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EXHIBIT 10.45
EMPLOYMENT TERMINATION AGREEMENT
EMPLOYMENT TERMINATION AGREEMENT (the "Agreement") made as of June __,
1997 among Dove Entertainment, Inc., a California corporation (the "Company"),
Xxxxxxx Xxxxx ("Xxxxx" or "Employee") and Xxxxxxx Xxxxxx ("Xxxxxx" or "Employee"
and, together with Viner, the "Employees").
WITNESSETH:
WHEREAS, Viner is the Chief Executive Officer and President of the
Company pursuant to an employment agreement dated January 1, 1995 and Xxxxxx is
the Vice President and Secretary of the Company pursuant to an employment
agreement dated January 1, 1995 (collectively, the "Employment Agreements");
WHEREAS, the Company and Employees have agreed to terminate the
Employment Agreements, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the covenants,
agreements, representations and warranties herein contained, and intending to be
legally bound, the parties hereby mutually agree as follows:
AGREEMENT
ARTICLE 1
COVENANTS
1.1 Beginning on the date of this Agreement, the Company shall pay
Viner (the "Viner Payment Obligation") Fourteen Thousand Five Hundred
Eighty-Three Dollars and Thirty Three Cents ($14,583.33) per month for sixty
months (the "Term") (for an aggregate amount equal to Eight Hundred Seventy-Five
Thousand Dollars ($875,000.00)) and a monthly automobile allowance of One
Thousand Dollars ($1,000.000) per month for 24 months.
1.2 Beginning on the date of this Agreement, the Company shall pay
Xxxxxx (the "Xxxxxx Payment Obligation", and, together with the Viner Payment
Obligation, the Payment Obligations") Ten Thousand Four Hundred Sixteen Dollars
and Sixty Seven Cents ($10,416.67) per month during the Term (for an aggregate
amount equal to Six Hundred Twenty-Five Thousand Dollars ($625,000.00)) and a
monthly automobile allowance of One Thousand Dollars ($1,000.00) per month for
24 months.
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1.3 The Company shall maintain the SAG group medical insurance in place
on the date hereof during the Term for the benefit of the Employees.
1.4 The Company shall issue 1,500 shares of a new series of its
preferred stock ("Series E Preferred") pursuant to an Escrow Agreement of even
date herewith among the Company, Viner and Xxxxxx and the escrow agent named
therein (the "Escrow Agreement"), substantially in the form of Exhibit A hereto.
As more fully described in the Escrow Agreement, in the event the Company
defaults with respect to either Payment Obligation, the Company shall cause the
escrow agent to issue to Viner and Xxxxxx, or either of them, that number of
shares of Series E Preferred equal to the quotient of the amount of such
defaulted Payment Obligation divided by the stated value of the Series E
Preferred. The number of Series E Preferred shares in escrow shall be reduced at
the end of each 12 month period during the Term by the portion of the Payment
Obligation paid in such period. Viner and Xxxxxx shall be entitled to
registration rights with respect to the Series E Preferred as set forth in a
registration rights agreement among the Company, Viner and Xxxxxx (the
"Registration Rights Agreement"), substantially in the form of Exhibit B hereto.
Viner and Xxxxxx acknowledge that the certificates representing the Series E
Preferred shall bear legends regarding the restrictions on transfer thereof
required by (1) the Securities Act of 1933 as amended (the "Act"), (2) this
Agreement and (3) the Escrow Agreement.
1.5 The Company will reimburse Viner and Xxxxxx for actual medical
expenses incurred to date upon presentation of invoices for such expenses, to
the extent not covered by insurance, in an amount not to exceed Ten Thousand
Dollars ($10,000) in the aggregate.
1.6 The Company will reimburse Viner and Xxxxxx for actual business
expenses incurred prior to the date of this Agreement and billed to him or her
personally (whether or not incurred by them).
1.7 The Company will hold the presently planned promotional events for
Xxxxx Xxxx, Xxxxxxx Xxxxxxx and LaVyrie Xxxxxxx and agrees to spend up to an
aggregate of Ten Thousand Dollars ($10,000) for these events.
1.8 Viner and Xxxxxx will not "compete" in any way, directly or
indirectly, in the audio book business for a period of four years, without the
prior written consent of the Company. For the purposes of this Agreement, the
term "compete" includes engaging in, assisting (financially or otherwise) or
performing services in connection with the audio book business, including,
without limitation, whether such engagement, assistance or performance is as an
officer, director, proprietor, employee, partner, stockholder or other investor
(other than as a holder of less than 5% of the outstanding capital stock of a
publicly traded corporation), creditor, guarantor, consultant, advisor, agent,
sales representative or other participant, in any county or any other political
subdivision of any state of the United States of America or any of its
possessions or territories where the Company conducted such businesses at any
time during the five year period preceding the date hereof. All of the parties
agree that the duration and area for
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which the covenant not to compete set forth in this Agreement is to be effective
are reasonable. In the event that any court determines that the time period or
the geographical areas provided for in this Agreement, or both of them, are
unreasonable and that such coverage is to the extent unenforceable, such
covenant shall be deemed to be a series of separate covenants, one for each and
every state of the United States of America and for any other territory or
possession of the United States of America where this covenant is intended to be
effective. The parties agree that damages would be an inadequate remedy for the
Company in the event of a breach or threatened breach of this covenant and thus,
in any such event, the Company may, either with or without pursuing any
potential damage remedies and in addition to such remedies, immediately obtain
and enforce an injunction, and/or a temporary restraining order, prohibiting
Viner or Xxxxxx from violating this covenant, without having to prove actual
damages or post bond.
1.9 Viner and Xxxxxx will reasonably consult with the Company during
the term of this Agreement on matters relating to their employment with the
Company. Viner and Xxxxxx further will cooperate with the Company, and the
Company will cooperate with Viner and Xxxxxx, on all litigation matters arising
prior to this Agreement or after the date of this Agreement on matters arising
during their employment with the Company. The Company will reimburse Viner and
Xxxxxx for any actual and reasonable expenses approved in advance by the
Executive Committee of the Board of Directors of the Company incurred in
connection with the foregoing.
1.10 Viner and Xxxxxx will not directly or indirectly contract with,
hire, solicit, encourage the departure of or in any manner engage or seek to
employ any author or, for purposes of audio books, reader, currently under
contract or included in the Company's book or audio catalogues for a period of
four years; provided that (i) nothing herein shall prevent Viner from acting as
agent for (A) any author or reader under contract to the Company or in the
Company's audio or book catalogs on the date hereof if Viner was acting as agent
for such author or reader on the date hereof, and (B) persons who are not
currently under contract or in the Company's book or audio catalogues, but he
may only act as agent to any such person for audio purposes if such
representation is ancillary to substantial representation by Viner for such
person in other areas, and (ii) after 24 months from the date hereof Viner and
Xxxxxx shall be free to contract with any author or reader under contract with
the Company or in the Company's catalogs for books only; and provided further
that Viner may represent.
1.11 Viner and Xxxxxx will not directly or indirectly hire, solicit,
encourage the resignation of, or in any manner seek to employ or engage any
Company employees, while employed by the Company, for a period of three years,
other than their current secretaries. Nothing herein shall prevent Viner and
Xxxxxx Xxxxxx from working together on any film or television project provided
such project is not related to any Company project.
1.12 The Company will provide Viner and Xxxxxx the office space,
parking and related facilities and equipment which he or she previously used at
the Canon facility until September 1, 1997. The Company will prepare such space,
including Viner's previous office with its existing washroom, and Viner will
occupy such space as soon as it is ready. Xxxxxx shall occupy such
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space as of July 1, 1997. At the time each of Viner and Xxxxxx occupies such
space, the Company will pay for moving all of their respective personal effects
to either such space or to such other space in the greater Los Angeles area as
each of Viner and Xxxxxx may specify (or combination thereof). The Company will
provide and pay for the services of each of Viner's and Xxxxxx'x current
secretaries until September 1, 1997.
1.13 All of Viner's and Xxxxxx'x personal possessions, including
records, receipts, artwork and furniture, will be returned to Viner and Xxxxxx,
provided that such possessions were not reimbursed by the Company nor recorded
on the books of the Company. Viner and Xxxxxx shall each be permitted to retain
one mobile phone and one computer presently in their possession; provided that
all monthly and maintenance expenses related thereto shall be the obligation of
Viner and Xxxxxx. Except as set forth in this paragraph, Viner and Xxxxxx
represent and warrant to the Company that they do not have in their possession
any property of the Company included but not limited to masters, documents or
equipment.
1.14 Regarding the motion picture "Morning Glory", the parties will
negotiate their respective rights in good faith for a period of 30 days. If they
fail to reach agreement the parties agree to binding arbitration with an
arbitrator to be mutually agreed upon and failing to mutually agree, to be
selected by JAMS/Endispute, pursuant to the arbitration rules used by
JAMS/Endispute as set forth in Section 5.1 hereof.
1.15 The Company will pay Viner and Xxxxxx the budgeted Producer and
Executive Producer fees on "Unwed Father" of $50,000 each ($12,500 each upon
completion of principal photography and $12,500 each upon delivery of the final
print), $25,000 of which they acknowledge has previously been paid to each of
them. Viner and Xxxxxx agree that they will not be entitled to any other fees or
participations on existing or future projects, provided however they shall
receive shared Executive Producer credit on a sole front card for the television
movie "Future Sport" and Xxxxxx shall receive Producer credit on each audio work
initiated during her employment with the Company in accordance with normal
practice.
1.16 The Company will not permit the amendment of its constituent
documents so as to terminate or reduce its obligations to indemnify either Viner
or Xxxxxx, or change its Directors' and Officers' insurance to reduce or
eliminate coverage of Viner or Xxxxxx for acts or omissions prior to the date
hereof.
1.17 The Company will provide Viner and Xxxxxx with ten copies of each
book and audio tape, and two VHS copies of each television movie or feature
film, published or produced by the Company after the date of this Agreement but
ordered into production during their tenure with the Company.
1.18 The Company hereby relinquishes any rights it may have in and to
"The Incredible Bongo Band", "Xxxxxx Xxxxx" and "Xxxxx Xxxxx" to Xxxxx and
Xxxxxx, and will return to them all master and inventory copies.
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1.19 The Company will deliver one box of doggy bones to Viner and
Xxxxxx per month during Term, it being understood and acknowledged that this
provision shall inure solely for the benefit of "Crillon" and "Petunia".
1.20 The parties will not issue any press releases regarding this
Agreement without mutual approval, provided nothing herein shall restrict the
Company from complying with its securities law obligations.
ARTICLE 2
RELEASES
2.1 Subject to the other terms and conditions set forth herein, Viner
and Xxxxxx hereby resign from any and all positions he and she have with the
Company and its subsidiaries effective immediately. The Company and the
Employees hereby agree to the termination of the Employment Agreements effective
immediately.
2.2 (a) Each of Viner and Xxxxxx hereby release and discharge the
Company and each of its subsidiaries, controlling persons, affiliates,
successors and assigns from all actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands, whatsoever, in law, admiralty or equity, which
such Employee or such Employee's heirs, successors or assigns ever had, now have
or hereafter can, shall or may have, for, upon or by reason of any matter, cause
or thing against any such released party; however, that the foregoing shall in
no event release the Company from its obligations set forth herein (or the
obligations referenced in Section 1.16 hereof).
(b) Without limiting the generality of the foregoing, each
Employee hereby expressly releases the Company and its subsidiaries, controlling
persons, affiliates, successors and assigns from any and all past, present and
future claims which he or she does not know of or suspect to exist in my favor,
whether through ignorance, oversight, error, negligence or otherwise and which,
if known, would materially affect his or her decision to enter into this release
and to this end such Employee hereby waives all of his or her rights under
Section 1542 of the Civil Code of California which states in full as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in its favor at the time of executing the
release which if known by him must have materially affected his
settlement with the debtor."
(c) Xxxxxx and Viner represent and warrant to the Company that
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neither of them has sold, assigned or otherwise transferred to any other person
or entity any claim which he or she has, had, or may have, against the Company
or its subsidiaries, controlling persons, affiliates, successors or assigns.
(d) The Company or any other released party may plead the
foregoing release as a complete defense and bar to any claim brought in
contravention hereof. In that event, or in the event of any breach of the
representation contained in subparagraph (c), Xxxxxx and Xxxxx will indemnify,
defend, and hold harmless such released party from and against all costs and
expenses arising therefrom, including without limitation reasonable attorneys
fees and expenses.
2.3 (a) The Company, for itself and on behalf of its subsidiaries,
successors and assigns hereby releases and discharges Viner and Xxxxxx from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, claims, and
demands, whatsoever, in law, admiralty or equity, which the Company or its
subsidiaries ever had, now have for or hereafter can, shall or may have, upon or
by reason of any matter, cause or thing; provided, however, that the foregoing
shall in no event release the Viner and Xxxxxx from their respective obligations
set forth herein.
(b) Without limiting the generality of the foregoing, the
Company hereby expressly releases Viner and Xxxxxx from any and all past,
present and future claims which it does not know of or suspect to exist in its
favor, whether through ignorance, oversight, error, negligence or otherwise and
which, if known, would materially affect its decision to enter into this release
and to this end the Company hereby waives all of its rights under Section 1542
of the Civil Code of California which states in full as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in its favor at the time of executing the
release which if known by him must have materially affected his
settlement with the debtor."
(c) The Company, on behalf of itself, its subsidiaries,
successors and assigns, represents and warrants to Viner and Xxxxxx that neither
it nor any other such releasing party has sold, assigned or otherwise
transferred to any other person or entity any claim which it has, had, or may
have, against Viner or Xxxxxx.
(d) Xxxxxx or Viner may plead the foregoing release as a
complete defense and bar to any claim brought in contravention hereof. In that
event, or in the event of any breach of the representation contained in
subparagraph (c), the Company will indemnify, defend, and hold harmless Viner
and Xxxxxx from and against all costs and expenses arising therefrom, including
without limitation reasonable attorneys fees and expenses.
ARTICLE 3
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CONDITIONS
3.1 The Company and Employees' obligations hereunder are subject to the
fulfillment to its satisfaction of the following conditions:
3.2 The Board of Directors of the Company shall have approved this
Agreement, such approval to be conclusively evidenced by the execution of this
Agreement by an officer of the Company.
3.3 That certain Stock Purchase Agreement among Media Equities
International, LLC ("MEI") and Employees of even date herewith (the "Stock
Purchase Agreement") shall be fully executed by the parties thereto.
3.4 The Company and Employees shall have executed the Escrow Agreement.
3.5 The Company and Employees shall have executed the Registration
Rights Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Viner and Xxxxxx represent and warrant to the Company that: (A)(i)
each of Viner and Xxxxxx is an "accredited investor," as defined in Rule 501
under the Securities Act; (ii) Viner and Xxxxxx are acquiring the securities
issued pursuant to the Escrow Agreement (the "Shares") for Viner and Xxxxxx'x
own account for investment with no present intention of distributing or
reselling any such Shares with a view to any distribution within the meaning of
the Securities Act; (iii) Viner and Xxxxxx have had the opportunity to ask
questions of the Company and of management of the Company regarding the Company
and have received all information reasonably requested by them; and (iv) Viner
and Xxxxxx understand that the Shares have not been registered under the
Securities Act and that the certificates representing the Shares will bear an
appropriate restrictive legend. Viner and Xxxxxx agree that they will not,
directly or indirectly, voluntarily offer, sell, pledge or otherwise dispose of
(or solicit any offers to purchase or otherwise acquire or take a pledge or) any
Shares unless (i) registered pursuant to the provisions of the Securities Act,
or (ii) an exemption from registration is available under the Securities Act and
(B) that each has the full power to execute this Agreement and consummate the
transactions contemplated herein and that this Agreement has been duly executed
and delivered by them and constitutes their respective binding obligations
enforceable in accordance with its terms.
4.2 The Company acknowledges that upon execution of this Agreement and
the Stock Purchase Agreement neither Viner nor Xxxxxx shall be an "affiliate" of
the Company as such term is defined in the Securities Act, and that,
accordingly, subject to a change in circumstances, Viner and Xxxxxx would be
able to sell their shares of Common Stock of the Company pursuant
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to Rule 144 under the Securities Act three months after the date hereof
(assuming such persons have owned such shares for the requisite periods
specified in Rule 144).
4.3 Viner represents and warrants that he has not authorized the
disbursement of any funds outside of the ordinary course of business and the
normal payroll or to himself or Xxxxxx since May 28, 1997.
4.4 The Company represents and warrants that the Company has the full
corporate power to execute this Agreement and consummate the transactions
contemplated herein and that this Agreement has been duly executed and delivered
on its behalf and constitutes its binding obligation enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium,
receivership, and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
ARTICLE 5
MISCELLANEOUS
5.1 (a) The parties will attempt in good faith to resolve through
negotiation any dispute, claim or controversy arising out of or relating to this
Agreement. Either party may initiate negotiations by providing written notice in
letter form to the other party, setting forth the subject of the dispute and the
relief requested. The recipient of such notice will respond in writing within
five days with a statement of its position on and recommended solution to the
dispute. If the dispute is not resolved by this exchange of correspondence, then
representatives of each party with full settlement authority will meet at a
mutually agreeable time and place within ten days of the date of the initial
notice in order to exchange relevant information and perspectives, and to
attempt to resolve the dispute. If the dispute is not resolved by these
negotiations, the matter will be submitted to JAMS/Endispute, or its successor,
for arbitration.
(b) The parties agree that any and all disputes, claims or
controversies arising out of or relating to this agreement that are not resolved
by their mutual agreement shall be submitted to final and binding arbitration
before JAMS/Endispute, or its successor, pursuant to the United States
Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the
arbitration process called for in this agreement by filing a written demand for
arbitration with JAMS/Endispute, with copy to the other party. The arbitration
will be conducted in accordance with the provisions of JAMS/Endispute's
Comprehensive Arbitration Rules and Procedures in effect at the time of filing
of the demand for arbitration. The parties will cooperate with JAMS/Endispute
and with one another in selecting an arbitrator from JAMS/Endispute's panel of
neutrals, and in scheduling the arbitration proceedings. The parties covenant
that they will participate in the arbitration in good faith, and that they will
share equally in its costs. The provisions of this paragraph may be enforced by
any Court of competent jurisdiction, and the
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party seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys fees, to be paid by the party against whom
enforcement is ordered.
(c) Notwithstanding anything in the Escrow Agreement to the
contrary, any award determined to be payable hereunder may, at the Company's
option, be paid in cash rather than Series E Preferred shares.
5.2 This Agreement, together with the Escrow Agreement and the
Registration Rights Agreement constitute the entire agreement of the parties and
supersedes all prior agreements of the parties with respect to the subject
matter hereof. This Agreement may not be changed or amended except in writing
signed by the parties. Notices required to be delivered hereunder shall be
delivered in accordance with the notice provisions of the Escrow Agreement.
5.3 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, administrators, successors and
assigns. Notwithstanding the foregoing, Viner and Xxxxxx may not delegate any of
its obligations hereunder except as expressly provided herein.
5.4 No provision of this Agreement shall be interpreted or construed
against any party because that party or its legal representative drafted such
provision. For all purposes of this Agreement, unless that context otherwise
requires or as otherwise expressly provided, (a) all defined terms shall include
both the singular and the plural forms thereof; (b) reference to any gender
shall include all other genders; (c) all references to words such as "herein",
"hereof", and the like shall refer to this Agreement as a whole and not to any
particular paragraph within this Agreement; (d) the term "include" means
"include without limitation"; and (e) the term "or" is intended to include the
term"and/or".
5.5 No waiver by any party hereto of any one or more defaults by any
other party or parties in the performance of any of the provisions of this
Agreement shall operate or be construed as a waiver of any future default or
defaults, whether of a like or different nature. No failure or delay on the part
of any party in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
[The next page is also numbered page 9 (signature block)]
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5.6 This Agreement shall be subject to, and be governed by, the laws of
the State of California without regard to principles regarding conflicts of law
thereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, in the case of the Company, by its duly authorized officer, all as of
the date first above written.
DOVE ENTERTAINMENT, INC.
/s/ XXXXXXX XXXXX
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Xxxxxxx Xxxxx
/s/ XXXXX XXXXXXX /s/ XXXXXXX XXXXXX
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By: Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Its: V. P. and General Counsel
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EXHIBIT A
ESCROW AGREEMENT
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EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
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