SETTLEMENT AGREEMENT
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This Agreement is made this 25th day of July 1996, by and between Medallion
Taxi Media, Inc., a New York corporation with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("MTM or "Buyer") and See Level Advertising, Inc. and See
Level Management, Inc., New York corporations, with offices c/o ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (collectively "See Level" or "Seller").
RECITAL
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WHEREAS, MTM and See Level are presently parties to a litigation pending in
the Supreme Court of the State of New York in and for the County of New York
under Index No. 96-600739 (the "Litigation"); and
WHEREAS, MTM and See Level desire to settle and resolve all of the
outstanding disputes between them in the Litigation and provide for MTM to
acquire certain assets relating to Seller's taxi-top advertising business (the
"Business") on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereby agree as follows:
1. Settlement of Litigation: Simultaneously with the execution of this
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Agreement, See Level and MTM shall fully settle and resolve the Litigation and
all other claims and disputes between them, whether asserted or unasserted, by
executing and
delivering: (i) mutual general releases, in the forms annexed hereto as
Exhibits 1(a), (b), (c) and (d); and (ii) a stipulation discontinuing the
Litigation between MTM and See Level with prejudice, in the form annexed hereto
as Exhibit 2.
2. Sale of Assets: In consideration of MTM's payment of $427,000.00, by
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bank or certified check, simultaneously with the execution of this Agreement,
MTM shall buy and See Level shall sell, assign, transfer and convey to MTM all
of its right, title and interest in and to the following assets (the "Assets"),
which Assets shall be delivered to MTM free and clear of any and all security
interests, liens and encumbrances of any kind or description whatsoever (the
"Liens"): (a) 450 illuminated taxi-top advertising displays (the "Signs")
properly and legally installed on the taxis bearing the New York City taxi
medallion numbers listed on Schedule A attached hereto; (b) contracts with taxi
fleet operators (the "Operators") listed on Schedule B attached hereto (the
"Contracts"); (c) any and all agreements with advertisers (the "Advertising
Contracts") respecting the placement of advertisements on the Signs, subject to
MTM's acceptance of the terms and conditions of any such agreements; and (d) the
tradenames, trademarks and servicemarks "See Level Advertising" and "See Level
Management" and any other similar marks associated or used with the operation of
the Assets (the "Trademarks"). Simultaneously with the execution of this
Agreement, See Level shall deliver the Assets to MTM along with
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the following documents to MTM evidencing the transfer of the Assets to MTM:
(i) a ▇▇▇▇ of sale for the Signs, in the form annexed hereto as Exhibit 3; (ii)
assignment of the Contracts, in the form annexed hereto as Exhibit 4; (iv)
letters to the Operators advising them of MTM's acquisition of the Signs and See
Level's assignment of the Contracts, in the form annexed hereto as Exhibit 5;
(iii) assignments of the Advertising Contracts, if any, in the form annexed
hereto as Exhibit 6; and (iv) assignments of the Trademarks, in the forms
annexed hereto as Exhibits 7 (a) and (b). In addition, upon execution of this
Agreement, See Level's attorney shall deliver to MTM an undertaking to file
within two (2) business days name change amendments to the certificates of
incorporation with respect to all See Level entities, in the forms annexed
hereto as Exhibits 8 (a) and (b). The parties hereto acknowledge that any
claims and/or causes of action that See Level may have against any third parties
and any revenue due See Level that remains outstanding as of the date hereof,
other than revenues attributable to the Advertising Contracts being assigned
pursuant to Exhibit 6 hereto, are not part of the Assets nor are these claims
and revenues being sold or transferred pursuant to this Agreement, and that See
Level shall retain full rights to the aforementioned claims and revenues.
3. Non-Competition Agreement: For a period of two and one-half (2 1/2)
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years (i.e., 912 calendar days) from the date of
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the execution of this Agreement, See Level shall not engage in, directly or
indirectly, as principal, agent, employee, consultant or otherwise in the taxi-
top advertising business: (a) in metropolitan areas in the United States of
America in which MTM conducts business or; (b) in metropolitan areas in the
United States with populations of 1,000,000 persons or more, including, without
limitation, the following United States greater metropolitan areas: New York,
Boston, Atlanta, Chicago, Miami, Los Angeles and Philadelphia. The terms of
this paragraph shall survive the closing.
4. Right of First Refusal: MTM shall have a right of first refusal to
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purchase any taxi-top advertising business that See Level may establish outside
of the United States and seek to sell within two and one-half (2 1/2) years
(i.e., 912 calendar days) from the date hereof (the "New Business"). In the
event that See Level establishes any New Business and See Level receives a bona
fide written offer to purchase the New Business or substantially all of its
assets from a third party (the "Offer"), which See Level has decided to accept,
MTM shall have the right to purchase the New Business on the same terms and
conditions as set forth in the Offer. Within ten (10) days of receipt of the
Offer, See Level shall provide MTM with a true copy of the Offer, by certified
mail, return receipt requested, and within thirty (30) days of MTM's receipt of
said Offer from See Level, MTM may exercise its right of first refusal by
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notifying See Level, in writing, of its intention to purchase the New Business
on the same terms and conditions set forth in the Offer and delivering its check
for ten percent (10%) of the purchase price set forth in the Offer, which shall
be held in escrow by See Level's attorneys pending execution of a formal
contract of sale embodying the terms of the Offer. If MTM does not timely
exercise its right of first refusal, See Level may sell the New Business
strictly in accordance with the terms of the Offer to the third party offeror.
If no such sale is consummated within sixty (60) days of the expiration of the
thirty (30) day period, then See Level may not sell the New Business without
complying with the terms and provisions set forth above. The terms of this
paragraph shall survive the closing.
5. Indemnification Agreement: See Level shall indemnify, defend and hold
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MTM harmless from and against any and all claims, actions, damages, judgments,
costs and expenses (including reasonable attorneys' fees and disbursements)
incurred by MTM: (a) arising solely out of any claims asserted by any person or
entity relating to the operation, maintenance and ownership of the Assets prior
to the date of the closing of the Settlement Agreement; and (b) as a result of
or attributable to any misrepresentation or breach of any representation,
warranty, covenant, or agreement herein (including, without limitation,
provisions on applicable bulk transfer laws) given or made by
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Seller. Notwithstanding the foregoing, See Level's indemnity with respect to
any claim asserted by Metrometer against MTM shall be limited as follows: (i)
See Level shall pay all damages, judgments, costs and expenses awarded to
Metrometer against MTM up to $50,000.00, exclusive of legal fees; and (ii) in
the event Metrometer commences an action against both MTM and See Level, See
Level shall pay for its counsel to make a dispositive motion on MTM's behalf; in
the event such motion is not successful, MTM shall be responsible for its own
legal fees in connection with all further proceedings in any such action
commenced by Metrometer. MTM shall indemnify, defend and hold See Level
harmless from and against any and all claims, actions, damages, judgments, costs
and expenses (including reasonable attorneys' fees and disbursements) incurred
by See Level up to $50,000, arising solely out of any claims against See Level
relating to the assignment of the advertising contract annexed as Schedule A to
Exhibit 6 hereto (the "Advertising Contract"). Notwithstanding the foregoing
MTM has no duty to indemnify or defend See Level with respect to any claims
asserted against it for fraud or misrepresentation in connection with the
Advertising Contract.
6. Representations: See Level warrants and represents that as of the date
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hereof and at all times prior to See Level's delivery of the Assets to MTM:
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(a) See Level is not and has not been at any time in default under the
terms of the Contracts;
(b) all payments due under the Contracts have been made by See Level as of
each of the due dates set forth in the Contracts;
(c) the Assets are owned by See Level and are not encumbered by any Liens;
(d) no consents are required for the transfer of the Assets to MTM;
(e) the Contracts are in full force and effect;
(f) to the best of See Level's knowledge, the Advertising Contracts, if
any, are in full force and effect;
(g) See Level has the full right and authority to sell, assign, transfer
and convey the Assets;
(h) the Signs are in good condition and are capable of being used for
their intended purposes without the necessity of material repairs;
(i) the See Level entities are corporations duly organized and validly
existing under the laws of the State of New York, are duly qualified to do
business in the State of New York, and have full power and authority to carry on
current business and to own, use and sell their respective assets and
properties;
(j) See Level's boards of directors and shareholders have authorized the
execution and delivery of this Agreement to Buyer and the carrying out of its
provisions. At Closing, Seller shall
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furnish Buyer with duly certified copies of such resolutions in the forms
annexed hereto as Exhibits 9 (a) and (b);
(k) Neither the execution and delivery of this Agreement, nor the
consummation by Seller of any of the transactions contemplated hereby, will
result in a breach of any statute or regulation, or of any administrative order
or decree; nor will such compliance conflict with or result in the breach of any
term, provision, covenant or condition of any agreement or other instrument to
which See Level is a party or by which it may be bound, or, which with the
giving of notice or lapse of time, or both, may constitute an event of default
thereunder;
(l) Other than the Litigation, no suit, action, or legal, administrative,
arbitration, or other proceeding or governmental investigation is pending, or to
See Level's knowledge is threatened against See Level or See Level's Assets,
which may materially or adversely affect See Level's financial condition or the
conduct of See Level's Business. In addition, there is no outstanding judgment,
decree, or order against See Level which affects See Level in any way;
(m) See Level has filed with the appropriate governmental agencies all
required tax returns and tax reports. See Level has not executed any waiver or
waivers which would have the effect of extending any applicable statute of
limitations with respect to its income tax liabilities, if any. See Level has
paid all applicable taxes, assessments, fees, and other governmental
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charges levied upon its assets and income, other than those not yet due and
payable or delinquent. See Level has not had its federal income tax returns
audited by the Internal Revenue Service;
(n) See Level warrants and represents that the original purchase price of
the Signs was $170,000, net of sales taxes; and
(o) The advertising contract annexed as Schedule A to Exhibit 6 herein was
prepared by the advertiser on the advertiser's pre-printed contract form and
delivered to See Level; See Level executed said advertising contract and
delivered same to the advertiser; and to the best of See Level's knowledge, said
advertising contract is thus valid and binding; the advertiser thereunder has a
net worth in excess of $10,000,000; the term of said advertising contract is for
a period of not less than 90 days, commencing on September 15, 1996, for 450
Signs per month; and the monthly gross ▇▇▇▇▇▇▇▇ to be derived under said
advertising contract is not less than $72,450 per month.
Such representations shall survive the closing. Notwithstanding any of the
foregoing, it is expressly understood that See Level makes no representation as
to the assignability of the Contracts or the Advertising Contracts.
7. Bulk Sales Law: The parties hereby waive See Level's compliance with
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the provisions of the New York Uniform Commercial Code-Bulk Transfers Law. See
Level shall hold a sufficient amount of the net cash proceeds in trust to pay
all its creditors
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as and when their claims come due, and hold and save MTM harmless against any
loss, damage, or expense, including reasonable attorneys' fees and court costs,
incurred by MTM as a result of or attributable to the parties' failure to
comply with such provisions. The terms of this paragraph shall survive the
closing.
8. Brokerage: Each party represents and warrants to the other that no
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broker is entitled to any commission, or similar fee, in connection with the
making and carrying out of this Agreement. The terms of this paragraph shall
survive the closing.
9. Sales Taxes: All sales taxes which may be payable in connection with
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the transfer of any assets to be transferred to MTM hereunder shall be borne
solely by MTM, which shall timely make all necessary filings with respect to any
such taxes. MTM shall hold See Level and ▇▇▇▇▇ ▇▇▇▇▇▇ harmless with respect to
any such taxes. The terms of this paragraph shall survive the closing.
10. Further Assurances: The parties acknowledge and warrant that they
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shall at their own expense promptly execute and deliver all further instruments
and documents provided by the other party that are reasonable, and take all
further reasonable action that may be necessary or that may be reasonably
requested in order to effectuate this Agreement. The terms of this paragraph
shall survive the closing.
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11. Consultation with Counsel: Each of the parties hereto acknowledges
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and warrants: (i) that each party has carefully and completely read this
Agreement; (ii) that each party has consulted with his counsel in regard to
negotiating and executing this Agreement; (iii) that such counsel has explained
in detail and fully the terms of this Agreement and the annexed schedules and
exhibits to each of them and the effect of said terms and documents; (iv) that
each party fully understands all the terms and provisions hereof; and (v) that
each party has knowingly and voluntarily executed this Agreement.
12. Jointly Drafted Agreement: It is specifically understood and agreed
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by and between the parties that the within Agreement and the schedules and
exhibits thereto are the result of extensive negotiations between the parties.
It is understood and agreed that all parties shall be deemed to have drawn these
documents to avoid any negative inference by any court as against the preparer
of the documents. This Agreement and the schedules and exhibits thereto shall
be binding upon each and all of the respective parties, their heirs, assigns,
executors, administrators, successors-in-interest, partners, employees, agents,
officers, shareholders and directors.
13. Entire Agreement: This Agreement, as well as the schedules and
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exhibits referenced herein, together with the Settlement Agreement executed
simultaneously herewith by and between MTM and ▇▇▇▇▇ ▇▇▇▇▇▇ and the exhibits
annexed thereto,
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constitute the entire agreement between the parties and any prior agreements,
understandings, or memoranda, shall be merged into said documents.
14. Modifications: This Agreement, as well as the schedules and exhibits
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referenced herein, may not be changed except by another agreement in writing,
fully executed by all parties hereto, their respective heirs, successors and/or
assigns. The parties herein agree that their counsel shall be authorized to
enter into such modifications on their behalf.
15. Provisions Severable: If any provision in this Agreement or the
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schedules and exhibits referenced herein is declared invalid by any court,
tribunal or administrative agency, then such provision shall be deemed
automatically adjusted to conform to the requirements for validity as declared
at such time, and as so adjusted shall be deemed a provision respectively of
this Agreement or the schedules and exhibits referenced herein, as though
originally included herein. If any invalidated provision is of such a nature
that it cannot be so adjusted, then the same shall be deleted and shall not
effect the remaining provisions of this Agreement, and to this end the
provisions of this Agreement are intended to be and shall be severable.
16. Choice of Law: This Agreement shall be construed in accordance with
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the laws of the State of New York, without giving effect to the choice of law
rules thereof.
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17. Assignment: This Agreement may not be assigned by either party
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hereto, except with the prior written consent of the other party hereto.
18. Notices: Any communication required or permitted by this Agreement
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shall be in writing and shall be deemed to have been given when mailed by
registered or certified mail, return receipt requested, or when delivered or
otherwise actually received at the following addresses, or to such other
addresses as the parties may communicate from time to time to each other through
written notice:
If to MTM:
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Medallion Taxi Media, Inc.
▇▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With a required copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to See Level:
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c/o ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a required copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
19. Confidentiality Provision: See Level represents and warrants that
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absent the prior written consent of MTM it shall
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keep the terms, conditions and provisions of this Agreement, and the fact that
this Agreement was entered into by and between the parties, completely
confidential, and it shall not in any way disclose, divulge or reveal same to
any person, entity or governmental agency, except for fiduciaries who are under
▇▇▇▇▇▇'▇ and/or See Level's control and who agree to be bound by the terms of
this provision, until August 31, 1996, or at such time and only to the extent
that the terms hereof become publicly known from a source other than See Level
or ▇▇▇▇▇ ▇▇▇▇▇▇. In the event of a breach of this provision, MTM may seek
monetary damages and equitable relief against ▇▇▇▇▇▇ and See Level. In the
event ▇▇▇▇▇▇ and/or See Level are compelled by some form of process to disclose
the terms of this Agreement, ▇▇▇▇▇▇ and/or See Level shall provide MTM with
notice by mail and telecopier of the subpoena or other form of process within
three (3) days of receipt of such subpoena or process, or one (1) day before the
subpoena or process is returnable if the subpoena or process is received less
than three (3) days before it is returnable, advising MTM where and when the
subpoena or process is returnable, who has made the request and enclosing a copy
of the subpoena or process with such notice. ▇▇▇▇▇▇ and See Level shall
cooperate with MTM in any motion to quash such subpoena or process, or in any
such similar proceeding that MTM may choose or undertake.
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20. Counterparts: The parties hereto agree that this Agreement may be
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signed in counterparts and that the signed counterparts shall together be deemed
an original.
21. Section Headings: Section headings are for convenient reference only
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and shall not affect the meaning or have any bearing on the interpretation of
any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
SEE LEVEL MANAGEMENT, INC. SEE LEVEL ADVERTISING, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇, Pres. ▇▇▇▇▇ ▇▇▇▇▇▇, Pres.
MEDALLION TAXI MEDIA, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇, C.O.O.
and Executive Vice President
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