Privee Edmond de	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rothschild, A/C
	 	Rothschild, A/C Chrometech	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Chrometech
	 	2000-400 Burrard St.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Vancouver BC V6C 3A6	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Canada	 	 	117,000	 	 	 	117,000	 	 	 	234,000	 	 	$	748,800	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Marna Disbrow
	 	Marna Disbrow	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	2000-400 Burrard St.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Vancouver BC V6C 3A6	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Canada	 	 	62,000	 	 	 	62,000	 	 	 	124,000	 	 	$	396,800	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fei-Brent Investments Ltd
	 	Fei-Brent Investments Ltd	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	2000-400 Burrard St.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Vancouver BC V6C 3A6	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Canada	 	 	39,000	 	 	 	39,000	 	 	 	78,000	 	 	$	249,600	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alison Lam
	 	Alison Lam	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	2000-400 Burrard St.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Vancouver BC V6C 3A6	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Canada	 	 	15,000	 	 	 	15,000	 	 	 	30,000	 	 	$	96,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Henry G. Luken
	 	Covista Communications	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	4803 Highway 58	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Chattanooga, TN 37416	 	 	236,250	 	 	 	236,250	 	 	 	472,500	 	 	$	1,512,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL:
	 	 	 	 	1,406,250	 	 	 	1,406,250	 	 	 	2,812,500	 	 	$	9,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

27Ex-10.18

 

EXHIBIT 10.18

EXECUTION COPY

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (“Employment Agreement”), dated as of June 1, 2007, between Perkins &
Marie Callendar’s Inc. (the “Company”), and Joseph F. Trungale (the “Executive”).

     WHEREAS, the Executive is currently a party to a letter agreement between the Restaurant
Company and the Executive, dated as of February 4, 2004 (the “Employment Letter Agreement”);

     WHEREAS, the Company wishes to assure itself of the management services of the Executive for
the period provided in this Employment Agreement, and the Executive desires to serve in the employ
of the Company for such period, upon the terms and conditions hereinafter, provided that
this Employment Agreement shall supersede the Employment Letter Agreement.

     IT IS THEREFORE AGREED AS FOLLOWS:

     1. Employment, Duties and Acceptance.

          1.1 Employment by the Company. Effective June 1, 2007 (the “Effective Date”), the
Company hereby employs the Executive, for itself and its affiliates, for the Term (as herein
defined), to render exclusive and full-time services in the capacity of Chief Executive Officer and
President of the Company, subject to the direction of the Board of Directors of TRC Holdings LLC,
the indirect parent of the Company (the “Board of Directors”), in accordance with applicable law
and the Company’s corporate governance policies. The Executive may engage in personal, charitable,
professional and investment activities except to the extent that the Board of Directors reasonably
determines that any such activity conflicts or significantly interferes with the performance of his
responsibilities to the Company under this Employment Agreement.

          1.2 Duties/Authority. The Executive shall have responsibilities commensurate with the
offices of Chief Executive Officer and President, subject to the control and direction of the Board
of Directors in accordance with applicable law and the Company’s corporate governance policies.
The Executive agrees to hold such additional offices of the Company and its affiliates as may
reasonably be assigned to him by the Board of Directors from time to time.

          1.3 Acceptance of Employment by the Executive. The Executive accepts such employment
and shall render the services described above. Subject to election (ii) by the Company’s
stockholders or appointment by the Board of Directors, the Executive may also serve during all or
any part of the Term as a director of the Company, and (ii) by the Company, the Executive may also
serve during all or any part of the Term as an officer or director of any other entity controlled
by or under common control with the Company, in each case without any compensation therefor other
than that specified in this Employment Agreement.

 

 

          1.4 Place of Employment. The Executive’s principal place of employment shall be
Memphis, TN (the “Headquarters”), subject to such reasonable travel as the rendering of the
services hereunder may require, at the direction of the Board of Directors. The Company
acknowledges that the Executive’s performance of his duties requires travel to various locations
and to that extent there is no mandatory minimum number of days he is expected to be present at the
Headquarters. Unless agreed to otherwise in writing by the Executive, the Company shall not change
the Executive’s principal place of employment further than fifty (50) miles from the Headquarters.

     2. Term of Employment. Subject to earlier termination pursuant to Section 4 of this
Employment Agreement, the initial term of Executive’s employment under this Employment Agreement
shall commence on the Effective Date and shall end on the third anniversary of the Effective Date
(the “Initial Term”); provided that the term shall automatically renew for successive
periods of one year (each such one year period, a “Subsequent Term”) until one of the parties gives
written notice of non-renewal to the other party at least 90 days before the end of the Initial
Term or any Subsequent Term, as applicable, unless sooner terminated as herein provided. For the
purposes of this Employment Agreement, (i) “Term” shall mean the Initial Term, or the Subsequent
Term, as appropriate, and (ii) if a party gives the other party a notice of non-renewal pursuant
hereto, this Employment Agreement shall be deemed to expire at the end of the current Term and no
termination shall be deemed to have occurred for the purpose of Section 4.

     3. Compensation.

          3.1 Salary. As compensation for all services to be rendered pursuant to this
Employment Agreement, the Company (directly or through one or more subsidiaries) shall pay the
Executive during the Term a salary of $625,000 per annum (the “Base Salary”), payable not less
frequently than monthly, less such deductions as shall be required to be withheld by applicable law
and regulations. The Executive’s Base Salary shall be reviewed at least annually by the Board of
Directors and may be increased from time to time, but in no event shall the amount of the
Executive’s Base Salary be decreased from its then existing level.

          3.2 Incentive Bonus. The Executive shall be eligible to receive an annual bonus (the
“Incentive Bonus”) under a plan established by the Company from time to time in the amount
determined by the Board of Directors based upon achievement of performance measures derived from
the annual business plan approved by the Board of Directors and payable on the date such bonuses
are paid to other executives of the Company. The Executive’s target bonus shall be 70% of Base
Salary (the “Target Bonus”). Except as otherwise provided in Section 4, the Incentive Bonus shall
be pro-rated to reflect the percentage of the fiscal year the Executive has performed services for
the Company pursuant to this Employment Agreement.

          3.3 Participation in Employee Benefit Plans. The Executive shall be permitted during
the Term, if and to the extent eligible, to participate in any group life, hospitalization,
accidental death and dismemberment or disability insurance plan, health (Executive Health and Life
Benefit Plan) program, pension plan or similar benefit plan or perquisite program of the Company,
which may be available generally to other senior executives

2

 

and managers of the Company and its subsidiaries on the same terms as such other persons in
accordance with the terms of such plans and programs. The Board of Directors may determine to
offer the Executive participation in other compensation or benefit plans, in its discretion.

          3.4 Expenses. Subject to such written policies, applicable to senior executives
generally, as may from time to time be established by the Board of Directors, the Company shall pay
or reimburse the Executive for all reasonable expenses (including travel expenses) actually
incurred or paid by the Executive during the Term in the performance of the Executive’s services
under this Employment Agreement upon presentation of expense statements or vouchers or such other
supporting information as it may require.

          3.5 Vacation. The Executive shall be entitled to such amount of vacation which is
available generally to other senior executives and managers of the Company and its subsidiaries;
provided, that in no event shall the Executive receive a total number of annual vacation
days less than the number of annual vacation days to which the Executive was entitled immediately
prior to May 3, 2006. The Executive shall be permitted to carry-over a maximum number of accrued
but unused vacation days equal to the greater of (x) three (3) times the number of annual vacation
days for which the Executive is eligible and (y) the maximum number of days permitted pursuant to
the vacation policies of the Company.

          3.6 Insurance. During the Term, the Company shall maintain director’s and officer’s
liability indemnification and insurance coverage for the Executive.

          3.7 Automobile Allowance. The Executive shall be permitted to use a vehicle provided
by the Company and/or receive an automobile allowance from the Company in accordance with the
policies of the Company, provided, however, such Company vehicle or automobile allowance
shall be no less favorable to the Executive than any such benefit received by the Executive prior
to the Effective Date.

     4. Termination.

          4.1 Termination upon Death. If the Executive dies during the Term, this Employment
Agreement shall terminate and the Company shall pay to the Executive (i) all Base Salary and
benefits from the Company and its employee benefit plans earned and accrued as of the date of
termination and (ii) a pro rata amount of his annual Incentive Bonus in accordance with the terms
of the Plan, determined at the end of the fiscal year in which the Executive’s death occurred, and
pro rated through the date of termination.

          4.2 Termination upon Disability. If during the Term the Executive becomes physically
or mentally disabled, whether totally or partially, so that Executive is unable to perform the
essential functions of his employment, with or without reasonable accommodations (as determined, in
good faith, by the Board of Directors) for (i) a period of three (3) consecutive months, or (ii)
for shorter periods aggregating three (3) months during any six (6) month period, the Company may
at any time after the last day of the three (3) consecutive months of disability or the day on
which the shorter periods of disability equal an aggregate of three (3) months, by written notice
to the Executive, terminate the Term of the Executive’s employment hereunder. Nothing in this
Section 4.2 shall be deemed to extend the Term. In the

3

 

event of termination of this Employment Agreement by reason of disability, the Company shall
pay to the Executive (i) the Executive’s Base Salary on the date of termination for the lesser of
four (4) months or the remainder of the Term, payable in accordance with the provisions of Section
3.1 hereof, (ii) all Base Salary and benefits from the Company and its employee benefit plans
earned and accrued as of the date of termination and (iii) a pro rata amount of his annual
Incentive Bonus in accordance with the terms of the Plan, determined at the end of the fiscal year
in which the disability occurred, and pro rated through the date of termination.

          4.3 Termination for Cause or Without Good Reason. The Company may at any time by
written notice to the Executive terminate the Term of the Executive’s employment hereunder for
Cause and the Executive may at any time by written notice to the Company terminate the Term of the
Executive’s employment hereunder without Good Reason and, in either such case, the Executive shall
have no right to receive any compensation or benefit hereunder on and after the effective date of
such notice other than Base Salary and benefits accrued but not paid as of the date of termination.

          4.4 Termination with Good Reason or without Cause. During the Term, the Executive may
terminate his employment with the Company at any time with Good Reason, and the Company may
terminate the Executive’s employment without Cause, upon 10 (ten) days’ written notice to the other
party hereto. Subject to Section 4.6, the Executive shall have the right to continue to receive
his Base Salary (the “Termination Payments”) and to continue to be a participant in the Company’s
Executive Health and Life Benefit Plan (the “Termination Benefits”), as in effect on the date of
such notice, payable in accordance with the provisions of Sections 3.1 and 3.3 hereof, for the
greater of (x) the remainder of the Term and (y) twenty-four (24) months; provided, that in
the event that the Executive’s participation in any benefit plans, programs, practices or policies
referred to in Section 3.3 is barred by the terms of such plans, programs, practices or policies
due to the termination of the Executive’s employment with the Company, then the Company shall
provide him with benefits substantially similar to those which he would be entitled to as a
participant in such benefit plans, programs, practices or policies; provided
further, that (subject to Section 4.6) the Executive shall receive such Base Salary and
group health benefits for a minimum of twenty-four (24) months from the effective date of such
notice. In the event the Executive’s employment terminates pursuant to this Section 4.4, he shall
be entitled to receive a pro rata amount of his annual Incentive Bonus in accordance with the terms
of the Plan, determined at the end of the fiscal year in which the Executive’s employment
terminated, and pro rated through the date of termination; provided further, that
if the Executive’s employment is terminated pursuant to this Section 4.4 after a Change in Control
has occurred, in the event that any payment or distribution by the Company to or for the benefit of
the Executive (whether pursuant to the terms of this Employment Agreement or otherwise) (a
“Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), or any interest or penalties are incurred by the Executive due to
the miscalculation by an independent auditor with respect to such excise tax or untimely payment of
the Gross-Up Payment (as defined below) by the Company with respect to such excise tax (such excise
tax, together with any interest or penalties thereon incurred by the Executive due to
miscalculation by the independent auditor or untimely payment of the Gross-Up Payment (as defined
below) by the Company, are hereinafter referred to as the “Excise Tax”), then the Company will pay
to the Executive an additional payment (the “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes, including, without limitation,

4

 

any income taxes and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. The
determination of amounts required to be paid pursuant to the preceding proviso shall be made by an
independent auditor selected and paid by the Company. Such independent auditor shall be a
nationally recognized United States public accounting firm, which may be the independent accounting
firm used by the Company to audit its financial statements unless such accounting firm is serving
as the accountant or auditor for the individual, entity or group effecting the Change in Control.

          4.5 Definitions. For purposes hereof:

     (a) The term “Cause” shall mean: as determined in good faith by the Board of Directors (or
its designee), (i) the Executive’s material breach of any of the Executive’s obligations under this
Employment Agreement; (ii) the Executive’s continued and deliberate neglect of, willful misconduct
in connection with the performance of, or refusal to perform the Executive’s duties, which, in the
case of neglect or failure to perform, has not been cured within thirty (30) days after the
Executive has been provided notice of the same; (iii) the Executive’s engagement in any conduct
which injures the integrity, character, business or reputation of the Company or any of its
subsidiaries or affiliates or which impugns the Executive’s own integrity, character or reputation
so as to cause the Executive to be unfit to act on behalf of the Company; or (iv) the Board of
Director’s good faith determination that the Executive has committed an act or acts constituting a
felony, or other act involving dishonesty, disloyalty or fraud against the Company or any of its
subsidiaries or affiliates.

     (b) The term “Good Reason” shall mean: (i) the assignment to the Executive of duties and
responsibilities not commensurate with his status as the Chief Executive Officer and President of
the Company, (ii) the failure of the Company to provide Base Salary, bonus opportunity and benefits
to the Executive as required herein or (iii) the failure of the Company to adhere in any
substantial manner to any of its other covenants herein, provided that any of the foregoing
continues for a period of 20 days after written notice thereof, specifying the nature thereof and
requesting that it be cured, is given by the Executive to the Company; provided, that if a
Change in Control has occurred the term “Good Reason” shall also mean (iv) any other action by the
Company which results in a diminishment in the Executive’s position, authority, duties or
responsibilities to any substantial degree, (v) any material adverse change in the Executive’s
benefits or perquisites, or (vi) the Company’s requiring the Executive to be based at any office or
location more than 50 miles from that which the Executive is based immediately prior to the Change
in Control. Executive’s election to terminate his employment for Good Reason shall in no way limit
or restrict his remedies at law or equity for a breach of this Employment Agreement.

     (c) The term “Change in Control” shall mean: (i) the sale of all or substantially all of the
business and/or assets of the Company to a person or entity that is not a subsidiary or other
affiliate of the Company or Castle Harlan Inc. (“CHI”), (ii) the merger or consolidation or other
reorganization of the Company with or into one or more entities that are not subsidiaries or other
affiliates of the Company or CHI, which results in less than 50% of the outstanding equity
interests of the surviving or resulting entity immediately after the reorganization being owned,
directly or indirectly, by the holders (or affiliates of the holders) of

5

 

equity interests of the Company, immediately before such reorganization and (iii) approval by
the stockholders of the Company of the dissolution or liquidation of the Company.

          4.6 Mitigation of Damages.

     (a) Subject to the Executive’s obligations set forth in Section 5 of this Agreement, that
survive the termination of the Executive’s employment, the Executive shall be obligated to use his
reasonable best efforts to mitigate the Executive’s entitlement to Termination Payments and
Termination Benefits under this Employment Agreement by pursuing “Replacement Employment” after
termination of his employment hereunder. For the purposes hereof, “Replacement Employment” shall
mean a similar or better position with a company at a location no more than 50 miles from the
Headquarters, provided that the base salary, or base salary and target bonus, for such position is
equal to or greater than the Executive’s Base Salary under this Employment Agreement (as increased
pursuant to Section 3.1) at the time of his termination of employment with the Company.

     (b) If Executive receives (or accrues) compensation for his services while he is entitled to
receive the Termination Payments and the Termination Benefits, the Termination Payments shall be
reduced by the amount of the compensation so received (or accrued), and the payment of the
Termination Benefits shall cease to the extent the Executive becomes eligible to receive similar
benefits from a new employer or third party. Executive shall immediately notify the Company in
writing of any employment obtained by the Executive during the period that the Executive is
entitled to receive Termination Payments or Termination Benefits, which notice shall contain the
amount of income the Executive will receive and the time of receipt. The Executive shall also give
immediate notice to the Company of any changes in such employment or income.

     5. Covenants.

          5.1 Non-Solicitation or Hire. During the Term and for a period of two years following
the termination of the Executive’s employment for any reason, the Executive shall not directly or
indirectly (a) solicit or attempt to solicit or induce, directly or indirectly, any party who is a
customer or client of the Company or its subsidiaries, or who was a customer or client of the
Company or its subsidiaries at any time during the twelve (12) month period immediately prior to
the date the Executive’s employment terminates, for the purpose of marketing, selling or providing
to any such party any services or products offered by or available from the Company or any of its
subsidiaries; (b) interfere with or attempt to interfere with any business relationships (whether
formed during, or after the Term) of the Company or any of its subsidiaries with their suppliers;
(c) solicit, or attempt to solicit or induce, directly or indirectly, any employee of the Company
or its subsidiaries or any person, who was an employee of the Company or its subsidiaries during
the twelve (12) month period immediately prior to the date the Executive’s employment hereunder
terminates, to terminate such employee’s employment relationship with the Company or its
subsidiaries in order to enter into a similar relationship with the Executive, or any other person
or entity; or (d) hire any employee of the Company or its subsidiaries or any person, who was an
employee of the Company or any of its subsidiaries during the twelve (12) month period immediately
prior to the date the Executive’s employment hereunder terminates.

6

 

          5.2 Non-Competition. During the Term and for a period of two years following the
termination of Executive’s employment for any reason, the Executive shall not, whether individually
as a director, manager, member, stockholder, partner, owner, employee, consultant or agent of any
business, or in any other capacity, other than on behalf of the Company, organize, establish, own,
operate, manage, control, engage in, participate in, invest in, permit his name to be used by, act
as a consultant or advisor to, render services for (alone or in association with any person, firm,
corporation or business organization), or otherwise assist any person or entity that engages in or
owns, invests in, operates, manages or controls any venture or enterprise which engages or proposes
to engage in any business conducted by the Company or its subsidiaries (x) on the date of the
Executive’s termination of employment (including, without limitation, any business which the
Company or its subsidiaries has specific plans to conduct in the future and as to which the
Executive is aware) or (y) within twelve (12) months prior to the Executive’s termination of
employment with the Company, in each case, in the geographic locations where the Company or its
subsidiaries engage or propose to engage in such business (the “Competitive Business”).
Notwithstanding the foregoing, the Executive may, directly or indirectly own, solely as an
investment, securities of any firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise engaged in the business of the Company which are
publicly traded on a national or regional stock exchange or on the over-the-counter market if the
Executive is not a controlling person of, or a member of a group which controls, such entity and
does not directly or indirectly own 5% or more of any class of securities of such entity. Should
any provision of this Section 5.2 conflict with the provisions of any other written agreement
between the Company and the Executive, this Section 5.2 shall govern.

          5.3 Confidentiality. Executive agrees that:

     (a) Except to the extent (i) authorized by the express prior consent of the Board of
Directors, (ii) required by law or any legal process or (iii) desirable in performing the
Executive’s duties under this Employment Agreement, the Executive will not, directly or indirectly,
at any time during the Term, or at any time subsequent to the termination of the Executive’s
employment hereunder, disseminate, disclose or divulge, to any person, firm, corporation,
association or other business entity, Confidential Information of the Company. In the event of a
breach or threatened breach by the Executive of this Section 5.2, the Company shall be entitled to
injunctive relief as well as other applicable remedies at law or in equity available to the Company
against the Executive or others. For purposes hereof, “Confidential Information of the Company”
shall mean any and all information about the Company or any affiliates of the Company, or relating
to the Company’s or its affiliates’ trade secrets, recipes, operating plans, financial performance,
intentions with respect to expansions (including with respect to real estate), in each case
disclosed to the Executive or known by the Executive as a consequence of or through the Executive’s
relationship with the Company, if such information is not publicly available (other than through a
breach by the Executive of this Section 5.2).

     (b) All computer software, business cards, telephone lists, client lists, prospective client
lists, price lists, contract forms, catalogs, books, records, files, recipes, operating plans, and
know-how acquired while the Executive is employed by or otherwise affiliated with the Company are
acknowledged to be the property of the Company and shall not be duplicated, removed from the
Company’s possession or premises or made use of other than in

7

 

pursuit of the business of the Company or as may otherwise be required by law or any legal
process, or as is necessary in connection with any adversarial proceeding against the Company and,
upon termination of the Term for any reason, the Executive shall deliver to the Company, without
further demands, all copies thereof which are then in the Executive’s possession or under his
control.

          5.4 Remedies; Specific Performance. The parties acknowledge and agree that the
Executive’s breach or threatened or attempted breach of any of the covenants or restrictions set
forth in this Section 5 will result in irreparable and continuing damage to the Company and its
subsidiaries for which there may be no adequate remedy at law and that the Company shall be
entitled to equitable relief, including but not limited to, specific performance and injunctive
relief as remedies for any such breach or threatened or attempted breach. The Executive also
agrees that such remedies shall be in addition to any and all remedies, including damages,
available to the Company against the Executive for such breaches or threatened or attempted
breaches. The non-prevailing party shall pay the reasonable legal costs of the prevailing party in
any such action pursuant to this Section 5.4. In addition, without limiting the Company’s and its
subsidiaries’ remedies for any breach by the Executive of any covenants or restrictions set forth
in this Section 5, in the event of such breach, (i) the Executive shall not be entitled to any
payments set forth in Section 4 hereof, except as required by law, and (ii) the Company will have
no obligation to pay any of the amounts that remain payable by the Company under Section 4.

     6. Other Provisions.

          6.1 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telecopied, or sent by certified,
registered, or express mail, postage prepaid, to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice, and shall be deemed given when
so delivered personally, telecopied or if mailed, two days after the date of mailing, as follows:

     (i) if to the Company, to:

Perkins & Marie Callender’s Inc.

6075 Poplar Avenue, Suite 800

Memphis, TN 38119

With copies to:

Castle Harlan Partners IV, L.P.

150 East 58th Street

New York, New York 10155

Attention: David B. Pittaway

Telephone: (212) 317-6440

8

 

Fax: (212) 207-8042

and

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Robert Goldstein, Esq.

Telephone: (212) 756-2000

Fax: (212) 593-5955

	 	(ii)	 	if to the Executive, to the Executive’s home address reflected
in the Company’s records.

     Notwithstanding the foregoing, the Company may designate an alternate address to receive
notices under this Agreement by providing notice to the Executive in accordance with this Section
6.1.

          6.2 Indemnification. The Company shall indemnify the Executive and hold him harmless,
to the maximum extent permitted by applicable law, from and against all loss, damage, liability,
costs, charges and expenses, including reasonable attorney’s fees and costs, incurred or sustained
by him in connection with any action, suit or proceeding to which the Executive may be made a party
by reason of his being, from and after the date hereof, an officer or director of the Company or of
any subsidiary or affiliate of the Company.

          6.3 Entire Agreement. This Employment Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior agreements, written
or oral, with respect thereto, including, without limitation, the Employment Letter Agreement.

          6.4 Waivers and Amendments. This Employment Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only
by a written instrument signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any
right, power or privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. Notwithstanding anything herein to the contrary, the Company
may amend this Employment Agreement at any time, retroactively or otherwise, without the
Executive’s consent, if necessary or desirable to comply with Section 409A of the Code, and
regulations and other guidance of general applicability that are issued thereunder.

          6.5 Governing Law. This Employment Agreement shall be governed by and construed and
enforced in accordance with and subject to, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state.

9

 

          6.6 Arbitration. Except for disputes arising out of an alleged violation of the
covenants set forth in Section 5 of this Employment Agreement, any dispute or controversy arising
under or in connection with this Employment Agreement shall be resolved by binding arbitration,
which shall be held in New York, New York in accordance with the following procedure:

     (a) The Executive shall appoint an employment arbitrator from the pool of arbitrators
registered as employment arbitrators with the American Arbitration Association (“Employment
Arbitrator”) and the Company shall appoint an Employment Arbitrator and the Executive’s appointed
Employment Arbitrator and the Company’s appointed Employment Arbitrator shall mutually agree upon a
single Employment Arbitrator.

     (b) The arbitration hearing shall be held within 15 days (or as soon thereafter as possible)
after the picking of the arbitrator. No continuance of said hearing shall be allowed without the
mutual consent of the Executive and the Company. Absence from or nonparticipation at the hearing by
either party shall not prevent the issuance of an award. Hearing procedures which will expedite
the hearing may be ordered at the arbitrator’s discretion, and the arbitrator may close the hearing
in his or her sole discretion when he or she decides he or she has heard sufficient evidence to
satisfy issuance of an award.

     (c) The arbitrator’s award shall be rendered as expeditiously as possible. The award of the
arbitrator shall be final and binding upon the parties. The award may be enforced in any
appropriate court as soon as possible after its rendition. If an action is brought to confirm the
award, both the Company and the Executive agree that no appeal shall be taken by either party from
any decision rendered in such action.

     (d) The prevailing party in any arbitration between the Company and the Executive with respect
to this Employment Agreement shall be entitled to an award of the fee of the arbitrator borne by
such party and all necessary expenses of the hearing borne by such party (including all attorneys’
fees and disbursements incurred by such party in pursuing such claim), including stenographic
reporter, if employed.

     (e) The Company shall reimburse the Executive for the Executive’s reasonable out of pocket
costs and expenses incurred in connection with traveling to New York, New York to conduct such
arbitration proceeding, upon presentation of such supporting documentation as the Company may
require.

          6.7 Assignment. This Employment Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive or the Company except with the other party’s prior
written consent.

          6.8 Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

          6.9 Headings. The headings in this Employment Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Employment Agreement.

10

 

          6.10 Severability. If any term, provision, covenant or restriction of this Employment
Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign,
federal, state, county or local government or any other governmental, regulatory or administrative
agency or authority to be invalid, void, unenforceable or against public policy for any reason, the
remainder of the terms, provisions, covenants and restrictions of this Employment Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated.

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement the date first above
written.

	 	 	 	 	 
	 	PERKINS & MARIE CALLENDER’S INC.

 	 
	 	By:  	/s/ James
W. Stryker	 
	 	 	Name:  	James W. Stryker	 
	 	 	Title:  	Executive Vice President, Chief Financial Officer	 
	 

	 	 	 	 	 
	 	 	 
	 		/s/ Joseph
F. Trungale	 
	 	 	Joseph F. Trungale 	 
	 	 	 	 
	 

11

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