EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into this __ day
of March 2001, to be effective as of February 12, 2001 (the "Effective Date"),
by and between TEAM COMMUNICATIONS GROUP, INC., a California corporation (the
"Company") having offices at 00000 Xxxxxxxx Xxxxxxxxx, 0xx xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, and XXXXXXX X. XXXXXXX, an individual residing at 00 Xxxxxxx
Xxxx, Xxxxxxx Xxxxx, XX 00000 (the "Executive");
W I T N E S S E T H:
WHEREAS, the Executive has heretofore served as a member of the board of
directors of the Company; and
WHEREAS, the Executive has extensive experience in connection with
licensing, marketing, and promotion and development of consumer and
entertainment products of all types and descriptions; and
WHEREAS, the Company desires to assure itself of the right to the
Executive's services from and after the date hereof, on the terms and conditions
of this Agreement; and
WHEREAS, the Executive is willing to render services to the Company from
and after the date hereof, on the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company shall retain the Executive, and the Executive shall render services to
the Company, as its Chairman of the Board of Directors and Chief Executive
Officer. In such connection, the Executive shall supervise, direct and be
responsible for (i) the implementation of all corporate policies and directives
established by the Board of Directors of the Company, (ii) the operation and
management of the Company; and (iii) such other duties and responsibilities as
are customarily performed by a Chief Executive Officer of a corporation. The
Executive shall report to and shall be subject to the ultimate direction and
guidance of the Board of Directors of the Company.
(b) Throughout the period of his employment hereunder, the Executive
shall devote such portion of his business time and efforts as he shall
reasonably determine shall be required to perform his duties and
responsibilities hereunder on behalf of the Company faithfully, diligently and
to the best of his ability. The Company expressly acknowledges that the
Executive has informed the Company of the nature and extent of the other
business activities in which he is engaged which take up a portion of his
business and professional time, and the
Company hereby expressly agrees that the Executive may continue to engage in
such other business activities; provided, however, the Executive does hereby
covenant and agree that in connection with engaging in any such other business
activities, he shall not compete with or engage in activities which represent an
actual or potential conflict of interest with the business then engaged in by
the Company, unless otherwise expressly approved by the other members of the
Board of Directors of the Company. By its execution of this Agreement, the
Company and the Board of Directors hereby approve of the Executive serving as
Chairman of the Board of Directors of Victory Entertainment Corp. ("Victory"), a
producer and distributor of television and Internet programming and marketer of
program-related branded consumer merchandise, so long as such activities on
behalf of Victory do not interfere with the obligations of the Executive
hereunder, including those set forth in the first sentence of this Section 1(b).
(c) The Executive shall do such traveling as may reasonably be
required in connection with the performance of such duties and responsibilities;
provided, however, that the Executive shall not be assigned to regular duties
such as would reasonably require him to relocate his permanent residence from
the greater Los Angeles, California area.
(d) Throughout the term of this Agreement, the Company shall cause
the Executive to be nominated for election to the Board of Directors of the
Company, and, if so elected, the Board of Directors shall elect him to the
position of Chairman of the Board of Directors.
2. Term of Employment; Termination.
(a) Subject to prior termination in accordance with Section 2(b)
below, the Executive's full-time employment hereunder shall commence on the
Effective Date and shall continue through and including March 31, 2004 (the
"Initial Term"). Following the Initial Term, this Agreement shall continue on
the same terms and conditions set forth herein for additional one (1) year
periods (each a "Renewal Period"), unless either the Company or the Executive
elects to terminate this Agreement by written notice to the other given not
later than thirty (30) days prior to the expiration date of the Initial Term or
any Renewal Period.
(b) In addition to termination at the end of the Initial Term or any
Renewal Period, this Agreement:
(i) may be terminated at any time upon mutual written
agreement of the Company and the Executive;
(ii) may be terminated at any time, at the option of the
Executive, upon thirty (30) days' prior written notice to the Company, in the
event that (A) the Company shall fail to make any material payment to the
Executive required to be made under the terms of this Agreement, or (B) the
Company shall fail to perform any other material covenant or agreement to be
performed by the Company under this Agreement or under the Registration Rights
Agreement (as hereinafter defined) and shall fail to cure or remedy same within
thirty (30) days after written notice thereof by the Executive to the Company;
(iii) may be terminated, at the option of the Board of the
Company (the Executive abstaining from any such vote), at any time "for cause"
(as hereinafter defined);
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(iv) may be terminated, at the option of the Company, at any
time in the event of the "permanent disability" (as hereinafter defined) of the
Executive; or
(v) shall automatically terminate upon the death of the
Executive.
(c) As used herein, the term "for cause" shall mean and be limited
to the mutual agreement of the parties or a final determination as provided in
Section 11 of this Agreement that there has occurred: (i) a material breach of
this Agreement by the Executive which in any case was not corrected within
thirty (30) days after written notice of same from the Company to the Executive
(which notice shall specify in detail the nature of Executive's alleged breach);
(ii) gross negligence or malfeasance by the Executive in the performance of his
duties and responsibilities hereunder; (iii) in the absence of a breach by the
Company of its obligations hereunder, the voluntary resignation by Executive as
an employee of the Company without the prior written consent of the Company, or
(iv) the willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise. No act or failure
to act on the Executive's part shall deemed "willful" unless done, or omitted to
be done, by the Executive not in good faith and without reasonable belief that
the Executive's action or omission was in the best interest of the Company.
(d) As used herein, the term "permanent disability" shall mean, and
be limited to, any physical or mental illness, disability or impairment that
prevents, or is reasonably likely to prevent, the Executive from continuing the
performance of his normal duties and responsibilities hereunder for a period (i)
in excess of six (6) consecutive months, or (ii) of six (6) months or more
(whether or not consecutive) in any twelve (12) month period. For purposes of
determining whether a "permanent disability" has occurred under this Agreement,
the written determination thereof by two (2) qualified practicing physicians
selected and paid for by the Company (and reasonably acceptable to the
Executive) shall be conclusive.
(e) Upon any termination of this Agreement as provided in Section
2(b), the Executive (or his estate or legal representatives, as the case may be)
shall be entitled to receive any and all (i) earned but unpaid Base Salary (as
such term is hereinafter defined) appropriately prorated to and as of the
effective date of termination (based on the number of days elapsed prior to the
date of termination), and (ii) any other amounts then due and payable to the
Executive hereunder; provided, however,
(A) if such termination was as a result of the application of
the provisions of Section 2(b)(ii) above, in addition to any other amounts then
due and payable to the Executive, the Executive or his estate or legal
representatives shall be entitled to receive the Base Salary through the entire
Initial Term of this Agreement or any Renewal Period, if applicable; and
(B) if such termination was as a result of the application of
the provisions of Section 2(b)(iv) or Section 2(b)(v) above, in addition to any
other amounts then due and payable to the Executive, the Executive or his estate
or legal representatives shall be entitled to receive the Base Salary for a
period equal to the lesser of eighteen (18) months following the effective date
of termination of this Agreement or the remaining Initial Term of this Agreement
or any Renewal Period, if applicable.
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All such payments shall be made on the next applicable payment date
therefor (as provided in Section 3 below) following the effective date of
termination. Such payments shall constitute all amounts to which the Executive
(or his estate or legal representative) shall be entitled upon termination of
this Agreement.
(f) Notwithstanding anything to the contrary contained in this
Agreement, if it shall be established or mutually agreed that termination of
this Agreement by the Executive under the provisions of Section 2(b)(ii) above
was valid and for good reason, in addition to (and not in lieu of) any other
payments and remedies then available to the Executive pursuant to Section 2(e)
above, all Options granted under Section 4 of this Agreement shall become fully
Vested Options (as hereinafter defined), and all payments under Section 401(k)
plans for the benefit of the Executive shall become fully vested, to the extent
permitted under any then existing plans.
3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be rendered
hereunder, the Company shall pay to the Executive an annual base salary of Six
Hundred Thousand ($600,000) Dollars per annum (the "Base Salary"). Such Base
Salary shall be subject to (i) increase as provided in Section 3(b) hereof, and
(ii) payroll deductions and other withholdings as and to the extent required by
law from time to time. Such Base Salary shall be payable to the Executive in
accordance with the Company's payroll practices.
Notwithstanding the foregoing, until such time as the Company shall
have received gross proceeds aggregating Three Million ($3,000,000) Dollars or
more from any one or more public or private issuance of debt or equity
securities of the Company, strategic alliance, joint venture, partnership,
lease, franchise or license agreement which shall be approved by the Board of
Directors of the Company (individually a "Financing" and collectively
"Financings"), fifty (50%) percent the Executive's Base Salary shall accrue, as
hereinafter provided, and be deferred. At such time as one or more Financings of
Three Million ($3,000,000) Dollars or more shall have been obtained, all accrued
and unpaid Base Salary, calculated from the Effective Date of this Agreement
shall become immediately due and payable to the Executive or his legal
representatives.
In addition to (and not in lieu of) the foregoing Base Salary, in
recognition of the significant services heretofore performed by the Executive on
an emergency basis, the Company does hereby award to the Executive a signing
bonus of One Hundred and Fifty Thousand (150,000) shares of Company Common
Stock, to be issued to the Executive as soon as practicable following the
execution and delivery of this Agreement.
(b) Annual Increases in Base Salary. Effective as of April 1, 2002
and on each March 31st (an "Anniversary Date") thereafter during the Initial
Term of this Agreement the Executive's annual Base Salary shall be increased
during the twelve (12) consecutive months commencing April 1 and ending March 31
(each an "Anniversary Period") to the amounts set forth below for each
Anniversary Period in question:
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Anniversary Period Base Salary
------------------ -----------
April 1, 2002 to March 31, 2003 $650,000
April 1, 2003 to March 31, 2004 $725,000
(c) Bonus. Commencing with March 31, 2002 and on each subsequent
March 31st Anniversary Date during the Term of this Agreement, the Company shall
pay to the Executive an annual cash bonus (the "Bonus"), subject to the
provisions of this Section 3(c). Such annual Bonus shall be equal to seven and
one-half (7.5%) percent of the "Company Net Pre-Tax Earnings" (as hereinafter
defined) achieved by the Company in each of the fiscal years of the Company
immediately preceding the Anniversary Date in question, commencing with the
fiscal year ending December 31, 2001. As used herein, the term "Company Net
Pre-Tax Earnings" shall mean the consolidated net income of the Company and each
of its consolidated subsidiaries in each of the fiscal years ending during the
Term of this Agreement (commencing with the fiscal year ending December 31,
2001), including all extraordinary gains or losses, all as set forth on the
audited consolidated statements of income(loss) of the Company for such fiscal
year, plus the amount actually deducted on the statements of income for such
fiscal year in respect of income taxes, after giving effect to the application
of any benefits derived from the utilization of any net operating loss
carryforwards in such fiscal year.
(d) Fringe Benefits. The Company shall provide the Executive with to
an automobile allowance of $1,500 per month to enable the Executive to lease a
Company car of his choosing. To the extent reasonably required in connection
with the performance of his duties hereunder, the Company will also provide and
pay for two full-time secretaries for the Executive who shall work in the
premises of the Company. The Company shall also make available to the Executive,
throughout the period of his full-time employment hereunder, such benefits and
perquisites as are generally provided by the Company to its executive employees,
including but not limited to eligibility for participation in any group life,
health, dental, vision, disability or accident insurance, pension plan,
profit-sharing plan, retirement savings plan, 401(k) plan, or other such benefit
plan or policy which may presently be in effect or which may hereafter be
adopted by the Company for the benefit of its employees generally; provided,
however, that nothing herein contained shall be deemed to require the Company to
adopt or maintain any particular plan or policy, or to preclude the Company from
amending or terminating any plan or policy. Except for his eligibility under
COBRA or as provided in any such benefit plan, the Executive acknowledges that
he will cease to be eligible for all or substantially all of such fringe
benefits following the conclusion of his full-time employment, and the Executive
will not make any claim for any such benefits for which he is not then eligible.
(e) Life Insurance. The Company shall promptly obtain and,
throughout the Initial Term of this Agreement and any Renewal Period shall
maintain and pay the premiums on, one or more policies of term life insurance
insuring the life of the Executive in the amount of $3,000,000. Upon the death
of the Executive, all proceeds of such life insurance shall be paid to the
person(s), estate or legal representatives of the Executive designated as the
beneficiaries of such life insurance policies. The Executive agrees to submit to
all physical examinations as may be required in order to obtain such life
insurance. Upon termination of this Agreement for any reason, other than the
Executive's death, the Company shall continue to pay the premium on such life
insurance policy(ies) for a minimum of six (6) months following the effective
date of
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such termination. At the Executive's request, the Company shall assign the
ownership of such life insurance policy(ies) to the Executive or his designee,
provided, that such assignee shall pay all premiums on such life insurance from
and after the date of such assignment.
(f) Expenses. Throughout the term of this Agreement, Company shall
also reimburse the Executive, upon presentment by the Executive to the Company
of appropriate receipts and vouchers therefore, for any and all actual and
reasonable out-of-pocket business expenses incurred by the Executive in
connection with the performance of his duties and responsibilities hereunder;
provided, however, that no reimbursement shall be required to be made for any
expense which is not properly deductible (in whole or in part) by the Company
for income tax purposes, or for any expense item which has not previously been
approved as and to the extent required in accordance with the Company's standard
policies and procedures in effect from time to time. To the extent that the
Executive shall travel to other cities or countries on behalf of the Company he
shall have the right to be accompanied by his spouse (if required or beneficial
for business purposes in the judgment of the Executive) and all travel, lodging
and related expenses incurred in connection with such business trips shall be
paid or reimbursed by the Company.
4. Stock Options. The Company and the Executive do hereby agree that the
Company shall issue stock options to the Executive under the Company's 1999
Stock Option, Deferred Stock and Restricted Stock Plan (the "Plan"), in
accordance with the provisions of this Section 4 and the Plan.
(a) The Executive is hereby granted options (the "Options") to
purchase an aggregate of one million two hundred thousand (1,200,000) shares
(the "Option Shares") of the common stock, no par value, of the Company (the
"Common Stock"), all upon the terms and conditions set forth in this Section 4.
(b) The exercise price of the Options to purchase all 1,200,000
Option Shares shall be eighty-one cents ($.81) per Option Share (the "Exercise
Price"); such price being the closing price of the Company's Common Stock, as
traded on the Nasdaq Stock Exchange, Inc. ("Nasdaq") on the date of execution of
this Agreement.
(c) Options to purchase an aggregate of 400,000 Option Shares shall
vest immediately as of the Effective Date of this Agreement (the "Vested
Options"). Once any of the Options becomes a Vested Option it may be exercised
by the holder at any time or from time to time, in whole or in part, prior to
the expiration of the term of such Vested Option. Each Vested Option shall (i)
have a term of five (5) years from the date such Option becomes a Vested Option,
(ii) shall be exercisable for a period of ninety (90) days following termination
of the Executive's employment with the Company, and (iii) shall contain such
other terms and conditions that are consistent with options previously granted
by the Company to other senior executives under the Plan.
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(d) Subject to earlier vesting upon the occurrence of any one of the
"Early Vesting Events" (hereinafter defined), Options to purchase the remaining
800,000 Option Shares (the "Unvested Options") shall vest, as follows:
--------------------------------------------------------------------------------
Number of Options Vesting Date of Vesting
------------------------- ---------------
--------------------------------------------------------------------------------
400,000 February 12, 2002
--------------------------------------------------------------------------------
400,000 February 12, 2003
--------------------------------------------------------------------------------
Once an Unvested Option shall vest, it shall be deemed to be a Vested
Option for all purposes of this Agreement and the Registration Rights Agreement
(as hereinafter defined).
(e) Notwithstanding the foregoing vesting schedule, upon the
occurrence of the earliest to occur of: (i) a valid termination of this
Agreement by the Executive pursuant to the provisions of Section 2(b)(ii) above,
(ii) a "Change in Control" (as hereinafter defined), or (iii) the consummation
of a "Significant Transaction," as hereinafter defined (each a "Early Vesting
Event"), all Unvested Options shall immediately become Vested Options upon
consummation of any such Early Vesting Event.
As used herein, the term "Change in Control" shall mean the sale of all or
transfer of all or substantially all of the assets or securities of the Company
to any unaffiliated third party, whether pursuant to a stock sale, asset sale,
merger, consolidation or like combination, in each case, where the power to
elect a majority of the members of the Board of Directors of the Company shall
be vested in such unaffiliated third party.
As used herein, a "Significant Transaction" shall mean the occurrence of
either or both of the following during the Initial Term of this Agreement while
the Executive shall continue to serve as Chief Executive Officer of the Company:
(i) one or a series of public or private equity and/or equity equivalent type
financings for the benefit of the Company which shall provide the Company with
gross proceeds (before customary fees, commissions and other related transaction
expenses) of not less than $25.0 million; or (ii) any acquisition by the Company
of stock or assets of any third party, or the Company consummating any merger,
joint venture, consolidation or related combination with any one or more third
parties (not otherwise constituting a Change in Control), as a result of which
the average closing price of the Company's publicly traded Common Stock, as
reported on the Nasdaq Stock Exchange, Inc. or any other national securities
exchange, for thirty (30) consecutive trading days shall be at least $5.00 per
share.
(f) Subject at all times to immediate vesting of all Unvested
Options upon the occurrence of an Early Vesting Event, in the event that this
Agreement shall be terminated prior to the expiration of the Initial Term for
any of the reasons specified in Section 2 (other than Section 2(b)(ii)) above),
all Unvested Options as at the date of such termination shall be forfeited by
the Executive and shall terminate and be deemed to have expired as at the date
of such termination.
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(g) All Options granted pursuant to this Section 4 may be exercised
by the Executive at any time or from time to time, in whole or in part, for a
period of five (5) years from the date such Options shall become Vested Options.
To the extent not fully exercised all Vested Options shall expire and be of no
further force or effect after their respective expiration dates.
(h) The Company covenants and agrees from time to time during the
Initial Term of this Agreement and thereafter it shall, within 30 days from the
date of each request by the Executive (provided that no such request shall be
made more than two times in each Anniversary Period), prepare and file with the
Securities and Exchange Commission ("SEC") and use its best efforts to cause to
be declared effective a registration statements on Form S-8 (or other applicable
form for registering securities) so as to register for resale under the
Securities Act of 1933, as amended, all Option Shares applicable to Vested
Options held by the Executive or the Solomon Family Trust.
(i) The Executive shall have the right to assign the Options and all
Option Shares to the Solomon Family Trust or any other trust, foundation or
other entity formed for the benefit of the Executive or members of his family.
5. Change in Control Payment. In the event that, in connection with a
Change in Control which results in value being received by the Company's
stockholders (in cash or fair value of stock or other securities) of $3.00 per
share or more (the "Stock Valuation"), the Executive shall elect to resign his
employment with the Company, the Company or any successor in interest to the
Company shall pay to the Executive, a cash amount (the "Change in Control
Payment") which shall be equal to the amounts set forth below, based upon the
Stock Valuation in effect as at the time of or in connection with such Change in
Control.
--------------------------------------------------------------------------------
Stock Valuation Change in Control Payment
--------------- -------------------------
--------------------------------------------------------------------------------
$3.00 per share $1,000,000
--------------------------------------------------------------------------------
$3.01 per share to $4.00 per share $1,000,000 plus $3,333 for each one cent
above $3.00 up to $4.00;
--------------------------------------------------------------------------------
$4.01 per share to $5.00 per share $1,333,333 plus $6,666 for each one cent
above $4.00 up to $5.00;
--------------------------------------------------------------------------------
$5.01 per share to $6.00 per share $2,000,000 plus $10,000 for each one cent
above $5.00 up to $6.00; and
--------------------------------------------------------------------------------
Over $6.00 per share $3,000,000.
--------------------------------------------------------------------------------
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6. Vacation, etc.
(a) During the period of his full-time employment hereunder:
(i) The Executive shall be entitled to take, from time to
time, normal and reasonable vacations with pay, consistent with the Company's
standard policies and procedures in effect from time to time, at such times as
shall be mutually convenient to the Executive and the Company, and so as not to
interfere unduly with the conduct of the business of the Company. Such vacation
time may aggregate up to six (6) weeks per year.
(ii) The Executive shall further be entitled to paid holidays,
personal days and sick days in accordance with the Company's standard policies
and procedures in effect from time to time.
7. Company Property; Confidentiality.
(a) The Executive hereby acknowledges and confirms that all ideas
and other developments or improvements conceived by the Executive, whether alone
or with others, during the term of this Agreement (whether or not during working
hours), that are within the scope of the business operations of the Company or
any of its subsidiaries or that relate to any business of any type conducted or
proposed to be conducted by the Company or any of its subsidiaries, constitute
the exclusive property of the Company or the subject subsidiary. The Executive
shall assist the Company or its subsidiaries (as applicable) as required in
order to establish, confirm and evidence the Company's or its subsidiary's
ownership of such ideas, developments and improvements, and shall execute and
deliver any and all such agreements, instruments and other documents as may be
necessary or appropriate in connection therewith.
(b) Upon termination of this Agreement under any circumstances, and
otherwise upon request of the Company or any of its subsidiaries, the Executive
shall immediately return all property of the Company and/or its subsidiaries
utilized by the Executive in rendering services hereunder, to the extent in the
Executive's possession or under his control.
(c) After the termination or expiration of his employment hereunder,
the Executive shall not divulge, furnish or make accessible to anyone (otherwise
than in the regular course of business of the Company) any confidential or
nonpublic knowledge or information with respect to the business or plans of the
Company.
8. Non-Assignability.
In light of the unique personal services to be performed by the
Executive hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Executive of this Agreement or any of
his duties, responsibilities or obligations hereunder shall be void.
9. Notices.
Any notices, requests, demands or other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been given when delivered
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personally or three (3) days after being mailed by certified mail, return
receipt requested, addressed to the party being notified at the address of such
party first set forth above, or at such other address as such party may
hereafter have designated by notice; provided, however, that any notice of
change of address shall not be effective until its receipt by the party to be
charged therewith.
10. General.
(a) Neither this Agreement nor any of the terms or conditions hereof
may be waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith. Any waiver or amendment shall
only be applicable in the specific instance, and shall not constitute or be
construed as a waiver or amendment in any other or subsequent instance. No
failure or delay on the part of either party in respect of any enforcement of
obligations hereunder shall in any manner affect such party's right to seek or
effect enforcement at any other time or in respect of any other required
performance.
(b) Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the express prior written consent of the
other party; provided, however, that the Company or any successor or assign may,
at any time and from time to time, assign this Agreement as part of the sale of
all or any substantial portion of the business of the Company.
(c) The captions and section headings used in this Agreement are for
convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be governed,
construed and controlled by and under the laws of the State of California.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original hereof, but all of which
together shall constitute one and the same instrument.
(g) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof, and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them as to such subject matter.
(h) This Agreement is intended for the sole and exclusive benefit of
the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns, and no other person
or entity shall have any right to rely on this Agreement or to claim or derive
any benefit herefrom absent the express written consent of the party to be
charged with such reliance or benefit.
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(i) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require; and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
11. Resolution of Disputes, Binding Arbitration.
(a) Whenever a claim shall arise involving the interpretation or
application of this Agreement, the complaining party shall so notify the other
party in writing. Such notice shall specify all facts known to the complaining
party giving rise to such claim or dispute and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom. If the
other party shall be duly notified of such dispute, the parties shall attempt to
settle and compromise the same.
(b) In the event that any dispute involving the interpretation or
application of this Agreement which cannot be settled or compromised, as
aforesaid, within twenty (20) days of receipt of the subject claim, either the
complaining party or the other party shall promptly thereafter submit the
dispute for final and binding arbitration to JAMS or End-Dispute before a
three-person panel of arbitrators who shall be either (i) retired federal
judges, or (ii) other persons experienced in resolving commercial disputes and
who are acceptable to both the complaining party and the other party to such
dispute (the "Arbitration"). Any such Arbitration shall be in Los Angeles,
California. The panel of arbitrators shall be selected within twenty (20) days
of submission of such dispute to Arbitration. The parties shall use their
collective best efforts to promptly schedule and conduct the hearings before
such arbitrators, with a view toward concluding such arbitration proceedings not
later than thirty (30) days from the first submission of the dispute to
arbitration. In addition to, and not in lieu of, arbitration as a means of
dispute resolution hereunder, any party hereto shall have the right to seek
specific enforcement of this Agreement, or other injunctive or equitable relief
or remedy before any court of competent jurisdiction.
(c) In connection with any Arbitration pursuant to this Section 11,
the arbitrators shall, as part of their award, allocate the fee of the
Arbitration, including all fees of the arbitrators, the cost of any transcripts,
and the parties' reasonable attorneys' fees, based upon and taking into account
the arbitrators' determination of the merits and good faith of the parties'
claims and defenses in the subject proceeding.
(d) The decision and award of the arbitrators shall be final and
binding upon the parties hereto and shall be enforceable in any court of
competent jurisdiction, including any federal or state court in the State of
California. Any process or other papers hereunder may be served by registered or
certified mail, return receipt requested, or by personal service, provided that
a reasonable time for appearance or response is allowed.
(e) Any rights established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be satisfied by the losing
party in such amount
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as shall be necessary to satisfy all applicable losses or damages sustained or
incurred by the complaining party, as determined in accordance with such
settlement and compromise, or by final nonappealable order or judgment of the
applicable judicial or arbitration panel.
(f) In connection with the defense of any third party claims for
which claims for indemnification have been made hereunder, each party will
provide reasonable access to its and the Company's books and records as and to
the extent required for the proper defense of such third party claim. Neither
party shall consent to any settlement or purport to bind any other party to any
settlement without the written consent of the other party.
(g) Notwithstanding anything to the contrary set forth above, in the
event and to the extent that the complaining party shall believe that such party
shall then have no adequate remedy at law, the complaining party shall have the
right, in addition to and not in lieu of the right to obtain compensatory or
other monetary relief, to seek and obtain injunctive relief, specific
performance or such other equitable remedies as any court of competent
jurisdiction shall deem appropriate in the circumstances.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the date first set forth above.
TEAM COMMUNICATIONS GROUP, INC.
By:___________________________________
______________________________________
XXXXXXX X. XXXXXXX
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