MCY MUSIC WORLD, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of August 22, 2000 (this
"Agreement"), by and between MCY Music World, Inc., a Delaware corporation (the
"Company"), and Xxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Executive and the Executive
desires to gain employment with the Company, all upon the terms and provisions,
and subject to the conditions, set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt, and legal adequacy of which is hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. POSITION AND DUTIES.
(a) The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company as the President of the
Music Division of the Company. The Executive shall report directly to the Chief
Executive Officer of the Company or to the President of the Company, if
designated by the Board of Directors of the Company and to the Board of
Directors of the Company.
(b) The Executive shall have responsibility to oversee and
manage the music label and other operations of the Music Division of the
Company. The Executive shall also perform such duties and responsibilities as
may be assigned to him by the Chief Executive Officer of the Company, the
President of the Company, if designated by the Board of Directors of the Company
or the Board of Directors of the Company; provided that such other duties and
responsibilities are of a type generally consistent with the Executive's
position in the Company.
(c) The Executive shall devote all of his business time,
labor, skill and energy to the business and affairs of the Company and to
performing his duties and responsibilities to the Company as set forth in
Section 1(b) hereof; provided, however, that the Executive may engage in certain
activities as more particularly set forth on Schedule A attached hereto (the
"Permitted Activities"); provided, further, however, that engaging in such
activities does not materially interfere with the Executive's performance of his
duties and responsibilities to the Company; and further, provided that after
October 31, 2000 the Executive shall no longer, directly or indirectly, engages
in those activities. The Executive shall perform the Executive's duties and
responsibilities to the Company diligently, competently, faithfully and to the
best of
his ability. The Executive shall direct all business opportunities that
relate directly or indirectly to the business, activities and/or operations of
the Company or its affiliates to the Company.
(d) In order to induce the Company to enter into this
Agreement, the Executive represents and warrants to the Company that the
Executive has the right to negotiate and enter into this Agreement, and the
Executive's execution, delivery and performance of this Agreement does not and
will not breach, violate, interfere or conflict with any other agreement,
covenant not to compete, option, right of first refusal or other existing
business relationship or any judgment or order, in each case, to which the
Executive is a party or which is binding upon the Executive or to which the
Executive is otherwise subject. The Executive acknowledges that this
representation and warranty is a material inducement to the Company entering
into this Agreement and in the event the Executive breaches this representation
and warranty, the Executive agrees to indemnify and hold harmless the Company
and its subsidiaries and affiliates from any and all claims, actions, losses,
damages, liabilities, costs and expenses (including, but not limited to,
reasonable attorneys' fees and expenses) (collectively, "Losses") incurred by
the Company or any such indemnified party as a result of or relating to any such
breach.
2. TERM. The period of the Executive's employment with the Company as
provided for in Section 1 hereof shall be for a term of three (3) years,
commencing on August 22, 2000 and terminating on August 21, 2003, subject to
earlier termination as provided in Section 9 hereof (the "Employment Term").
3. COMPENSATION.
(a) Base Salary. During the Employment Term, as full
consideration for the Executive's services hereunder, the Company shall pay to
the Executive a base salary at an annual rate of $300,000 (the "Base Salary").
The Base Salary shall be payable in equal installments in conformity with the
Company's normal payroll practices from time to time in effect, but in any event
not less than twice per month.
(b) Bonus. The Executive shall receive bonus compensation of
$100,000 with respect to each twelve (12) month period during the Employment
Period that the Executive remains with the Company. The bonus shall be paid in
arrears commencing with the first anniversary of this Agreement on August 22,
2001.
4. MCY STOCK OPTIONS.
(a) Upon the execution and delivery of this Agreement by the
Executive and the Company, XXX.xxx, Inc., a Delaware corporation ("MCY"), shall
grant to the Executive options (the "Options") to purchase 1,000,000 shares of
MCY's common stock, par value $0.001 per share (the "Common Stock"), at an
exercise price of $6.00 per share, pursuant to the terms and provisions of the
Stock Option Agreement attached hereto as Exhibit A (the "Stock Option
Agreement") and the Company's Amended and Restated 1999 Stock Incentive Plan
(the "Plan"). The Options shall vest ratably, on a monthly basis, over
thirty-six (36) months, for each full month of employment during the Employment
Term. The Options shall have a term of five (5) years from the date of grant.
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(b) All unvested Options and any vested but unexercised
Options shall automatically become null and void and shall automatically
terminate upon the termination of the Executive's employment hereunder for Cause
(as such term is hereinafter defined). Upon the termination of the Executive's
employment with the Company upon death, due to a Disability Occurrence (as such
term is hereinafter defined), by the Company Without Cause (as such term is
hereinafter defined) or by the Executive for Good Reason (as such term is
hereinafter defined), all unvested Options shall automatically become null and
void and shall terminate and all vested and unexercised Options shall be
exercisable in accordance with the Stock Option Agreement and Plan. Upon the
occurrence of a Change of Control (as such term is hereinafter defined) all
unvested Options shall become fully vested and exercisable for a period of one
(1) year from the date of the Change of Control. For purposes hereof, the term
"Change of Control" shall have the same meaning herein as is ascribed to such
term in the Plan.
(c) Should there be any conflict between the terms and
provisions of this Agreement and those of the Stock Option Agreement, the terms
and provisions of the Stock Option Agreement shall govern and be controlling.
5. EMPLOYEE BENEFITS.
(a) During the period of the Executive's employment with the
Company hereunder, the Executive shall be entitled to receive such other
benefits generally made available by the Company to its senior executives and
key management employees as a group in accordance with the plans and policies of
the Company from time to time in effect, including, without limitation, medical
and dental insurance, disability and life insurance, dental insurance,
participation in retirement, savings (in each case to the extent maintained by
the Company), subject to, and on a basis consistent with, the terms, conditions,
and overall administration of such plans and policies.
(b) The Executive shall be entitled to paid vacation time and
holidays per annum as is consistent with his position with the Company and the
performance of his duties hereunder and in accordance with the Company's
policies for vacation and holidays from time to time in effect; provided that
the Executive shall not be able to take vacation time at any time that would
materially interfere with the business, activities or operations of the Company
and that the Executive will coordinate the timing of his vacation with the
Company's Chief Executive Officer or the Company's President if the Executive's
direct reporting responsibility is to the Company's President. The Executive
shall be entitled to two (2) weeks of vacation for each twelve (12) months of
employment.
(c) The Company shall promptly reimburse the Executive for all
reasonable and necessary business expenses incurred by the Executive in
accordance with the performance of his duties and responsibilities hereunder,
upon the presentation by the Executive of appropriate evidence and documentation
of the incurrence thereof in accordance with the Company's policies from time to
time in effect.
(d) The Executive shall be entitled to first class travel
accommodations in connection with all proper business travel taken in connection
with the performance of the
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Executive's duties and obligations hereunder. In that regard, for all air travel
of greater than one and one-half (1-1/2) hours, the Executive shall be entitled
to first class air fare.
(e) The Company shall lease an automobile for the Executive's
use during the Employment Term, which shall be a luxury class automobile
comparable to other senior executives of the Company. The Company shall also pay
the costs of a garage in New York, New York up to a monthly cost of $500.
6. INSURANCE. The Company shall have the right to apply for and take
out, in the Company's own name or otherwise, at the Company's expense, life,
health, accident, or other insurance covering the Executive, in any amount the
Company deems necessary to protect the Company's interest hereunder, and the
Executive shall have no right, title or interest in or to any such insurance or
the proceeds thereof. The Executive shall assist the Company in obtaining such
insurance by submitting to usual and customary medical and other examinations
(which shall be conducted by the Executive's physician if the Executive's
physician is acceptable to the applicable insurance company) and by signing such
applications, statements and other instruments as may be reasonably required by
the insurance company engaged by the Company for purposes of obtaining such
insurance coverage.
7. DEDUCTIONS AND WITHHOLDINGS. All amounts payable or which become
payable to the Executive under any provision of this Agreement shall be subject
to such deductions and withholdings as is required by applicable law.
8. INDEMNIFICATION. The Company shall defend, indemnify and hold
harmless the Executive in his capacity as an officer of the Company to the
fullest extent permitted by applicable law against any Losses incurred by the
Executive in connection with any action, suit or proceeding to which the
Executive may be made a party be reason of his being or having been an officer
of the Company, or because of actions taken by the Executive which were believed
by the Executive to be in the best interests of the Company and not in violation
of applicable law, and the Executive shall be entitled to be covered by any
directors' and officers' liability insurance policies which the Company
maintains for the benefit of its directors and officers, subject to the
limitations of any such policies. The Company represents to the Executive that
its current directors and officers liability insurance policy is in effect. The
Company shall have the right to assume, with legal counsel of its choice, who
shall be reasonably acceptable to the Executive, the defense of the Executive in
any such action, suit or proceeding for which the Company is providing
indemnification to the Executive. Should the Executive determine to employ
separate legal counsel in any such action, suit or proceeding, any costs and
expenses of such separate legal counsel shall be the sole responsibility of the
Executive. If the Company does not assume the defense of any such action, suit
or other proceeding, the Company shall, upon request of the Executive, promptly
advance or pay any amount for costs or expenses (including, without limitation,
the reasonable fees and expenses of counsel retained by the Executive) incurred
by the Executive in connection with any such action, suit or proceeding;
provided that the Executive provides the Company with reasonable assurances
and/or security that the Executive will be able to repay the amounts advanced if
it is ultimately determined by the Company that the Executive was not entitled
to indemnification.
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9. TERMINATION.
(a) Termination by the Company Upon Death. The Executive's
employment under this Agreement shall terminate immediately upon the Executive's
death.
(b) Termination by the Company Upon Disability. If the
Executive shall be unable to perform his material duties and material
responsibilities hereunder by reason of illness or other incapacity, his failure
so to perform his duties will not be grounds for terminating his employment for
Cause by the Company; provided, however, should the period of such incapacity
exceed three (3) months, or 50% or more of the normal working days during any
consecutive six (6) month period (a "Disability Occurrence"), then the Company
may terminate the Executive's employment hereunder due to the Disability
Occurrence.
(c) Termination by the Company For Cause. The Company shall
have the right to terminate the Executive's employment hereunder at any time for
Cause. For purposes of this Agreement, the term "Cause" shall mean any of the
following: (i) the failure of the Executive to substantially perform his
material duties or material obligations hereunder or the breach by the Executive
of any of the terms or provisions of this Agreement or any other written
agreement between the Executive, on the one hand, and the Company or MCY, on the
other hand, on the part of the Executive to be observed or performed, which
failure or breach is not cured within thirty (30) days after receipt of written
notice thereof by the Executive from the Company; (ii) the Executive's knowing
and willful neglect or refusal to attend to the Executive's material duties and
responsibilities under this Agreement, which conduct is not cured within thirty
(30) days after receipt of written notice thereof by the Executive from the
Company; (iii) any criminal liability of the Company which was substantially
caused by the conduct of the Executive and not at the Company's direction; (iv)
the Executive's conviction by, or entry of a plea of guilty or nolo contendere
in, a court of competent jurisdiction of an act of fraud, embezzlement or
willful breach of fiduciary duty to the Company, or any crime constituting a
felony; (v) the Executive's chronic addiction to drugs, alcohol or any
controlled substance which materially interferes with the performance of his
duties hereunder; (vi) the usurpation by the Executive of any corporate
opportunity of the Company or MCY or any of their respective subsidiaries or
affiliates; or (vii) the commission of an act of moral turpitude, which in the
judgment of the Board of Directors of the Company, as evidenced by a resolution
of the majority of the members of the Board of Directors could have a material
and adverse effect on the business, operations or reputation of the Company.
(d) Termination by the Company Without Cause. The Company may
terminate the Executive's employment hereunder Without Cause at any time during
the Employment Term. For purposes of this Agreement, the term "Without Cause"
shall mean the termination of the Executive's employment by the Company
hereunder for a reason or for no reason, which is not a termination pursuant to
Sections 9(a), 9(b) or 9(c) hereof.
(e) Termination by the Executive for Good Reason. The
Executive shall have the right, upon not less than thirty (30) days' prior
written notice to the Company to terminate the Executive's employment with the
Company for "Good Reason". For purposes hereof, the term "Good Reason" shall
mean (i) a substantial and material change to (other than in connection with a
general corporate restructuring or reorganization) or reduction in the duties or
responsibilities
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of the Executive such that the responsibilities of the Executive are no longer
commensurate with the Executive's duties with the Company as set forth herein,
or (ii) the occurrence of a change in the Executive's office from that of
President of the Music Division of the Company which is not concurred in by the
Executive within one (1) month of its occurrence (other than in connection with
a general corporate restructuring or reorganization).
10. EFFECT OF TERMINATION.
(a) Upon termination of the Executive's employment hereunder
pursuant to Sections 9(a), 9(b) or 9(c) hereof, the Executive (or his estate or
legal representative in the case of death or disability) shall be entitled to
receive the following: (i) all accrued but unpaid Base Salary through the date
of such termination; (ii) except in the case of termination of the Executive's
employment for Cause, the Bonus payable in respect of the fiscal year in which
the Executive's employment was terminated multiplied by a fraction, the
numerator of which is the number of days that the Executive was employed during
such year and the denominator of which is 365; (iii) payment for any accrued but
unused vacation time; and (iv) any payments under any applicable life (other
than key man life insurance) or disability insurance plans that are properly
payable that have not been paid.
(b) Upon termination of the Executive's employment hereunder
pursuant to Sections 9(d) or 9(e), the Executive shall be entitled to receive
the following: (i) all accrued but unpaid Base Salary through the date of such
termination; (ii) the Bonus payable in respect of the fiscal year in which the
Executive's employment was terminated multiplied by a fraction, the numerator of
which is the number of days that the Executive was employed during such year and
the denominator of which is 365; (iii) payment for any accrued but unused
vacation time; and (iv) in the case of a termination pursuant to Sections 9(d)
or 9(e), a severance payment from the Company, which shall be payable within ten
(10) Business Days (as such term is hereinafter defined) of such termination,
equal to six (6) months of the Executive's Base Salary if such termination
occurs within the first six (6) months following the date of this Agreement or
the lesser of one (1) year or the remainder of the Employment Term of the
Executive's Base Salary (such severance payment shall be due regardless of
whether or not the Executive engages in or seeks other employment following the
date of such termination).
(c) In addition to the amounts payable to the Executive
pursuant to Sections 10(a) or 10(b), upon termination of the Executive's
employment for any reason whatsoever, the Company shall reimburse the Executive
for all accrued and unpaid business expenses properly incurred and payable to
the Executive pursuant to Section 5(c) hereof.
11. RESTRICTIONS RESPECTING CONFIDENTIAL INFORMATION, COMPETING
BUSINESSES, ETC.
(a) The Executive acknowledges and agrees that by virtue of
the Executive's position and involvement with the business and affairs of the
Company, the Executive will develop substantial expertise and knowledge with
respect to all aspects of the business, affairs and operations of the Company
and MCY and will have access to significant aspects of the business and
operations of the Company and MCY and to Confidential and Proprietary
Information (as such term is hereinafter defined). The Executive acknowledges
and agrees that the Company will be damaged if the Executive were to breach any
of the provisions of this
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Section 11 or if the Executive were to disclose or make unauthorized use of any
Confidential and Proprietary Information. Accordingly, the Executive expressly
acknowledges and agrees that the Executive is voluntarily entering into this
Agreement and that the terms, provisions and conditions of this Section 11 are
fair and reasonable and necessary to adequately protect the Company and its
interests and those of its shareholders.
(b) For purposes of this Agreement, the term "Confidential and
Proprietary Information" shall mean any and all (i) confidential or proprietary
information or material not in the public domain about or relating to the
business, operations, assets, financial condition, plans and/or prospects of the
Company or MCY or any of their respective subsidiaries or any of their
respective trade secrets, including, without limitation, research and
development plans or projects; computer materials such as programs, instructions
and printouts and any source codes, object codes and algorithms; formulas;
product testing information; business improvements, processes, marketing and
selling strategies; strategic business plans (whether pursued or not); budgets;
unpublished financial statements; licenses; pricing, pricing strategy and cost
data; information regarding the skills and compensation of executives; the
identities of clients and potential clients; intellectual property rights and
strategies regarding intellectual property including any work on any patents,
trademarks, tradenames or universal resource locators, prior to any filing or
the use thereof in commerce; financing terms and strategies; the terms of
contractual concepts with artists and other third parties, pricing, timing,
sales terms, methods, practices, strategies, forecasts; and (ii) any other
information, documentation or material not in the public domain or in the music
industry by virtue of any action by or on the part of the Executive, the
knowledge of which gives or may give the Company, MCY or any of their respective
subsidiaries a competitive advantage over any entity not possessing such
information. For purposes hereof, the term Confidential and Proprietary
Information shall not include any information or material (i) that is known to
the general public or in the music industry other than due to a breach of this
Agreement by the Executive or (ii) was disclosed to the Executive by a person or
entity who the Executive did not reasonably believe was bound to a
confidentiality or similar agreement with the Company.
(c) The Executive hereby covenants and agrees that, while the
Executive is employed by the Company and thereafter, unless otherwise authorized
by the Company in writing, the Executive shall not, directly or indirectly,
under any circumstance: (i) disclose to any other person or entity any
Confidential and Proprietary Information (other than in the regular course of
the Executive's duties to the Company for the benefit of the Company), other
than pursuant to applicable law, regulation or subpoena or with the prior
written consent of the Company; (ii) act or fail to act so as to impair the
confidential or proprietary nature of any Confidential and Proprietary
Information; (iii) use any Confidential and Proprietary Information other than
for the sole and exclusive benefit of the Company; or (iv) offer or agree to, or
cause or assist in the inception or continuation of, any such disclosure,
impairment or use of any Confidential and Proprietary Information. Following the
Employment Term, the Executive shall return all documents, records and other
items containing any Confidential and Proprietary Information to the Company
(regardless of the medium in which maintained or stored), without retaining any
copies, notes or excerpts thereof, or at the request of the Company, shall
destroy such documents, records and items (any such destruction to be certified
by the Executive to the Company in writing); except, however, for the
Executive's rolodex, diary and other personal files
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or personal data. Following the Employment Term, the Executive shall return to
the Company any property or assets of the Company in the Executive's possession.
(d) The Executive covenants and agrees that, while the
Executive is employed by the Company and for any period that the Company is
paying severance to the Executive hereunder or for a period of one (1) year if
the Executive's employment hereunder is terminated for Cause, if applicable, the
Executive shall not, directly or indirectly, manage, operate or control, or
participate in the ownership, management, operation or control of, or otherwise
become interested in (whether as an owner, stockholder, partner, lender,
consultant, executive, officer, director, agent, supplier, distributor or
otherwise) any business which is competitive with the Business of the Company
(as such term is hereinafter defined) or, directly or indirectly, induce or
influence any Person that has a business relationship with the Company, MCY or
any of their respective subsidiaries, to discontinue or reduce the extent of
such relationship; provided, however, that the foregoing shall not restrict the
Executive after the termination of his employment with the Company from the
Executive engaging in the Permitted Activities or providing similar consulting
services to other persons and entities. For purposes of this Agreement, the
Executive shall be deemed to be directly or indirectly interested in a business
if he is engaged or interested in that business as a stockholder, director,
officer, executive, agent, partner, individual proprietor, consultant, advisor
or otherwise, but not if the Executive's interest is limited solely to the
ownership of not more than: (i) five percent (5%) of the securities of any class
of equity securities of a corporation or other Person whose shares are listed or
admitted to trade on a national securities exchange or are quoted on NASDAQ or a
similar means if NASDAQ is no longer providing such information; or (ii) two
percent (2%) of the securities of any class of equity securities of a
corporation or other Person whose shares are not listed or admitted to trade on
a national securities exchange. The Term "Business of the Company" is set forth
on Schedule B attached hereto.
(e) While the Executive is employed by the Company and for one
(1) year after the Executive ceases to be employed by the Company, the Executive
shall not, directly or indirectly, solicit to employ or employ for himself or
others any employee of the Company or MCY or any subsidiary of the Company or
MCY who was an employee of the Company or any subsidiary of the Company or MCY
as of the date of the termination of the Executive's employment with the Company
or during the preceding three (3) month period, or solicit any such employee to
leave such employee's employment or join the employ of another, then or at a
later time.
(f) The parties agree that nothing in this Agreement shall be
construed to limit or negate the common law of torts, confidentiality, trade
secrets, fiduciary duty and obligations where such laws provide the Company with
any broader, further or other remedy or protection than those provided herein.
(g) Because the breach of any of the provisions of this
Section 11 may result in immediate and irreparable injury to the Company for
which the Company may not have an adequate remedy at law, the Company shall be
entitled, in addition to all other rights and remedies available to it at law,
in equity or otherwise, to seek a decree of specific performance of the
restrictive covenants contained in this Section 11 and to seek a temporary and
permanent
8
injunction enjoining such breach (without being required to post a bond or
furnish other security or to show any damages).
(h) In the event the Executive challenges this Agreement and
an injunction is issued staying the implementation of any of the restrictions
imposed by Section 11 hereof, the time remaining on the restrictions shall be
tolled until the challenge is resolved by final adjudication, settlement or
otherwise.
(i) The term "Change of Control" shall have the same meanings
as are ascribed to such term in Section 2.6 of the Company's Amended and
Restated 1999 Stock Option Plan.
12. NOTICES. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (i) if personally delivered, on
the Business Day of such delivery (as evidenced by the receipt of the personal
delivery service), (ii) if mailed certified or registered mail return receipt
requested, four (4) Business Days after being mailed, (iii) if delivered by
overnight courier (with all charges having been prepaid), on the Business Day of
such delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (iv) if delivered by facsimile transmission, on the
Business Day of such delivery if sent by 6:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding Business Day (as
evidenced by the printed confirmation of delivery generated by the sending
party's telecopier machine). If any notice, demand, consent, request,
instruction or other communication cannot be delivered because of a changed
address of which no notice was given (in accordance with this Section 12), or
the refusal to accept same, the notice, demand, consent, request, instruction or
other communication shall be deemed received on the second Business Day the
notice is sent (as evidenced by a sworn affidavit of the sender). All such
notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:
If to the Executive:
Xx. Xxxxx Xxxxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
With a copy to:
Xxxx X. Xxxxxxxxxxxxx, Esq.
Loeb & Loeb LLP
Suite 2200
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
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If to the Company:
MCY Music World, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
With copies to:
MCY Music World, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
General Counsel
Telecopier: (000) 000-0000
and
Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
or to such other address as a party may have furnished to the other parties in
writing in accordance herewith.
13. MISCELLANEOUS.
(a) Benefit of Agreement and Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, personal administrators, successors and permitted assigns;
provided, however, that the Executive may not assign any of his rights or
delegate any of his duties or responsibilities hereunder without the prior
written consent of the Company. This Agreement shall be binding on any successor
to the Company whether by merger, consolidation, acquisition of all or
substantially all of the Company's assets or business or otherwise, as fully as
if such successor were a signatory hereto. Except as expressly permitted by
Section 13(a), nothing herein is intended to or shall be construed to confer
upon or give any person or entity, other than the parties hereto, any rights,
privileges or remedies under or by reason of this Agreement.
(b) Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD
OR REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE
CONSTRUED
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AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS
AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK AND THE FEDERAL DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK WITH RESPECT TO ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY RIGHT TO CONTEST THE VENUE OF SAID
COURTS OR TO CLAIM THAT SAID COURTS CONSTITUTE AN INCONVENIENT FORUM. EACH OF
THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(c) Severability. Each term and provision of this Agreement is
severable; the invalidity, illegality or unenforceability or modification of any
term or provision of this Agreement shall not affect the validity, legality and
enforceability of the other terms and provisions of this Agreement, which shall
remain in full force and effect. Since it is the desire and intent of the
parties that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought, should any particular provision of this Agreement
be deemed invalid, illegal or unenforceable, the same shall be deemed reformed
and amended to delete that portion that is adjudicated to be invalid, illegal or
unenforceable and the deletion shall apply only with respect to the operation of
such provision and to the extent of such provision and, to the extent that a
provision of this Agreement would be deemed unenforceable by virtue of its
scope, but may be made enforceable by limitation thereon, each party agrees that
this Agreement shall be reformed and amended so that the same shall be
enforceable to the fullest extent permissible under the laws and public policies
applied in the jurisdiction in which enforcement is sought.
(d) Entire Agreement. This Agreement (together with the
Schedules attached hereto), the Stock Option Agreement and the Plan contain the
entire understanding and agreement of the parties, and supersedes any and all
other prior and/or contemporaneous understandings and agreements, either oral or
in writing, between the parties hereto with respect to the subject matter
hereof, all of which are merged herein. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements, oral
or otherwise, have been made by the other party hereto, or anyone acting on
behalf of such other party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding.
(e) Amendments; Waiver. This Agreement may be modified,
amended or waived only by an instrument in writing signed by the Company and the
Executive. No waiver of any provision of this Agreement shall constitute a
waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. Any waiver granted hereunder shall be limited to
the instance and facts for which it has been granted..
(f) Attorneys' Fees. Should any party hereto institute any
action, suit or proceeding at law or in equity to enforce any provision of this
Agreement, including, without
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limitation, an action for declaratory relief, or for damages by reason of an
alleged breach of any provision of this Agreement, or otherwise in connection
with this Agreement, or any provision hereof, the prevailing party in such
action, suit or other proceeding shall be entitled to recover from the losing
party or parties payment of the attorneys' fees and expenses for services
rendered to the prevailing party in such action, suit or proceeding.
(g) Headings; Counterparts. The headings contained in this
Agreement are inserted for reference purposes only and shall not in any way
affect the meaning, construction or interpretation of this Agreement. This
Agreement may be executed in two (2) counterparts, each of which, when executed,
shall be deemed to be an original, but both of which, when taken together, shall
constitute one and the same document. Execution of this Agreement by facsimile
signature shall constitute a valid signature of the party so executing this
Agreement.
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the Company and the Executive has
executed this Agreement as of the date first above written.
MCY MUSIC WORLD, INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Chairman and Chief Executive
Officer
/s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx
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Schedule A. Permitted Activities
--------------------------------
Advisory services with respect to the following companies:
1. RTC Management, Xxxxx Xxxx' affiliated entertainment company
2. Lava Records
3. Distributed Media
4. King Biscuit Entertainment Group
5. Latin TV
6. Ruthless Records
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Schedule B
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For purposes hereof, the term "Business of the Company" shall
mean engaging in the development, acquisition and production of music and other
audio and video content and the distribution of that content through electronic,
interactive and/or other digital or any other medium, whether now known or
hereafter invented including, without limitation, over internet, satellite, CD,
DVD, DVD-ROM, television or other means; the acquisition, ownership and
operation of radio stations; the operation of a talent booking agency and/or
talent management company; the operation of a website which provides an
interactive environment and virtual music and entertainment store; the
production of concerts, concert tours, and other live entertainment events; and
engaging in various marketing, cross-promotional and other related activities
associated with the other business and activities of the Company, MCY and their
respective subsidiaries or using databases developed from those activities, in
each case to the extent engaged in by the Company, MCY or any of their
respective subsidiaries during the Employment Term or which were planned to be
engaged in at the time of the termination of the Employment Term. In the case of
activities which are "planned to be engaged in", such planning shall be
evidenced by demonstrable actions or a written memorandum or other instrument
evidencing the intent of the Company, MCY or any of their respective
subsidiaries to engage in any such activity during the applicable time period of
Executive's covenant as provided in Section 11(d) of the Employment Agreement.
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