AGREEMENT, entered into as of October 10, 1997
(the "Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), Lancit
Media Entertainment, Ltd. ("Lancit") and The Strategy
Licensing Company, Inc. ("Strategy").
WHEREAS, pursuant to a Stock Exchange Agreement between Lancit
and ▇▇▇▇▇▇▇, dated October 1, 1993, Lancit acquired 85% of the outstanding
shares of capital stock of Strategy from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ retained the
remaining 15% of the stock;
WHEREAS, in connection with the sale of the stock to Lancit,
▇▇▇▇▇▇▇ and Lancit entered into an Employment Agreement pursuant to which
▇▇▇▇▇▇▇ acted as President of Strategy and, among other things, to a provision
restricting her ability to compete with Strategy after the termination of her
employment;
WHEREAS, the employment period under the Employment Agreement
expired and ▇▇▇▇▇▇▇ continued her employment with Strategy after the expiration;
and
WHEREAS, Lancit, Strategy and ▇▇▇▇▇▇▇ now desire to terminate
▇▇▇▇▇▇▇'▇ employment with Strategy and Lancit desires to acquire the remaining
15% of the Strategy stock.
NOW THEREFORE, in consideration of the mutual covenants and
representations herein set forth the parties agree as follows:
1. Definitions.
"Affiliate" means a Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with the Person specified. For purposes of this definition,
the term "control" (including the terms "controlling," "controlled by" and
"under common control with") of a Person means the possession, direct or
indirect, of the power to (i) vote 50% or more of the Voting Stock of such
Person or (ii) direct or cause the direction of the management and policies of
such Person, whether by contract or otherwise.
"Claims" means any and all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, notes,
bills, specialities, covenants, contracts, controversies, variances, trespasses,
damages, judgments, executions, claims (including without limitation, claims for
indemnity, contribution, costs or attorneys's fees), demands and any and all
proceedings whatsoever, whether in law, admiralty, equity or otherwise.
"Employment Agreement" means the Employment
Agreement between Strategy and ▇▇▇▇▇▇▇, dated July 1, 1993.
"Person" means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company, limited
liability company, trust, estate, unincorporated organization, governmental or
regulatory body or other entity.
"Shareholders Agreement" means the
Shareholders Agreement among Strategy, Lancit and ▇▇▇▇▇▇▇, dated December 14,
1993.
"Strategy Related Entities" means Strategy
and its Affiliates (including without limitation Lancit), Affiliates hereafter
created, predecessors, representatives, heirs, successors and assigns, and the
officers, directors, employees, shareholders, partners and agents, past, present
and future, and the heirs, executors, administrators, insurers, legal
representatives, predecessors, successors and assigns of each of the foregoing.
2. Stock Transfer. In consideration for all of the covenants
and agreements contained herein, and in complete redemption of all her right,
title and interest to all of the shares of capital stock of Strategy held by
▇▇▇▇▇▇▇ (the "Shares"), concurrently with the execution of this Agreement,
▇▇▇▇▇▇▇ shall transfer to Lancit, all of the Shares by executing a stock power
in the form of Exhibit A hereto.
3. Payment; Resignation.
3.1 Resignation. Effective September 23,
1997 (the "Termination Date"), ▇▇▇▇▇▇▇'▇ employment is terminated and she is no
longer President of Strategy or a member of the Board of Directors of Strategy,
and she no longer holds any other positions with Strategy and/or Lancit and any
of their respective Affiliates. ▇▇▇▇▇▇▇ has no
right to reinstatement as an employee of Strategy and shall not seek
reemployment, or employment by Lancit or any of its Affiliates.
3.2 Severance Payment. Strategy shall pay
▇▇▇▇▇▇▇ $30,788.43 (the "Severance Payment"). Except for the Payment, ▇▇▇▇▇▇▇
has no right to receive any money from Strategy or any of the Strategy Related
Entities.
3.3 Termination of Shareholders Agreement.
Effective as of the date hereof the parties agree that the Shareholders
Agreement shall be deemed terminated.
3.4 Exercise of Options. As of the date
hereof, ▇▇▇▇▇▇▇ holds 15,000 options to purchase Lancit common stock.
Notwithstanding anything herein to the contrary, ▇▇▇▇▇▇▇ shall have 3 months
from the Termination Date to exercise such options.
4. Releases and Exceptions to the Noncompete.
4.1 Exception to the Noncompete. Effective
as of the date hereof, Strategy hereby waives its rights under the Covenant Not
to Compete (the "Noncompete") contained in Section 7 of the Employment Agreement
with respect to the properties and/or entities listed on Schedule A hereto. It
is expressly agreed by the parties hereto that ▇▇▇▇▇▇▇ shall continue to be
bound by the terms of the Noncompete in all other respects, as well as the
provisions of Sections 8 and 9 of the Employment Agreement. ▇▇▇▇▇▇▇ acknowledges
that except as provided on Schedule A hereto,
the obligations created by the Noncompete expire on September 23, 1999, and that
until such time she is bound by the terms thereof with the exception of the
provisions of the first sentence of this Section 4.1.
4.2 ▇▇▇▇▇▇▇ Release of the Strategy Related
Entities. Effective as of the date hereof, except for any Claims arising out of
the obligations under this Agreement, ▇▇▇▇▇▇▇ hereby releases and forever
discharges the Strategy Related Entities from any and all Claims against any of
the Strategy Related Entities, whether or not well-founded in fact or law, and
whether or not known to ▇▇▇▇▇▇▇, which ▇▇▇▇▇▇▇ ever had, now has, or might have
in the future, upon or by reason of any matter, cause or thing, or any action or
inaction, whatsoever from the beginning of the world to and including the date
of this Agreement, including, without limitation, all Claims relating to her
employment, the Employment Agreement or the Shareholders Agreement and all
Claims which could arise under Title VII of the Civil Rights Act of 1964, as
amended, the New York Human Rights Law, the Age Discrimination in Employment Act
of 1967, and any and all other laws or obligations regulating the employment
relationship between the parties.
4.3 The Strategy Related Entities Release of
▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ represents that she is not aware of any
Claims that the Strategy Related Entities may have against
her as of the date of this Agreement and that she is not
aware that she has acted or failed to act in a manner giving rise to any such
Claims. Based upon and subject to such representations, except for any rights
they may have under this Agreement (including without limitation the provisions
of the Employment Agreement referred to in Section 4.1), the Strategy Related
Entities forever release and discharge ▇▇▇▇▇▇▇ from any and all Claims against
▇▇▇▇▇▇▇, her heirs, successors and assigns, whether or not well-founded in fact
or law, which they ever had, now have, or may have against ▇▇▇▇▇▇▇ in the future
upon or by reason of any matter, cause or thing, or any action or inaction
whatsoever from the beginning of the world to and including the date of this
Agreement, except for any Claims (i) caused by ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ neglect or
intentional misconduct, and (ii) arising out of the obligations created by the
Agreement.
5. Settlement a Compromise; Not an Admission. The parties
hereto, and each of them, understand and agree that the settlement effectuated
by this Agreement is a compromise of disputed Claims, and is not intended nor is
it to be construed as an admission of liability by any party hereto.
6. Irreparable Harm. ▇▇▇▇▇▇▇ acknowledges that a breach of
Sections 4.1 and 8 hereof could cause irreparable injury and harm to Strategy
and Lancit and would cause damage for which a remedy at law would be inadequate.
Therefore, the parties agree that Strategy and Lancit will
be entitled, in addition to any other remedies that it may have, to a temporary
restraining order, preliminary injunction, and/or permanent injunction or other
equitable relief in any court of competent jurisdiction to prevent or otherwise
to restrain a breach, or to compel specific performance, of any or all of
Sections 4.1 and 8 of this Agreement. Nothing in this Section 6 shall be
construed to prohibit or restrain Strategy and Lancit from pursuing any other
remedies or rights available to Strategy and Lancit for any breach of this
Agreement, including the remedy of damages and right of set-off.
7. Representations and Warranties.
7.1 Representations and Warranties of
▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ makes the following representations and
warranties to the Strategy Related Entities:
7.1.1 No Assignment of Claims. ▇▇▇▇▇▇▇
has not assigned or otherwise transferred any of the Claims
being released herein.
7.1.2 Possession of Documents. ▇▇▇▇▇▇▇
does not have in her possession, custody or control, any books, records,
videotapes, memoranda, papers, reports, correspondence, data, lists or documents
of any description (whether in hard copy or on computer disks, computer hard
drives or in other embodiments) which belong to Strategy or Lancit, or contain
information relating to Strategy or Lancit.
7.1.3 Authority. ▇▇▇▇▇▇▇ has the
authority to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement when executed and delivered will constitute
the valid and binding obligation of ▇▇▇▇▇▇▇, enforceable in accordance with its
terms.
7.1.4 No Representations by Strategy.
▇▇▇▇▇▇▇ acknowledges that none of the Strategy Related Entities has made any
representations or warranties in connection with this Agreement or the
transactions contemplated herein except those expressly set forth in Section
7.2.
7.1.5 Knowledge; No Reliance. ▇▇▇▇▇▇▇
is a sophisticated investor, familiar with the licensing industry generally and
the business of Strategy in particular, and is being advised by, or has access
to advice from, an experienced financial advisor. ▇▇▇▇▇▇▇ has been a shareholder
and the President of Strategy since its inception. ▇▇▇▇▇▇▇ is aware of and has
made full investigation of the operations, condition and prospects of Strategy
and discussed and is familiar with the business, management, financial affairs
and prospects of Strategy. ▇▇▇▇▇▇▇ has, independently (or together with her
financial advisor) and based upon such documents and information as she has
available, made her own analysis and decision to enter into this Agreement. In
connection with that
decision, neither Strategy nor any of the Strategy Related Entities has made
(and has no responsibility with respect to), and ▇▇▇▇▇▇▇ is not relying upon,
any representation or warranty, express or implied, or any duty of disclosure by
Strategy as to any matter, including without limitation matters relating to the
Shares.
7.2 Representations and Warranties of
Strategy and Lancit. Each of Strategy and Lancit has the authority to enter into
this Agreement and to perform the transactions contemplated hereby. This
Agreement when executed and delivered will constitute the valid and binding
obligation of each of Strategy and Lancit, enforceable in accordance with its
terms.
8. Confidentiality; Nondisparagement. Neither
party, nor anyone acting on such party's behalf, shall
publish, disseminate or communicate to any person
whatsoever, directly or indirectly (except as required by
law and to such parties' attorneys, accountants or tax
advisors), information concerning this Agreement. ▇▇▇▇▇▇▇
shall not make or cause to be made, any statement or
communicate any information that disparages the reputation
of the Strategy Related Entities or any business or property
in which such entities have an interest. Strategy and
Lancit shall use reasonable efforts to cause their officers,
directors, shareholders and employees not to make or cause
to be made, any statement or communicate any information
that disparages the reputation of ▇▇▇▇▇▇▇.
9. Return of Property; Cooperation.
9.1 Return of Property. Strategy shall
deliver to ▇▇▇▇▇▇▇ at the address listed in Section 11, all of the furniture
listed on Schedule B hereto. Upon receipt of the furniture listed on Schedule B,
▇▇▇▇▇▇▇ shall have received from the Strategy Related Entities all of her
personal property.
10. Taxes. All payments hereunder are subject to
all applicable federal state and local tax, FICA and other
withholding requirements.
11. Notices. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
facsimile (and receipt thereof has been confirmed by return facsimile), in each
case to the applicable addresses set forth below; provided that delivery shall
be deemed complete when delivered to the address designated below and shall not
require actual receipt by the individual to whom the communication's attention
has been marked:
If to ▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lancit or Strategy, to each at:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
12. Arbitration. The parties agree that all disputes arising
hereunder shall be settled by arbitration to be held in New York, New York in
accordance with the applicable rules of the American Arbitration Association or
any successor thereto. The arbitrator may grant injunctions or other relief in
such dispute. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Nothing contained herein shall
prevent any party from seeking injunctive relief, if necessary from a court of
competent jurisdiction.
13. Cooperation between the Parties. At the request of
Strategy or Lancit, ▇▇▇▇▇▇▇ shall provide reasonable cooperation in connection
with any matters relating to tax issues of either Strategy or Lancit and will
execute all documents necessary to effectuate the terms of this Agreement.
14. New York Law. This Agreement is entered into in the State
of New York and shall be interpreted in accordance with the internal laws of the
State of New York, without regard to New York's choice-of-law rules.
15. Binding Nature. This Agreement shall inure to the benefit
of, and be binding upon, and enforceable against, the successors, heirs,
personal representatives and permitted assigns of the parties hereto.
16. Amendments. This Agreement may not be modified, amended or
terminated except by a writing signed by the parties against which such
modification, amendment or termination is sought to be enforced.
17. Blue Penciling. If any court determines that any portion
of this Agreement is unenforceable because of scope or duration, such court
shall have the power to reduce the duration or scope of such portion of the
Agreement, and, in its reduced form, the Agreement shall then be enforceable.
18. Counterparts. This Agreement may be executed
in counterparts, each executed counterpart constituting an
original but all together only one agreement among the
parties hereto.
19. Delay. No course of dealing and no delay on the part of a
party in exercising any right, power or remedy conferred by this Agreement shall
operate as a waiver thereof or otherwise prejudice such party's rights, powers
or remedies. No single or partial exercise of any rights, powers or remedies
shall preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
20. Assignment. No party may assign or transfer any of its
rights or obligations under this Agreement without the express written consent
of the others, which consent may be withheld for any reason. However, the
Strategy Related Parties may transfer their respective rights and obligations
under this Agreement as part of a larger transfer of respective rights and
obligations by operation of law to a successor in connection with any merger,
reorganization, liquidation or amalgamation involving any of the Strategy
Related Entities.
21. Advice of Counsel. In connection with the negotiation and
execution of this Agreement (including the ADEA Waiver appended hereto), ▇▇▇▇▇▇▇
has been advised by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel of her own choosing. ▇▇▇▇▇▇▇
has read this Agreement in its entirety, fully understands
its terms and is signing it voluntarily of her own free
will.
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Agreement to be executed and delivered at New
York, New York as of the date first written above.
THE STRATEGY LICENSING
COMPANY, INC.
By /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
LANCIT MEDIA
ENTERTAINMENT, LTD.
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit A
STOCK POWER
For value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, does hereby sell, assign and transfer unto
LANCIT MEDIA ENTERTAINMENT, LTD., fifteen (15) shares of Common Stock of The
Strategy Licensing Company, Inc. standing in her name on the books of said
corporation, and does hereby irrevocably constitute and appoint ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ attorney to transfer the said stock on the books of said corporation
with full power of substitution in the premises.
Dated: October 10, 1997
By/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Schedule A
Properties and/or Entities from which ▇▇▇▇▇▇▇
is released from Non-Compete
1. "America's Dumbest Criminals"
2. "WORLD WILDLIFE FUND," and the marks "WWF" and the
Panda design.
3. Except as set forth in item 2 above, all properties owned by World
Wildlife Fund, Inc., a Delaware corporation, but such release shall not
be effective
until after July 31, 1998.
4. "Love Letters"
5. "The American Experience"
6. Except as set forth in item 5 above, all properties owned by WGBH
Educational Foundation, a non-profit charitable Massachusetts
corporation, but such release shall not be effective until after July
31, 1998.
7. "Sonic the Hedgehog"
8. "Bedtime Buddies"
9. "Class of 2000" and all properties owned by the owner
thereof.
10. "Psycho Chihuahua"/Wrench, L.L.C.
Schedule B
Furniture to be Returned to ▇▇▇▇▇▇▇.
Two burgundy lamps with shades
Four small black chairs
Six burgundy chairs
One desk/conference room table
WAIVER OF CLAIMS UNDER AGE DISCRIMINATION
IN EMPLOYMENT ACT (ADEA)
This statement is attached to and made a part of the Agreement dated October 10,
1997. By signing this statement, I am waiving any claims that I may now have
against the Strategy Related Entities under the Age Discrimination in Employment
Act (ADEA). My signature below acknowledges that I have read and fully
understand this waiver and the terms of the appended severance proposal
(collectively, the "Agreement"), that I have had the opportunity to consult with
an attorney regarding the terms of the Agreement, that I have had at least 21
days to consider this waiver, that I am entering into this Agreement freely and
without coercion, not in reliance on any representation or promises other than
those contained in the Agreement, and that I intend to be bound by the terms of
the Agreement. I understand that the benefits provided under the Agreement are
conditioned upon this waiver.
I agree that I have had seven days to consider the terms of the Agreement and to
consider whether to revoke my acceptance of the terms of this Agreement. I
understand that I shall be bound by all of the terms of the Agreement if I have
not so revoked my acceptance as described in the preceding sentence.
ACCEPTED AND AGREED TO:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
STOCK POWER
For value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, does hereby sell, assign and transfer unto
LANCIT MEDIA ENTERTAINMENT, LTD., fifteen (15) shares of Common Stock of The
Strategy Licensing Company, Inc. standing in her name on the books of said
corporation, and does hereby irrevocably constitute and appoint ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ attorney to transfer the said stock on the books of said corporation
with full power of substitution in the premises.
Dated: October 10, 1997
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇