Sample Business Contracts

Settlement Agreement - THINK New Ideas Inc. and Scott Mednick

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                              SETTLEMENT AGREEMENT

         THIS SETTLEMENT  AGREEMENT (the "Agreement") is entered into as of this
__ day of May 1998,  with the intent  that it be  effective  as of May 15,  1998
("Effective  Date"),  by and  between  (i) THINK NEW  IDEAS,  INC.,  a  Delaware
corporation  ("THINK"),  and SCOTT A. MEDNICK ("Mednick"),  and (ii) MEDNICK and
RONALD BLOOM and ADAM CURRY, as to Section 5 only.


         WHEREAS, THINK and Mednick  (collectively,  the "Parties") entered into
that certain  Employment  Agreement,  dated June 30, 1996, as amended thereafter
from time to time ("Employment Agreement"); and

         WHEREAS, Mednick wishes to terminate his employment with THINK; and

         WHEREAS,  the  Parties  have  mutually  agreed  to  certain  terms  and
conditions  pursuant to which Mednick will terminate his employment  with THINK;

         WHEREAS,  said  terms  and  conditions  are  reflected  in  the  letter
agreement  attached hereto as Exhibit A and are intended to serve as a basis for
the Parties  entering into this  Agreement and the forms of agreements  attached
hereto as Exhibits C, D, and E; and

         WHEREAS,  upon  execution by the  appropriate  parties,  this Agreement
shall supersede and replace the Employment  Agreement and Mednick's rights under
that agreement shall terminate; and

         WHEREAS,  Mednick  has  carefully  read and fully  understands  all the
provisions and effects of this Agreement and the releases contained herein: and

         WHEREAS,  the Parties  hereto  desire to put to rest and settle any and
all claims,  controversies  and differences  between them of any sort, origin or
description in order to avoid the costs and uncertainties  inherent in resolving
said matters.

         NOW, THEREFORE,  the Parties,  intending to be legally bound hereby and
in consideration of the promises contained herein, do hereby agree as follows:

         1.  TERMINATION.  Mednick  acknowledges  that,  effective as of May 15,
1998, his employment with THINK terminated, after which time he has performed no
further duties, functions or services for THINK.

consideration of the settlement and release of all claims between the Parties as
set forth herein, THINK shall provide to Mednick the following:

                  (a)  the  sum  of   $936,130   payable  in  equal   bi-monthly
installments  over a period  of 24  months  commencing  June 1,  1998  ("Payment

                  (b) the  right to  participate  in  THINK's  health  insurance
program during the Payment Period, the cost for said participation to be paid by


                  (c) a sum of cash  equal to the value of four  weeks of unused
"vacation" benefits accrued by Mednick during the period commencing July l, 1997
and ending May 15, l998;

                  (d) a $1,000,000 term life insurance policy,  the ownership of
which shall be transferred to Mednick and the premium payments for which will be
paid by THINK for a period of four months after the Effective Date; and

                  (e) access to the  premises of THINK and a right to remove his
personal  property for a period of seven (7) calendar  days,  commencing May 25,

         3. NO OTHER  UNPAID  SALARY.  Excepts  as  otherwise  provided  herein,
Mednick  acknowledges that he is not entitled to receive any salary,  bonuses or
commissions from and after the date of this Agreement.

hereby agree that the Employment Agreement, attached hereto as Exhibit B, shall,
from and after the date  hereof,  be  terminated  and have no  further  force or
effect and that Mednick shall resign as President and Chief Executive Officer of
THINK  and  resign  as a member  of the  Board  of  Directors  of THINK  and any
executive committee of THINK.

         5. LOCKUP AGREEMENT AND RIGHTS AGREEMENT.  In consideration for Mednick
entering into this Agreement (i) Ronald Bloom, Adam Curry and Mednick will enter
into a Lockup Agreement  substantially in the form attached hereto as Exhibit C,
and (ii) THINK and Mednick will enter into a Rights  Agreement  substantially in
the form attached hereto as Exhibit D.

         6. COVENANT NOT TO COMPETE.  In  consideration  for the undertakings of
THINK set forth in this Agreement and for other good and valuable consideration,
receipt of which is hereby  acknowledged,  Mednick  hereby  covenants and agrees
that,  so long as Mednick is receiving any  consideration  under Section 2(a) of
the Agreement (the "Non-Competition Period"):

            (a)  ACTIVITIES.  Mednick  shall  not,  anywhere  in  North  America
directly or indirectly,  individually or as a member of any partnership or joint
venture, or as an officer, director, stockholder, employee or agent of any other
person,  firm,  corporation,  business  organization  or other entity  (except a
charitable  organization  or entity that is organized and operated under Section
501(c)(3) of the Internal  Revenue Code of 1986,  as amended),  participate  in,
engage in,  solicit or have any  financial or other  interest in any activity or
any business or other  enterprise in any field which at the time of  termination
is  competitive  with the business or is in  substantially  the same business as
THINK or any  affiliate,  subsidiary  or division  thereof  (unless the Board of
Directors  shall have  authorized  such activity and THINK shall have  consented
thereto in writing), as an individual or as a member of any partnership or joint
venture, or as an officer, director, stockholder, investor, employee or agent of
any other person,  firm,  corporation,  business  organization  or other entity;
provided,  however,  that nothing contained herein shall be construed to prevent
Mednick from acquiring for investment purposes only the stock of any corporation
that competes with THINK, which is listed on a national  securities  exchange or
traded  in the  over-the-counter  market if  Mednick  does not and will not as a
result of such  investment  own more than five percent (5%) of the stock of such


            (b)  NON-SOLICITATION.  Mednick shall not: (i) solicit or induce any
employee of THINK to terminate his employment or otherwise  leave THINK's employ
or hire any such employee  (unless the Board of Directors  shall have authorized
such  employment  and THINK shall have  consented  thereto in writing);  or (ii)
solicit any  clients or  customers  of THINK,  either as an  individual  or as a
member  of  any  partnership  or  joint  venture,  or as an  officer,  director,
stockholder, investor, employee or agent of any other person, firm, corporation,
business organization or other entity.

         7. STOCK OPTIONS. THINK hereby acknowledges that (i) Mednick is a party
to the Amended and Restated 1997 Stock Option Plan ("1997 Plan"),  (ii) as such,
the options  granted to Mednick  thereunder  vest on an  accelerated  basis as a
result  of his  separation  from  THINK,  and  in  connection  therewith,  THINK
represents that:

            (a) DIRECTOR OPTIONS.  Within sixty (60) days of the Effective Date,
it will register with the Securities and Exchange Commission the Twenty Thousand
(20,000)  stock  options  granted to Mednick in his  capacity as a member of the
Board of Directors of THINK; and

            (b) EMPLOYEE OPTIONS.  Within sixty (60) days of the Effective Date,
it will obtain all  necessary  approvals so that Mednick may exercise the Eighty
Thousand (80,000) options that were granted to him under the 1997 Plan.

         8. PRESS  RELEASE.  The Parties will jointly  prepare a press  release,
indicating  Mednick's  departure and his being available to THINK to provide the
consulting services pursuant to a Consulting Agreement substantially in the form
attached hereto as Exhibit E.

         9. MUTUAL  RELEASE AND WAIVER.  Except as provided for in paragraph 11,
the Parties  hereby  release and waive any and all claims they may have  against
each other,  including any claims Mednick may have against  THINK,  its parents,
subsidiaries, affiliates, predecessors and assigns, past or present, and each of
them and its and their  officers,  directors,  agents,  servants  and  employees
(hereinafter  collectively referred to as the "THINK Parties"), from and against
any and all  rights,  claims,  demands,  controversies,  causes  of  action  and
liabilities of every kind and character whatsoever,  known or unknown, in law or
in equity,  occurring  prior to and  including the date of the execution of this
Agreement and in particular; but without limitation of the general terms herein,
any  claims of  discrimination  which  could  have been filed by or on behalf of
Mednick  with any agency or court  under any  federal,  state or local  statute,
regulation,  ordinance,  order, rule, tort, implied or express contract or other
common law theory. This release and waiver applies to any and all claims whether
the claims are past or present,  whether  they arise from common law or statute,
whether they arise from labor laws or  discrimination  laws  including,  but not
limited  to,  Title VII of the Civil  Rights Act of 1964,  as  amended,  the Age
Discrimination  in Employment Act, as amended,  the Employee  Retirement  Income
Security  Act of 1974,  as  amended,  any  federal  or  state  civil  rights  or
employment discrimination legislation which claims are based on events that have
transpired  from  the  beginning  of  time  to the  date  of  execution  of this
Agreement.  Mednick  further  agrees  and  covenants  that  should  any  person,
organization or other entity file,  charge,  claim, sue or cause or permit to be
filed any civil action suit or legal  proceeding  involving any matter occurring
at any time in the past,  Mednick will not seek or accept any personal relief in
such civil  action,  suit or legal  proceeding.  Further,  the Parties do hereby


expressly  waive and  relinquish,  to the fullest  extent  permitted by law, the
provisions, rights, and benefits of ss. 1542 of the California Civil Code, which
provides --

               "A general  release does not extend to claims which the
               creditor does not know or suspect to exist in his favor
               at the time of executing the release, which if known by
               him must have  materially  affected his settlement with
               the debtor."

and any and all provisions,  rights and benefits of any similar state,  federal,
or other law, rule or regulation or the common law.

         10. MAINTENANCE OF EMPLOYMENT OF ASSISTANT.  THINK hereby covenants and
agrees to maintain the  employment  of Mednick's  assistance  for a period of no
less than 3 months beyond the Effective Date.

         11. FINAL  SETTLEMENT.  The Parties hereby agree that this Agreement is
in compromise and final settlement among the Parties of all disputed matters and
constitutes  full  satisfaction  of all  claims  made or which  could be made of
whatsoever  kind or  character  which the Parties have or had against each other
from the beginning of time until the Effective Date.

         12. RETENTION OF CERTAIN CLAIMS. The Parties expressly acknowledge that
this  Agreement  is in the nature of a  settlement  of claims and  counterclaims
which either has or had against the other for legal and  equitable  relief.  The
Parties acknowledge further,  however, that each expressly retains, and does not
waive,  any and all of its or his rights  relative  to  equitable  and/or  legal
relief under this Agreement.

         13.  NON-DISPARAGEMENT.  The Parties  represent,  agree,  covenant  and
promise that they will refrain from  disparaging  each other in connection  with
Mednick's departure and the execution of this Agreement.

         14.  CONFIDENTIALITY.

              (a)  INFORMATION.  The   Parties  hereto   recognize  that  it  is
fundamental to the business and operation of THINK, its affiliates, subsidiaries
and divisions thereof to preserve the specialized knowledge,  trade secrets, and
confidential  information of the foregoing  concerning the field of advertising,
marketing  and  interactive  Internet  solutions.  The strength and good will of
THINK is derived from the specialized knowledge, trade secrets, and confidential
information  generated  from  experience  through the  activities  undertaken by
THINK, its affiliates, subsidiaries and divisions thereof. The disclosure of any
of such information and the knowledge  thereof on the part of competitors  would
be beneficial to such  competitors  and  detrimental to THINK,  its  affiliates,
subsidiaries and divisions thereof, as would the disclosure of information about
the marketing  practices,  pricing  practices,  costs,  profit  margins,  design
specifications,  analytical  techniques,  concepts,  ideas, process developments
(whether or not patentable), customer and client agreements, vendor and supplier
agreements and similar items or technologies. By reason of his being an employee
of THINK, in the course of his  employment,  Mednick had access to, and obtained
specialized knowledge,  trade secrets and confidential  information such as that
described  herein  about the business and  operation of THINK,  its  affiliates,


subsidiaries  and  divisions  thereof.  Therefore,  so long as Mednick  receives
compensation  pursuant to Section 2 of this Agreement,  Mednick hereby agrees as
follows, recognizing and acknowledging that THINK is relying on the following in
entering into this Agreement:

                    (i)  RETAIN  SECRETS.  Except as  otherwise  required  by or
compelled by law, Mednick shall keep secret and retain in strict confidence, and
shall not use,  disclose  to others,  or  publish  any  information,  other than
information which is in the public domain or becomes publicly  available through
no wrongful act on the part of Mednick, which information shall be deemed not to
be  confidential  information,  relating  to the  business,  operation  or other
affairs of THINK, its affiliates,  subsidiaries and divisions thereof, including
but not limited to confidential  information concerning the design and marketing
practices,   pricing  practices,   costs,  profit  margins,  products,  methods,
guidelines,    procedures,    engineering   designs   and   standards,    design
specifications,  analytical techniques, technical information, customer, client,
vendor or  supplier  information,  employee  information,  and any and all other
confidential  information  acquired  by him in the  course of his past or future
services for THINK or any affiliate, subsidiary or division thereof.

               (b) TURNOVER OF DOCUMENTS.  If Mednick holds as THINK's property,
notes, memoranda,  books, records,  papers, letters,  formulas or other data and
all copies thereof and therefrom in any way relating to the business,  operation
or other affairs of THINK, its affiliates,  subsidiaries and divisions  thereof,
whether  made  by  him  or  otherwise  coming  into  his  possession,  he  shall
immediately deliver the same to THINK upon a request made to him by THINK.

         15.  CONSULTING.  Mednick  acknowledges that he will provide advice and
counsel to THINK on an "as-needed" basis pursuant to the terms of the Consulting
Agreement  attached hereto as Exhibit E. If Mednick  provides such assistance to
THINK,  THINK agrees to pay Mednick's  reasonable  expenses incurred as a result
thereof as more fully set forth in that Consulting Agreement.

         16. JOINT PREPARATION.  This Agreement was jointly drafted by THINK and
Mednick and is not to be construed against either party. Should any provision of
this Agreement be found to be illegal or unenforceable by any court of competent
jurisdiction  and cannot be modified to be  enforceable,  such  provision  shall
immediately  become null and void  leaving the  remainder  of this  Agreement in

         17.  GOVERNING  LAW.  This  Agreement  and any disputes or questions of
interpretation  arising  hereunder shall be resolved by applying the laws of the
State of California, excluding its conflict of laws principles.

         18.  REPRESENTATIONS  OF PARTIES.  In  executing  this  Agreement,  the
Parties hereby represent that:









         19. SEVERABILITY.  The provisions of this Agreement shall be considered
severable  in the  event  that  any of such  provisions  are  held by a court of
competent  jurisdiction  to be invalid,  void or otherwise  unenforceable.  Such
invalid,  void or  otherwise  unenforceable  provisions  shall be  automatically
replaced by other  provisions  which are valid and  enforceable and which are as
similar as possible in term and intent to those provisions deemed to be invalid,
void or otherwise  unenforceable.  Notwithstanding the foregoing,  the remaining
provisions  hereof shall remain  enforceable to the fullest extent  permitted by

         20.  COUNTERPARTS.  This  Agreement  may be  executed  in  two or  more
counterparts  and signature  pages may be delivered by facsimile,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.

         21. ENTIRE  AGREEMENT;  AMENDMENT.  This Agreement  contains the entire
agreement  between  THINK and Mednick with respect to the subject  matter hereof
and thereof. This Agreement may not be amended, changed, modified or discharged,
nor may any  provision  hereof be  waived,  except by an  instrument  in writing
executed by or on behalf of the party against whom enforcement of any amendment,
waiver,  change,  modification  or discharge is sought.  No course of conduct or
dealing  shall be  construed  to modify,  amend or  otherwise  affect any of the
provisions hereof.

         22. NOTICES.  All notices,  request,  demands and other  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
physically  delivered,  delivered by express mail or other expedited  service or
upon receipt if mailed, postage prepaid, via first class mail as follows:

       (a)      To the Company                    THINK New Ideas, Inc.
                and to Ronald                     45 West 36th Street
                Bloom and                         12th Floor
                Adam Curry:                       New York, NY 10018
                                                  Attention: President


                With an additional copy           Kirkpatrick & Lockhart LLP
                by like means to:                 1800 Massachusetts Ave., N.W.
                                                  Washington, D.C. 20036
                                                  Attn: John B. Spirtos

       (b)      To the Employee:                  Mr. Scott Mednick
                                                  7972 Mulholland Drive
                                                  Los Angeles, California 90046

                With an additional copy
                by like means to:                 Riordan & McKinzie
                                                  California Plaza
                                                  300 South Grand Ave.
                                                  29th Floor
                                                  Los Angeles, California 90071
                                                  Attn: Jeffrey L. Glassman

and/or to such  other  persons  and  addresses  as any party  hereto  shall have
specified in writing to the other.

         23.  ASSIGNABILITY.  This Agreement  shall not be assignable by Mednick
but  shall  be  binding  upon  and  shall  inure to the  benefit  of his  heirs,
executors,  administrators  and legal  representatives.  This Agreement shall be
assignable by THINK to any affiliate,  subsidiary or division thereof and to any
successor in interest;  provided,  however,  such  assignment  shall not relieve
THINK of any of its obligations hereunder.

         24. WAIVER AND FURTHER AGREEMENT. Any waiver of any breach of any terms
or  conditions  of this  Agreement  shall not  operate  as a waiver of any other
breach of such terms or  conditions as any other term or condition  hereof,  nor
shall any failure to enforce any  provision  hereof  operate as a waiver of such
provision or of any other provision hereof. Each of the Parties hereto agrees to
execute all such further  instruments and documents and to take all such further
action as the other  party may  reasonably  require in order to  effectuate  the
terms and purposes of this Agreement.

         25. HEADINGS OF NO EFFECT. The headings contained in this Agreement are
for  reference  purposes  only and shall not in any way  affect  the  meaning or
interpretation of this Agreement.


                  IN WITNESS  WHEREOF,  the Parties  hereto have  executed  this
Agreement  as of the  date  first  above  written  with  the  intent  that it be
effective as of the Effective Date.

                               THINK NEW IDEAS, INC.

                               By:      /s/ RONALD E. BLOOM
                               Name:    RONALD E. BLOOM
                               Its:     CHIEF EXECUTIVE OFFICER

                               /s/ SCOTT A. MEDNICK
                               Scott A. Mednick


As to Section 5 only:             /s/ RONALD E. BLOOM
                                  Ronald Bloom

                                 /s/ ADAM CURRY
                                   Adam Curry