AGREEMENT made November 21, 1995, between PARADIGM
ENTERTAINMENT Co., a Delaware corporation ("Paradigm"), and XXXXXX X.
XXXXXXXXX ("Xxxxxxxxx").
R E C I T A L S
Paradigm desires to retain Xxxxxxxxx'x experience and
abilities in connection with the operation of the business conducted by Paradigm
and has offered to engage Xxxxxxxxx to render consultative and advisory services
to it, and
Xxxxxxxxx desires to accept such engagement, upon the terms
and conditions set forth below.
NOW, THEREFORE, it is agreed as follows:
A G R E E M E N T
1. TERM AND DUTIES.
(a) Paradigm hereby engages Xxxxxxxxx for a period
beginning on November 21, 1995, and ending on November 20, 1998, as a general
advisor and consultant to management on matters pertaining to Paradigm's
business. Xxxxxxxxx shall devote so much of his time, attention and energies as
he shall deem reasonable required to perform his duties hereunder, subject to
his availability, reasonable vacations compatible with his position and with due
regard to the preservation of his health. It is understood that Xxxxxxxxx'x
duties are to be conducted in the City and State of New York. Paradigm shall
give Xxxxxxxxx not less than seven (7) days' prior written notice of any and all
meetings at which Xxxxxxxxx' attendance is requested, and his attendance at any
such meeting will be subject to his availability.
(b) Paradigm may only terminate Xxxxxxxxx'x
engagement for Cause (as defined below) by giving written notice of termination
to Xxxxxxxxx as herein provided, and the date of termination of this Agreement
will be the effective date of such notice. As used herein, "Cause" shall mean
only Xxxxxxxxx'x conviction of a felony under federal or state law.
(c) Xxxxxxxxx may terminate this Agreement either (i)
in the event of a Change in Control (as hereinafter defined) of Paradigm, or
(ii) for Good Reason (as hereinafter defined) by giving notice of termination to
Paradigm (the "Executive Notice"). The date of termination of this Agreement
pursuant to this Section l(c) shall be the effective date of such Executive
Notice.
(d) In the event that this Agreement is terminated by
Paradigm (except in the case of a termination for Cause) or by Xxxxxxxxx
pursuant to Section 1(c) hereof, Paradigm will pay to Xxxxxxxxx in a lump sum
payment within 15 days of the date of termination an amount equal to the amount
of compensation
Xxxxxxxxx would have received but for such termination for the remainder of the
original term hereof.
(e) Xxxxxxxxx will not be required to mitigate the
amount of any payment provided for in Section l(d) hereof by seeking other
engagements or employment nor will the amount of any payment provided for in
Section 1(d) be reduced by any compensation earned by Xxxxxxxxx as the result of
engagement or employment by another person or entity after the date of
termination.
(f) For purposes of this Agreement, a "Change in
Control" of Paradigm means (i) the sale by Paradigm of all or substantially all
of its assets to a single purchaser or to a group of purchasers in related
transactions; (ii) the merger or consolidation of Paradigm with a third party,
as a result of which Paradigm is not the surviving entity (as defined in Rule
13d-3 under the Securities Exchange Act of 1934); or (iii) securities of
Paradigm representing 33 1/3% or more of the combined voting power of the
Paradigm's outstanding securities are sold or otherwise disposed of (other than
pursuant to a private placement of securities on or before December 1, 1995 or a
public offering of such securities) in one or a related series of transactions
by Paradigm or current holders of such securities to a third person not
affiliated with or controlled by such holder or holders.
(g) For purposes of this Agreement, termination of
this Agreement by Xxxxxxxxx for "Good Reason" means a termination:
(i) based on the assignment to Xxxxxxxxx by
the Board of Directors of Paradigm of any duties inconsistent with his
positions, duties, responsibilities and status as an senior management executive
with Paradigm; or
(ii) based on failure of Paradigm to pay
compensation or other amounts due hereunder when due following written notice
and ten (10) days to cure such default.
(h) Xxxxxxxxx is currently employed on a full-time
basis as chief executive officer of Semaphore Entertainment Group and related
companies (collectively, "SEG") and intends to remain so employed. He may also
be engaged from time to time hereafter by other companies It is acknowledged
that SEG is involved in the entertainment industry and may have interests in
businesses similar to that of Paradigm. It is understood and agreed that in no
event shall such employment of Xxxxxxxxx by SEG or any other company be deemed a
conflict of interest with Xxxxxxxxx'x duties hereunder. It is further understood
and agreed that such employment by SEG or any other company shall severely limit
the availability of Xxxxxxxxx to Paradigm, and that such limited availability
shall in no event be deemed a breach or default by him hereunder.
2
2. DISABILITY WAIVER. Paradigm recognizes that Xxxxxxxxx'x
past experience in the entertainment industry has created unique goodwill to
Paradigm in the operation of its business. Paradigm desires to retain
Xxxxxxxxx'x services and his other agreements herein set forth, even though
Xxxxxxxxx may become disabled or incapacitated. Accordingly, it is expressly
understood that Xxxxxxxxx'x inability to render services to Paradigm because of
absences, or temporary or permanent illness, disability, or incapacity, or for
any other reasonable cause, shall not constitute a failure to perform his
obligations hereunder and shall not be deemed a breach or default by him.
3. COMPENSATION.
(a) Paradigm shall pay to Xxxxxxxxx, as full
compensation for any and all services that Xxxxxxxxx may render to Paradigm, the
sum of $12,500 per month, to be paid quarterly or on the first day of each month
during the term of this Agreement starting December 1, 1995 as he shall
determine. It is agreed that the payment due on December 1, 1995, will be
$16,666.66 (containing an adjustment for the term hereof occurring in November,
1995), and that the last payment hereunder will be likewise adjusted.
(b) Paradigm will reimburse Xxxxxxxxx for all
expenses reasonably incurred by Xxxxxxxxx in connection with the performance by
Xxxxxxxxx of his duties (including business travel, which shall include business
class air transportation, accommodations, and ground transportation for any
travel outside of the City of New York and entertainment expenses), in
accordance with Paradigm's policy with respect thereto as in effect from time to
time.
4. DEATH BENEFIT. Should Xxxxxxxxx die during the term of this
Agreement, this Agreement shall terminate as of the last day of the month of his
death. Paradigm shall, for a period of three months after Xxxxxxxxx'x death, pay
to his legal representatives, or to his surviving widow (provided that Xxxxxxxxx
has so instructed Paradigm in writing prior to his death) the sum of $12,500, to
be paid on the first day of each month during the three-month period. If
Xxxxxxxxx dies later than September 1. 1997, however, the $12,500 monthly
payments to his legal representatives or widow, as the case may be, shall be
made only until (and including) November 1, 1998.
5. RESTRICTIVE COVENANT. Xxxxxxxxx agrees that during the term
of employment, Xxxxxxxxx shall promptly reveal to Paradigm's Board of Directors
all material matters pertaining to Paradigm's business or interest. Meyrowtiz
shall not accept full-time employment from any other concern which is engaged as
its principal business in the manufacturing and distribution of recorded popular
music unless he first resigns as a consultant to Paradigm and terminates this
Agreement: provided, however, that the foregoing restriction shall not be deemed
to prohibit Meyrowtiz from (a) continuing in any business in which he is now
involved or in which he held, directly or indirectly, any interest during the
last three years, (b) continuing to work for SEG, regardless of the business in
which SEG may be engaged.
3
6. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration in accordance with
the rules of the American Arbitration Association. Any judgment upon the award
rendered in such arbitration may be entered in any court of competent
jurisdiction. In the event the Xxxxxxxxx prevails in any such proceeding,
Paradigm will pay to Xxxxxxxxx on demand all costs and expenses (including costs
of investigation) incurred by Xxxxxxxxx in connection therewith (including
reasonable attorneys' fees).
7. WAIVER, MODIFICATION, OR CANCELLATION. Any waiver,
alteration, or modification of any of the-provisions of this Agreement, or its
cancellation or replacement, shall not be valid unless in writing and signed by
the parties.
8. CONSTRUCTION. This Agreement shall be governed by the laws
of the State of New York, without regard to principles of conflict of laws.
9. ASSIGNMENT. This Agreement shall inure to the benefit of
and bind the parties and their respective legal representatives, successors, and
assigns.
10. NOTICES. All notices, requests, demands an other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand, or when delivered if mailed by registered or certified mail,
postage prepaid, or sent by private express mail to the respective addresses as
follows:
If to Paradigm, to: Paradigm Music Entertainment Co.
00 Xxxxxx Xxxxx
0xx xxxxx
Xxx Xxxx, XX 00000
If to Xxxxxxxxx, to: Semaphore Entertainment Group
00 Xxxx 00xx Xxxxxx,
0xx xxxxx
Xxx Xxxx, XX 00000
Copy to: Xxxxx X. Xxxxxxxxx, Esq.
Simon, Meyrowitz, Xxxxxxxxx
and Schlussel
000 Xxxx Xxxxxx Xxxxx - 00X
Xxx Xxxx, Xxx Xxxx 00000
or to such other addresses as a party hereto shall have designated by like
notice to the other parties hereto.
11. ENTIRE AGREEMENT. This Agreement supersedes all agreements
previously made between the parties relating to its subject matter. There are no
other understandings or agreements.
4
12. NON-WAIVER. No delay or failure by either party in
exercising any right under this Agreement, and no partial or single exercise of
that right, shall constitute a waiver of that or any other right.
13. HEADINGS. Headings in this Agreement are for convenience
only and shall not be used to interpret or construe its provisions.
14. 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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
PARADIGM MUSIC ENTERTAINMENT CO.
By: ____________________________________
Xxxxxx XxXxxxxxxx, President
------------------------------------
Xxxxxx X. Xxxxxxxxx
0
Xxxxxxxx X
Xxxxxxxx X
