EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of the 20th
day of June, 2000 between Xxxxxxx Xxxxxx, an individual residing at 00 Xxxx 00xx
Xxxxxx, Xxx 0, Xxx Xxxx, XX 00000 ("Employee") and Overseas Filmgroup, Inc., a
Delaware corporation (the "Company").
WHEREAS, Employee is currently employed by Xxxxxxxx Street Productions, LLC
("Xxxxxxxx LLC"), a Delaware limited liability company with an office at 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, under an Employment Agreement dated as of
_______,1999 (the "Existing Employment Agreement");
WHEREAS, pursuant to a Securities Purchase Agreement dated the date hereof
(the "Securities Purchase Agreement"), between the Company and Xxxxxxxx LLC,
Xxxxxxxx LLC is purchasing certain securities of the Company;
WHEREAS, in order to induce the Company to enter into the Securities
Purchase Agreement, the parties hereto have agreed to terminate the Existing
Employment Agreement in its entirety and to set forth the terms and conditions
of Employee's employment with the Company following the consummation of the
transactions contemplated by the Securities Purchase Agreement;
WHEREAS, the Company desires to secure the employment of Employee, and
Employee desires to be employed by the Company, all on the terms and conditions
set forth herein; and
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated by the Securities Purchase Agreement that the parties hereto shall
have entered into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties to this Agreement hereby agree as follows:
1. EXISTING EMPLOYMENT AGREEMENT.
The Existing Employment Agreement is hereby terminated in its entirety upon
execution hereof.
2. SERVICES.
2.1 Employment. During the Term (as defined below), the Company hires
Employee to perform such services as the Company may from time to time
reasonably request consistent with Employee's position with the Company (as set
forth in Section 2.5 hereof) (the "Services").
2.2 Location. During the Term, Employee's Services shall be performed
primarily in New York City. The parties acknowledge and agree that the nature of
Employee's duties hereunder may require domestic and international travel from
time to time, including travel to Los Angeles periodically to perform services
in the Company's principal office.
2.3 Term. The term of Employee's employment under this Agreement (the
"Initial Term") shall commence on the date hereof (the "Effective Date") and,
unless sooner terminated in accordance with the provisions of this Agreement,
shall continue for a period of three (3) years thereafter; provided, that (i) if
the Initial Term is not earlier terminated and if the Company shall have
achieved the Profits Target (as defined in Section 7.15), then the Initial Term
shall automatically be extended for an additional period of two (2) years or
(ii) if the Initial Term is not earlier terminated, and regardless of whether
the Company has achieved the Profits Target, the Company may give Employee
written notice not less than six (6) months prior to the expiration of the
Initial Term that the Company elects to extend the Initial Term for an
additional period of two (2) years (in either case such additional 2-year
period, the "Extended Term"); provided, further, that the Company shall have the
right to extend the Initial Term for a period of three (3) months (the
"Determination Period") to allow the Company to determine whether it has
achieved the Profits Target. If for whatever reason the Initial Term is not
renewed for the Extended Term, then Employee shall be entitled to receive the
amount of $100,000 in cash, payable in six (6) equal monthly installments of
$16,666.67 each, with the first such payment to be made within thirty (30) days
after the termination of the Initial Term, or, if the Company has extended the
Initial Term for the Determination Period, the Determination Period. The Initial
Term, the Determination Period and the Extended Term shall be referred to herein
collectively as the "Term."
2.4 Exclusivity.
2.4.1 During the Term, the Services shall be rendered on a full-time
basis during normal working hours and all Services of Employee shall be
exclusive to the Company and its Affiliates (as defined in Section 7.15);
provided, however, Employee from time-to-time may accept employment as a
commercial director for, or on behalf of, Screen Gems Ltd. or Xxxxxxxx LLC, so
long as such employment does not materially interfere with Employee's duties
hereunder.
2.4.2 Employee agrees that during the Term and for a period of one (1)
year thereafter (the "Non-Compete Period"), Employee shall not, directly or
indirectly: (i) engage in any business for his own account which is competitive
with the businesses of the Company or its Affiliates (collectively, "Competitive
Business") so long as the Company or its Affiliates (as the case may be)
continue to engage in such business; (ii) enter the employ of, or render any
services to, any person engaged in a Competitive Business; (iii) become
interested in a Competitive Business in any capacity, including, without
limitation, as an individual, partner, shareholder, officer, director,
principal, agent, trustee or consultant; (iv) induce any customer or supplier of
the Company or the Company's Affiliates to terminate its relationship with the
Company or any of its Affiliates (as the case may be); or (v) hire, engage or
solicit (or attempt to hire, engage or solicit) any person who is, or at any
time during the one-year period preceding the solicitation was, an employee of
the Company. Notwithstanding anything to the contrary stated in this Agreement,
Employee may acquire and/or retain, as an investment, and take customary actions
(including the exercise or conversion of any securities or rights) to maintain
and preserve Employee's ownership of any one or more of the following (provided
such actions, other than passive investment activities, do not unreasonably
interfere with Employee's Services hereunder): (i) securities of any corporation
that are registered under Sections 12(b) or 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and that are publicly traded as long
as Employee is not part of any control group of such corporation and, in the
case of public corporations in competition with the Company, such securities do
not constitute more than one percent (1%) of the voting power of that public
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company; (ii) any securities of a partnership, trust, corporation or other
person so long as Employee remains a passive investor in that entity and so long
as such entity is not, directly or indirectly, in competition with the Company;
(iii) securities or other interests now owned or controlled, in whole or in
part, directly or indirectly, by Employee in any corporation or other person and
which are identified on Schedule 2.4 hereto; and (iv) securities of the Company
or any of its Affiliates. Nothing in this Agreement shall be deemed to prevent
or restrict Employee's ownership interest in the Company and its Affiliates or
Employee's ability to render charitable or community services. Any executive
producer or similar producer fees earned by Employee from a third party during
the Term in connection with the Services shall be assigned by Employee to the
Company, and the Company shall fully indemnify Employee with respect to any and
all taxes to be paid by Employee in connection therewith (i.e., Employee shall
be placed in the same after-tax position that he would have been in had such
fees not been paid to Employee). Notwithstanding the foregoing, if Employee
leaves the Company without Good Reason (as hereinafter defined ) or is
terminated by the Company for Cause (as hereinafter defined), then the
Non-Compete Period shall run from the date of termination and for a period of
eighteen (18) months thereafter. Notwithstanding the foregoing, if Employee
leaves the Company upon the expiration of the Extended Term, then the
Non-Compete Period shall cease as of the date of termination. For purposes of
this Agreement, a "Competitive Business" shall not include Xxxxxxxx LLC or
Screen Gems, Ltd.
2.4.3 Employee acknowledges and agrees that (i) his services are of a
special, unique and extraordinary character and are vital to the future success
and viability of the Company and (ii) the Company is consummating the
transactions contemplated by the Securities Purchase Agreement in reliance upon
the provisions of this Section 2.4. Employee further acknowledges that because
of the nature of the business engaged in by the Company, it is impractical and
unreasonable to put a geographic limitation on the covenants contained herein.
2.5 Power and Authority. During the Term, Employee shall be Executive Vice
President -- Creative Affairs for the Company. Employee shall report directly to
the Chief Executive Officer of the Company.
2.6 Confidentiality. Employee acknowledges that in furnishing his Services
to the Company, he will, through the Term, come into close contact with many
confidential affairs of the Company, including confidential information about
costs, profits, sales, pricing policies, operational methods, and other
confidential information not readily available to the public (the "Confidential
Materials"). In recognition of the foregoing, Employee covenants and agrees that
Employee will not intentionally disclose any Confidential Materials to anyone
outside the Company and its Affiliates during the Term and at any time
thereafter except in the course of rendering the Services, in enforcing
Employee's rights under this Agreement or under the related agreements in
connection with the investment in the Company by Xxxxxxxx LLC, or with the
Company's written consent. For purposes of this Agreement, the term
"Confidential Materials" does not include information which at the time of
disclosure has previously been made generally available to the public by any
means other than the wrongful act of Employee in violation of this Section 2.6.
Employee may use and disclose Confidential Materials to the extent necessary to
assert any right or defend against any claim pertaining to Confidential
Materials or their use, to the extent necessary to comply with any applicable
statute, constitution, treaty, rule, regulation, ordinance or order, whether of
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the United States, any state thereof, or any other jurisdiction applicable to
Employee after giving prior notice to the Company (time permitting), or if
Employee receives a request to disclose all or any part of the information
contained in the Confidential Materials under the terms of a subpoena, order,
civil investigative demand or similar process issued by a court of competent
jurisdiction or by a governmental body or agency, whether of the United States
or any state thereof, or any other jurisdiction applicable to Employee after
giving prior notice to the Company (time permitting).
2.7 Injunctive Relief. If Employee breaches, or threatens to commit a
breach of, any of the provisions of Section 2.4 or 2.6 of this Agreement, the
Company shall have the right to have such provisions specifically enforced by
any court having jurisdiction, it being acknowledged and agreed that no adequate
remedy of law would be available for any such breach or threatened breach. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company.
2.8 Indemnification. The Company shall at all times indemnify, defend and
hold harmless Employee to the fullest extent permitted by applicable law,
including without limitation the General Corporation Law of the State of
Delaware, for all actions taken by Employee in good faith, on behalf of the
Company, so long as such actions are not in violation of law or Company policy,
do not constitute "Cause" for termination pursuant to Section 5.2 hereof and are
not a breach by Employee of the representation and warranty made by Employee in
Section 7.14 hereof. Without limiting the foregoing, Employee shall be entitled
to the benefit of the indemnification provisions contained on the date hereof in
the Bylaws of the Company and any applicable Bylaws of any Affiliate.
3. COMPENSATION.
As compensation and consideration for the Services provided by Employee
during the Term pursuant to this Agreement, the Company agrees to pay to
Employee the compensation set forth in this Section 3.
3.1 Fixed Annual Compensation. The Company shall pay to Employee salary
("Fixed Annual Compensation") at the rate of $60,000 per annum. Fixed Annual
Compensation payable to Employee by the Company hereunder shall be paid at such
times and in such amounts as the Company may designate in accordance with the
Company's usual salary practices, but in no event less than once monthly.
3.2 Annual Bonus. During each Employment Year (as defined in Section 7.15)
during the Term, Employee shall be entitled to a guaranteed bonus of $25,000
(the "Annual Bonus"); provided, that Pre-Tax Profits of the Company exceed
$500,000. The Annual Bonus shall be payable in equal monthly installments during
the applicable Employment Year.
3.3 Profit-Based Bonus. Employee shall also be entitled to such additional
bonus (the "Profit-Based Bonus"), which shall be established for Employee at the
beginning of each Employment Year by the Company's Board of Directors based on
the Company's achieving certain profit targets.
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4. EXPENSES.
4.1 Vacation. During the Term, Employee shall be entitled for each
Employment Year to an aggregate of four (4) weeks of vacation with full pay.
Employee shall accrue vacation in accordance with the Company's policies with
respect thereto applicable to the Company's employees generally.
4.2 Business Expense Reimbursement. Employee shall be entitled to
reimbursement of all reasonable, ordinary business or entertainment expenses
incurred by Employee during the Term in the performance of Employee's Services
for which Employee makes an adequate accounting to the Company. Without limiting
the foregoing, Employee shall be entitled to reimbursement for business class
air travel for all trips (domestic and foreign) Employee makes in connection
with Employee's Services to the Company or its Affiliates; it being understood
that if no business class fare exists for a particular destination, Employee
shall be entitled to reimbursement for first class air travel. The Company may
in its discretion use frequent flyer miles or other similar means to upgrade
Employee's air travel to business class (or, if necessary first class), in which
event Employee's reimbursement shall be limited to the cost of the ticket prior
to the upgrade. The determination of the adequacy of the accounting of the
foregoing expenses shall be within the reasonable discretion of the Company's
independent certified accountants taking into consideration the substantiation
requirements of the Internal Revenue Code of 1986, as amended (the "Code").
4.3 Directors and Officers Liability Insurance. Employee shall be entitled
to the protection of any insurance policies the Company or any of its Affiliates
may elect to maintain generally for the benefit of its directors and officers
against all costs, charges and expenses whatsoever incurred or sustained by
Employee or his legal representatives in connection with any action, suit or
proceeding to which Employee (or his legal representatives or other successors)
may be made a party by reason of Employee being or having been a director or
officer of the Company or any of its Affiliates or Employee serving or having
served any other enterprises as a director, officer or employee at the request
of the Company. The Company shall provide and maintain at all times during the
Term and for a period of six years thereafter such a directors and officers
insurance policy covering Employee and his legal representatives, issued by a
reputable and financially-sound insurance carrier of national standing which is
acceptable to Employee, and providing coverage in the amount of at least
$5,000,000.
4.4 General. Employee shall be entitled to participate in any
profit-sharing, pension, health, insurance or other plans, benefits or policies
(not duplicative of the benefits provided hereunder) available to the employees
of the Company or its Affiliates on the terms generally applicable to such
employees.
5. TERMINATION.
If any of the events described in this Section 5 shall occur, Employee
shall be entitled to the benefits provided in Section 6 hereof upon the
subsequent termination of Employee's employment during the Term. As used in this
Agreement, "Date of Termination" means (i) if employment is terminated for
Disability (as defined in Section 5.1 below), thirty (30) days after Notice of
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Termination is given (provided that Employee shall not have returned to the
performance of his duties on a full-time basis during such thirty (30) day
period), (ii) if employment is terminated by reason of Employee's death, the
date of death and (iii) if employment is terminated for any other reason, the
date specified in the Notice of Termination. "Notice of Termination" means a
written notice that shall indicate the specific termination provision in this
Agreement relied upon and shall, except in the case of a termination pursuant to
Section 5.5, set forth in reasonable detail the basis for termination of
employment under the provision so indicated.
5.1 Employee Disability. If, as a result of Employee's incapacity because
of physical or mental illness, Employee shall have been absent from his duties
with the Company for four (4) months or for more than an aggregate of six (6)
months in any Employment Year, and within thirty days after written Notice of
Termination is given he shall not have returned to the full-time performance of
his duties, Employee's employment with the Company shall automatically be
terminated for "Disability" on the Date of Termination.
5.2 Termination by the Company for "Cause". The Company may terminate
Employee's employment for "Cause" (as hereinafter defined) upon delivery of a
Notice of Termination to Employee. For purposes hereof, "Cause" shall mean: (i)
Employee's material failure to comply with the reasonable directives of the
Company which are consistent with his position and responsibilities after
written notice that such failure will be deemed to be "Cause" and a reasonable
opportunity to cure (other than any such failure resulting from Employee's
incapacity because of physical or mental illness or from matters constituting
Good Reason (as defined below)); (ii) dishonesty in connection with the Company,
its Affiliates or their respective clients, including but not limited to
embezzlement or misappropriation of funds; (iii) commission of any willful or
intentional act which materially injures the reputation, business or business
relationships of the Company and/or any of its Affiliates; (iv) Employee's
excessive drinking of alcohol or use of illegal drugs that impairs his ability
to perform his duties under this Agreement; (v) conviction of, or entering a
plea of guilty or no contest to, a felony or any crime involving moral
turpitude, fraud, dishonesty or theft; (vi) engaging in any act which is a
violation of any law or regulation protecting rights of employees or a violation
of any material Company policy or operating procedure; or (vii) a continued
breach by Employee of any material provision of this Agreement (not covered by
any of the foregoing clauses (i) through (vi)) after written notice that such
breach will be deemed "Cause" and thirty (30) days (or such lesser period as the
exigencies of the situation may require) to cure (other than any such failure
resulting from Employee's incapacity because of physical or mental illness or
from matters constituting Good Reason).
5.3 Death. In the case of Employee's death, Employee's employment shall
terminate as of the date of Employee's death.
5.4 Employee's Termination for "Good Reason". Provided that Employee is not
otherwise in breach of this Agreement, Employee shall be entitled to terminate
his employment for Good Reason at any time during the Term by delivering a
Notice of Termination to the Company not more than ten (10) days after an event
which Employee believes constitutes Good Reason. The Company shall have thirty
(30) days after receipt of the Notice of Termination to cure (if curable) the
event specified in the Notice of Termination.
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For purposes of this Agreement, "Good Reason" shall mean the commission or
omission of any of the following actions:
(A) a substantial and material diminution of the position, authority
or Services of Employee, as set forth in Sections 2.1 and 2.5 hereof;
(B) a reduction by the Company in the Fixed Annual Compensation set
forth in Section 3.1, or a reduction in the Annual Bonus set forth in
Section 3.2;
(C) any purported termination of Employee's employment that is not
effected pursuant to a Notice of Termination ( and for purposes of
this Agreement, no such purported termination shall be effective);
(D) a material breach by the Company under any of the related
agreements to which the Company is a party pursuant to the investment
in the Company by Xxxxxxxx LLC; and
(E) the acquisition (after the date hereof) of the beneficial
ownership of a majority of the Company's voting securities or
substantially all of the assets of the Company by a single person or
entity or a group of affiliated persons or entities.
5.5 Other Termination by the Company. Notwithstanding any other provision
of this Agreement, the Company shall also have the right to terminate Employee's
employment at any time for whatever reason it deems appropriate by giving
Employee a Notice of Termination.
6. COMPENSATION UPON TERMINATION.
6.1 Death of Employee. Upon the death of Employee, the Company shall pay to
Employee's estate (i) the Fixed Annual Compensation to the end of the month in
which such death occurs, (ii) an amount equal to the Annual Bonus prorated to
correspond to the portion of the Employment Year that shall have expired as of
the end of the month in which such death occurs, (iii) the Profit-Based Bonus
(if earned) prorated to correspond to the portion of the Employment Year that
shall have expired as of the end of the month in which such death occurs
(payable after determination of the Company's profits for the applicable year)
and (iv) any unreimbursed expenses through the Date of Termination payable
pursuant to Section 4.2 hereof. Rights and benefits of Employee under any
employee benefit plans and programs of the Company will be determined in
accordance with the terms and provisions of such plans and programs. Upon such
payments, the Company shall have no further liability or obligation hereunder to
the deceased Employee's estate, his executors or administrators, his heirs or
assigns or any other person claiming under or through him.
6.2 Disability of Employee. Upon the termination of Employee's employment
as a result of his Disability, Employee shall be entitled to receive (i) the
Fixed Annual Compensation to the Date of Termination, (ii) an amount equal to
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the Annual Bonus prorated to correspond to the portion of the Employment Year
that shall have expired as of the Date of Termination, (iii) an amount equal to
the Profit-Based Bonus (if earned) prorated to correspond to the portion of the
Employment Year that shall have expired as of the Date of Termination (payable
after determination of the Company's profits for the applicable year) and (iv)
any unreimbursed expenses through the Date of Termination payable pursuant to
Section 4.2 hereof. Rights and benefits of Employee under any employee benefit
plans and programs of the Company will be determined in accordance with the
terms and provisions of such plans and programs.
6.3 Termination for Cause. If Employee's employment shall be terminated for
Cause, the Company shall pay to Employee (i) the Fixed Annual Compensation to
the Date of Termination and (ii) any unreimbursed expenses through the Date of
Termination payable pursuant to Section 4.2.
6.4 Termination Other Than for Cause, Death or Disability.
6.4.1 If Employee's employment shall be terminated by the Company
other than for Cause, Death or Disability, or by Employee for Good Reason, then
the Company shall make a severance payment (the "Severance Payment") to Employee
in the amount equal to (i) the Fixed Annual Compensation (including the
Non-Renewal Payment under Section 2.3, in the event Company has not extended the
Initial Term at the time of Employee's termination) that would have been paid to
Employee during the Severance Period (as hereinafter defined) if no termination
had occurred and (ii) the Annual Bonus that would have been paid to Employee
during the Severance Period if no termination had occurred. The "Severance
Period" shall mean the period commencing on the Date of Termination and ending
on the date the Initial Term would have otherwise expired or, if this Agreement
has been renewed for the Extended Term, the date the Extended Term would have
otherwise expired. The Severance Payment shall be reduced and offset by any
amounts earned by Employee from any other employment or work of any kind
obtained by Employee during the Severance Period. The Severance Payment shall be
paid to Employee in three (3) equal installments with the first payment being
made on the Date of Termination, the second payment being made after one-half of
the Severance Period has expired and the third payment being made at the end of
the Severance Period. In addition, the Company shall reimburse Employee for any
unreimbursed expenses through the Date of Termination payable pursuant to
Section 4.2. Rights and benefits of Employee under any employee benefit plans
and programs of the Company will be determined in accordance with the terms and
provisions of such plans and programs. The Company's failure to renew Employee's
employment for the Extended Term shall not be deemed a termination of Employee's
employment for purposes of this Section 6.4.1.
6.4.2 In the event that this Agreement expires by its terms three (3)
years from the date hereof, and the Initial Term is not extended, the Company
shall have no obligation to Employee (except as specifically set forth in
Section 2.3), and Employee shall have no obligation to the Company, (except as
specifically set forth in Sections 2.4 and 2.6) under this Agreement.
7. GENERAL.
7.1 Applicable Law Controls. Nothing contained in this Agreement shall be
construed to require the commission of any act contrary to law and wherever
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there is any conflict between the provisions of this Agreement and any material
statute, law, ordinance or regulation contrary to which the parties have no
legal right to contract, then the latter shall prevail; provided, however, that
in any such event the provisions of this Agreement so affected shall be
curtailed and limited only to the extent necessary to bring them within
applicable legal requirements, and provided further that if any obligation to
pay the Fixed Annual Compensation, Annual Bonus or any other amount due Employee
hereunder is so curtailed, then such compensation or amount shall be paid as
soon thereafter, either during or subsequent to the Term, as permissible.
7.2 Waiver/Estoppel. Any party hereto may waive the benefit of any term,
condition or covenant in this Agreement or any right or remedy at law or in
equity to which any party may be entitled, but only by an instrument in writing
signed by the parties to be charged. No estoppel may be raised against any party
except to the extent the other parties rely on an instrument in writing, signed
by the party to be charged, specifically reciting that the other parties may
rely thereon. The parties' rights and remedies under and pursuant to this
Agreement or at law or in equity shall be cumulative and the exercise of any
rights or remedies under one provision hereof or rights or remedies at law or in
equity shall not be deemed an election of remedies; and any waiver or
forbearance of any breach of this Agreement or remedy granted hereunder or at
law or in equity shall not be deemed a waiver of any preceding or succeeding
breach of the same or any other provision hereof or of the opportunity to
exercise such right or remedy or any other right or remedy, whether or not
similar, at any preceding or subsequent time.
7.3 Attorneys' Fees and Costs. In any action, suit or proceeding brought by
any party hereto with respect to this Agreement, its subject matter or the
actions, statements or conduct of any or each of the parties in the negotiation,
execution or performance of this Agreement, the prevailing party shall be
entitled to recover from the other parties all reasonable costs and expenses
incurred in connection therewith, including but not limited to attorneys' fees,
attorneys' costs and court costs.
7.4 Notices. Any notice that the Company is required or may desire to give
to Employee hereunder shall be in writing and may be served by delivering it to
Employee, or by sending it to Employee by certified mail, return receipt
requested (effective five days after mailing) or overnight delivery of the same
by delivery service capable of providing verified receipt (effective the next
business day), or facsimile (effective twenty-four hours after receipt is
confirmed by person or machine), at the address set forth below, or such
substitute address as Employee may from time to time designate by notice to the
Company. Any notice that Employee is required or may desire to serve upon the
Company hereunder shall be in writing and may be served by delivering it
personally or by sending it certified mail, return receipt requested or
overnight delivery, or facsimile (with receipt confirmed by person or machine)
to the address set forth below, or such other substitute address as the Company
may from time to time designate by notice to Employee. Such notices by Employee
shall be effective at the same times as specified in this Section 7.4 for
notices by the Company.
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The Company: Overseas Filmgroup, Inc.
0000 Xxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Fax: (000) 000-0000
Employee: Xxxxxxx Xxxxxx
00 Xxxx 00xx Xxxxxx, Xxx 0
Xxx Xxxx, XX 00000
With a copy to: Frankfurt, Xxxxxx, Xxxxx & Xxxx, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
7.5 Governing Law. This Agreement shall be governed by, construed and
enforced and the legality and validity of each term and condition shall be
determined in accordance with the internal, substantive laws of the State of
Delaware applicable to agreements fully executed and performed entirely in
Delaware.
7.6 Captions. The paragraph headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
7.7 No Joint Venture. Nothing herein contained shall constitute a
partnership between or joint venture by the parties hereto.
7.8 Assignability. This Agreement, and the rights and obligations of
Employee hereunder, may not be assigned by Employee, except that Employee may
assign his rights to receive compensation hereunder to any person or entity
affiliated with Employee, to trusts for the benefit of the family of Employee,
or any charitable trusts, charities or non-profit organizations. The Company may
assign its rights, together with its obligations hereunder, in connection with
any sale, transfer or other disposition of all or substantially all of its
business and assets; provided, however, that any such assignee agrees to be
bound by the provisions of this Agreement. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties'
successors-in-interest, heirs, legal representatives and permitted assigns.
7.9 Modification/Entire Agreement. This Agreement may not be altered,
modified or amended except by an instrument in writing signed by all of the
parties hereto. No person, whether or not an officer, agent, employee or
representative of any party, has made or has any authority to make for or on
behalf of that party any agreement, representation, warranty, statement,
promise, arrangement or understanding not expressly set forth in this Agreement
or in any other document executed by the parties concurrently herewith ("Parol
Agreements"). This Agreement and all other documents executed by the parties
concurrently herewith constitute the entire agreement between the parties and
supersede all express or implied, prior or concurrent, Parol Agreements and
prior written agreements with respect to the subject matter hereof. The parties
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acknowledge that in entering into this Agreement, they have not relied and will
not in any way rely upon any Parol Agreements.
7.10 Severability. If any term, provision or covenant in this Agreement is
held to be invalid, void or unenforceable, (i) the remainder of the terms,
provisions and covenants in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and (ii) to the
fullest extent possible, the provisions of this Agreement (including, without
limitation, all portions of any section of this Agreement containing any such
provision held to be invalid, void or unenforceable that are not themselves
invalid, void or unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, void or unenforceable.
7.11 Arbitration. Except as otherwise set forth in Section 2.7 hereof, if
any dispute arises between Employee and the Company concerning the application,
validity, construction, or interpretation of this Agreement that Employee and
the Company are unable to resolve themselves, the parties agree that arbitration
by a single arbitrator experienced in employment law in accordance with the
then-applicable rules of the American Arbitration Association shall provide the
exclusive remedy for resolving any such dispute, regardless of its nature. Any
arbitration shall take place in New York, New York in such location as is agreed
to by the Company and Employee. If the parties cannot agree upon a location for
the arbitration, the arbitrator shall determine the location within New York,
New York. The Company may enforce Employee's obligations under Sections 2.4 and
2.6 hereof by an action for injunctive relief and damages in a court of
competent jurisdiction at any time prior or subsequent to the commencement of an
arbitration proceeding as herein provided. In such event, each of the parties
hereto irrevocably consents to the exclusive jurisdiction and venue of the
federal and state courts located within New York County, New York and courts
with appellate jurisdiction therefrom, in connection with any such matter.
7.12 Contractual Nomenclature. All references herein to "Dollars" or "$"
shall mean Dollars of the United States of America, its legal tender for all
debts public and private. Wherever used herein and to the extent appropriate,
the masculine, feminine or neuter gender shall include the other two genders,
the singular shall include the plural, and the plural shall include the
singular.
7.13 Publicity. Except as agreed pursuant to the Securities Purchase
Agreement, neither party shall issue any press release or announcement of or
relating to the execution of, or any terms, provisions, or conditions contained
in, this Agreement without the other party's prior approval of the content and
timing of any such announcement or announcements.
7.14 Representation and Warranty. Employee hereby warrants and represents
to the Company that he is free to enter into the Agreement and to perform all of
his duties and obligations hereunder and otherwise to the Company without
violating any existing contractual or other obligations or the rights of any
third parties.
7.15 Definitions. As used in this Agreement, the following terms shall have
the following meanings:
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(A) "Affiliate" shall mean, as to any person, any other person
controlled by or under common control with (or, where applicable, controlling),
directly or indirectly, such person.
(B) "person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof, or any other entity.
(C) "Profits Target" means either (i) during any two of the three
years of the Initial Term, the Company's Pre-Tax Profits for each such year
exceed $500,000 or (ii) the Company's average Pre-Tax Profits for the three
years of the Initial Term exceed $500,000.
(D) "Employment Year" shall mean each twelve month period during the
Term commencing on June 20, 2000, and ending on June 19, 2001, of the
following year.
(E) "Pre-Tax Profits" shall mean the profit (loss) of the Company for
the applicable period prior to payment of or provision for federal, state or
local income taxes for such period determined in accordance with generally
accepted accounting principles in the United States, consistently applied, as
reflected in the audited financial statements of the Company for the applicable
period.
7.16 Life Insurance. The Company shall have the right to obtain, at its
sole cost and expense, one or more insurance policies insuring the life of
Employee for the benefit of the Company. Employee agrees to cooperate fully with
the Company and to take such actions as the Company may reasonable require in
order to obtain such insurance, including without limitation, signing necessary
documentation and submitting to required medical exams.
7.17 Third Party Rights. The parties acknowledge and agree that Xxxxxxxx
LLC (and its successors and assigns) is a third party beneficiary of the
provisions of Section 2.4 hereof and shall have the right to take any and all
actions as may be necessary to protect its rights in the event of any breach (or
threatened breach) of Section 2.4 hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OVERSEAS FILMGROUP, INC.
/s/ Xxxxxx X. Xxxxxx
By:___________________________
Name: Xxxxxx X. Xxxxxx
Title: President
/s/ Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxxxx
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