EXHIBIT 10.62

 

 

PAYMENT AGREEMENT AND GENERAL RELEASE

1.             General Release.  (a)  In consideration of (i) my relinquishing
my rights to future employment and cancellation of my rights under the
Employment Agreement dated July 16, 1999, as amended, between Executive and MPM
(each as defined below) (the “Employment Agreement”), and (ii) the Company
undertaking the obligations set forth in this Agreement, I, Geoffrey Kanter
(“Executive”), release, dismiss, covenant not to sue and forever discharge Armed
Forces Communications, Inc., a New York corporation doing business as Market
Place Media (“MPM”), CTN Media Group, Inc., a Delaware corporation (“CTN”), and
CTN’s majority stockholder, U-C Holdings, L.L.C. (“Holdings”), a Delaware
limited liability company (collectively, the foregoing shall be referred to as
the “Company”), and all affiliated corporations, limited liability companies or
partnerships and stockholders, members, managers, officers, directors,
employees, agents, predecessors, successors, transferees and assigns from any
and all actions, causes of action, suits, damages, debts, claims, counterclaims,
obligations and liabilities of whatever nature, known or unknown, including, but
not limited to those actions, causes of action, suits, damages, debts, claims,
counterclaims, obligations and liabilities, resulting or arising out of,
directly or indirectly, the employment relationship between Executive and the
Company (including, but not limited to, claims for compensation, salary,
bonuses, severance pay or other benefits), the termination of the employment
relationship, any promises made to or agreements with Executive while he was
employed at the Company, Executive’s ownership, directly or indirectly, of
capital stock in the Company, Executive’s ownership or right to receive equity
in Holdings, or the failure to offer employment with the Company, including,
without limitation, by reason of specification, any claims for breach of
contract, failure to hire, wrongful discharge of any kind, and any claims
arising under any federal, state, or local laws or ordinances, including,
without limitation, by reason of specification, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, Title VII of the Civil
Rights Act of 1964, and any common law claims now or hereafter recognized. 
Notwithstanding anything set forth to the contrary herein, Executive shall not
release CTN from any obligations, causes of action, actions, suits, damages, or
liabilities (i) arising out of CTN’s obligations set forth in this Agreement, or
(ii) any obligation of CTN to indemnify Executive in his capacity as an officer
and/or director of MPM or CTN pursuant to any indemnification provisions of
CTN’s or MPM’s Articles/Certificate of Incorporation, By-laws, any corporate
policy of the Board of Directors or any officers and directors insurance. 
Executive does hereby agree and acknowledge that except for the payments
pursuant to Paragraph 3 below and the other obligations set forth herein,
Executive is entitled to no compensation, benefits or other rights or privileges
from the Company.

                (b)            The Company, on its behalf and on behalf of all
affiliated corporations, limited liability companies or partnerships and
stockholders, members, managers, officers, directors, employees, agents,
predecessors, successors, transferees and assigns, does hereby release, dismiss,
covenant not to sue and forever discharges Executive, and his heirs from any and
all actions, causes of action, suits, damages, debts, claims, counterclaims,
obligations and liabilities of whatever nature, known or unknown, including, but
not limited to those actions, causes of action, suits, damages, debts, claims,
counterclaims, obligations and liabilities resulting or arising out of directly
or indirectly the employment relationship between Executive and the Company.
Notwithstanding the forgoing, the Company shall not release Executive from any
obligations, causes of action, actions, suits, damages, or liabilities arising
out of Executive’s obligations set forth in this Agreement or the provisions of
the Employment Agreement incorporated in Paragraph 9 hereof.

 

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2.             No Admission.  Executive agrees and acknowledges that neither
this Agreement nor the Company’s offer to enter into this Agreement should be
construed as an admission by the Company that it has acted wrongfully toward the
Executive or any other employee, and that the Company expressly denies any
liability to, or wrongful acts against the Executive on the part of itself, its
employees or its agents.

3.             Consideration.  (a)  In full consideration for Executive
relinquishing his rights to future employment and cancellation of Executive’s
rights under the Employment Agreement, including his resignation as an officer
and director of the Company, and as a material inducement for signing this
Agreement, CTN will pay or provide to Executive the following: (i) conditioned
upon Executive’s delivery to Holdings of the Repurchase Agreement referred to in
paragraph 3(b) herein below, Executive shall receive, on the closing date of the
sale of MPM pursuant to the terms and conditions of that certain Stock Purchase
Agreement between CTN and MPM Acquisition, Inc. (the “Termination Date”), (A)
any earned by unpaid Base Salary for periods prior to the Termination Date and
(B) one lump sum payment of the lesser of: (1) $175,000 or (2) the Base Salary
remaining payable under the Employment Agreement as of the Termination Date, and
such payment shall not cease or be reduced in the event Executive accepts other
employment; and (ii) CTN shall provide to Executive and his dependents COBRA
coverage under the CTN health plan, at CTN’s expense, provided, that CTN shall
only maintain such insurance coverage until the earlier of August 23, 2002, or
the date Executive accepts other employment and obtains health insurance
coverage. Such payments shall be subject to normal withholdings required by law
and are subject to Executive’s continued compliance with this Agreement.

                (b)           Pursuant to that certain Equity Purchase
Agreement, dated as of July 30, 2000, between Executive, CTN and Holdings, the
Executive received a total of 58.33 Class B Management Units in Holdings, all of
which remain unvested as of the date hereof (the “Units”).  The Units shall be
repurchased, as of the Termination Date, by Holdings.  Upon Holdings’ receipt of
a fully-executed Repurchase Agreement (in substantially the form included
herewith as Exhibit C) from Executive, Holdings shall deliver a check for $58.33
to Executive as payment in full for the Units.  Upon their repurchase, such
Units shall be returned to the Pool (as defined in the Fifth Amended and
Restated Limited Liability Company Agreement of Holdings, dated as of April 5,
2001).  Executive represents and warrants that the Units are owned by Executive
free and clear of all liens, claims or encumbrances.

4.             Taxes. The Executive agrees to indemnify and hold the Company
harmless from any claims, demands, deficiencies, levies, assessments,
executions, judgments or recoveries by any governmental entity against the
Company for any amounts claimed due from Executive on account of this Agreement
or pursuant to claims made under any federal, local or state tax laws, and any
costs, expenses or damages sustained by the Company by reason of any such
claims, including any amounts paid by the Company as taxes, reasonable
attorneys’ fees, deficiencies, levies, assessments, fines, penalties, interest
or otherwise.

5.             Compliance with Law.  Executive hereby acknowledges and agrees
that this Agreement and the termination of his employment or the failure to
offer employment and all actions taken in connection therewith are in compliance
with Title VII of the Civil Rights Act of 1964 and that the release set forth in
Paragraph 1 hereof shall be applicable, without limitation, to any claims
brought under this act.  Executive further acknowledges and agrees that:

                (a)           The release given by the Executive in this
Agreement is given solely in exchange for the consideration set forth in
Paragraph 3 of this Agreement and such consideration is in addition to anything
of value to which the Executive received prior to entering into this Agreement;
and

 

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                (b)           Executive has consulted or has had an opportunity
to consult an attorney prior to entering into this Agreement.

6.             Confidentiality.  (a)              Other than a press release (or
other announcement) mutually agreed upon by the parties hereto, Executive and
the Company agree to keep confidential the terms of this Agreement and the
transactions or events which led to its execution, except to the extent that
disclosure is required by any law, regulation or statute, and Executive and the
Company covenant not to disclose this information to any other person, except
that Executive may disclose the terms of this Agreement to the Internal Revenue
Service, his attorneys, his financial advisors, and his immediate family
members, who shall be informed of the confidential nature of the information, or
as may be required by law.  If either party is compelled to disclose this
Agreement pursuant to service of a subpoena on him, he or it shall immediately
provide written notice to the other party and shall not make any such disclosure
for ten (10) business days in order to give the other party an opportunity to
seek an appropriate protective order, unless disclosure is required sooner than
ten (10) business days by court order, rule, or regulation, in which case
disclosure will not be made by such party before the time required by such court
order, rule, or regulation.

                (b)           Executive agrees that he will not, without the
prior written consent of the Company, make or cause to be made any oral or
written statements to any person, firm, corporation or governmental or other
entity which reflect negatively on the Company or any of its direct and indirect
parents, subsidiaries, affiliates, related companies, successors and assigns, or
on its and their directors, officers, members, and employees, or which could
reasonably be understood to be detrimental to the business interests of the
Company or any of its direct and indirect parents, subsidiaries, affiliates,
related companies, successors and assigns, or to its and their directors,
officers, members, and employees, provided that nothing herein shall restrict
Executive from making any statement in response to inquiry from any governmental
entity, pursuant to subpoena, or as may otherwise be required by law, provided
Executive immediately gives notice to the Company of such inquiry and shall give
the Company the opportunity to challenge such disclosure.

                (c)           The Company, on its behalf and on behalf of its
officers, directors and managers, agrees that it will not, without the prior
written consent of Executive, make or cause to be made any oral or written
statements to any person, firm, corporation or governmental or other entity
which reflect negatively on Executive, or which could reasonably be understood
to be detrimental to the business interests of Executive, provided that nothing
herein shall restrict Company from making any statement in response to inquiry
from any governmental entity, pursuant to subpoena, or as may otherwise be
required by law, provided the Company immediately gives notice to Executive of
such inquiry and shall give Executive the opportunity to challenge such
disclosure.

                (d)           Executive acknowledges that the receipt of the
consideration set forth in Paragraph 3 is conditioned on Executive’s compliance
with this Paragraph 6 and the other terms and provisions of this Agreement.

7.             No Assignment of Claims and No Claim Filed.  Executive represents
and warrants that he has not heretofore assigned or transferred to any person
not a party to this Agreement any claim being released by this Agreement or any
part or portion thereof and that he shall defend, indemnify, and hold harmless
the Company from and against any claim (including the payment of attorneys’ fees
and costs actually incurred whether or not litigation is commenced) based on or
in connection with or arising out of any such assignment or transfer.  Executive
further represents and warrants that neither he nor his attorneys have made any
allegations to, or have filed any complaints, charges, or lawsuits with any
court or government agency relating to any matters being released by Executive
in this Agreement, including

 

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matters arising out of Executive’s employment with the Company or the
termination of such employment, and that neither he nor his attorneys shall file
any complaints, charges, or lawsuits, at any time hereafter, arising out of such
released claims.

8.             Return of Property.  On the Termination Date, Executive, his
attorneys, their agents, and all persons acting on their behalf, shall deliver
to the Company all non-public documents and materials that relate to the
Company, if any, and all property of the Company in his possession or control.

9.             Employment Agreement. (a) The parties hereby agree that the
Employment Agreement (a copy of which is included herewith as Exhibit A) and all
amendments thereto are terminated effective as of the Termination Date, except
the provisions in Sections 5 through 8 thereof shall remain and continue in full
force and effect in accordance with their terms.  Notwithstanding anything
herein to the contrary, Executive agrees that for and in consideration of the
payments received according to Paragraph 3 hereof, (i) for the purposes of
Section 7(a) of the Employment Agreement, the “Non-Compete Period” shall be from
the Termination Date until August 23, 2002 (the “Expiration Date”), and (ii) the
term of Section 7(b) of the Employment Agreement shall continue from the
Termination Date until eighteen months after the Expiration Date.

                (b)           Notwithstanding anything herein to the contrary,
for the purposes of Section 7(b)(ii) of the Employment Agreement, such section
shall not apply to (A) any person who is a former employee of MPM or CTN as of
June 1, 2001, and (B) an employee who has ceased to be an employee of MPM or CTN
for at least six (6) months prior to being hired by Executive.

                (c)           Notwithstanding the forgoing, CTN acknowledges and
agrees that Executive may communicate with Martin Grant, former President and
Chief Operating Officer of CTN, with regards to an employment proposal and other
matters related thereto. CTN further acknowledges and agrees that a subsequent
agreement by Executive and Martin Grant to work together shall not violate
either (i) Section 10(b)(i) or 10(b)(ii) of that certain Employment Agreement
between CTN and Martin Grant, dated as of May 13, 1999, as amended and
terminated in part pursuant to that certain Payment Agreement and General
Release between Martin Grant, CTN and Holdings dated as of January 10, 2001, or
(ii) the provisions of this Agreement and Mr. Grant is hereby deemed a third
party beneficiary of paragraphs 9(b) and 9(c), so long as any such subsequent
agreement does not violate any non-compete or customer non-solicitation
agreement either Executive or Martin Grant has with the Company.

                (d)           Executive hereby resigns as a director of CTN
effective the date the Company delivers executed copies of this Agreement to
Executive (a copy of a Resignation Letter is attached as Exhibit B hereto and
shall be signed in conjunction herewith).  Executive shall resign as an officer
and employee of MPM effective as of the Termination Date (subject to receipt of
the payments described herein).

                10.           Future Equity. Executive hereby waives, cancels
and terminates any right to receive any additional equity or securities in the
Company or related entities.

                11.           Transition.  In consideration for the payments to
Executive pursuant to Paragraph 3 hereof, Executive agrees to be reasonably
available (considering any other personal or business commitments he may have)
for consultations and meetings with employees, investors, and/or customers of
the Company for the purpose of an organized hand-off and smooth transition.

 

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12.           References.  The Company acknowledges and agrees that it will
cooperate with Employee with regard to full and favorable, but truthful (based
upon actual facts of employment) references, which shall be available from Jason
Elkin, Chief Executive Officer of CTN.

13.           Default.  In the event that CTN fails to make payments to Employee
as set forth in Section 3 hereof, and such non-payment has not been cured within
five (5) business days of receipt by CTN of written notice of non-payment,
Employee shall have the right at law or in equity or otherwise to take action or
file litigation against CTN only, and shall have no claim against MPM, to seek
payment of the base salary amounts payable under the Employment Agreement for
termination without cause and all provisions of this Agreement shall remain in
full force and effect with regard to MPM.

14.           Knowledgeable Decision by Executive.  Executive has read all of
the terms of this Agreement and has had an opportunity to discuss it with
individuals of Executive’s own choice who are not associated with the Company.
Executive understands the terms of this Agreement and that, except as otherwise
set forth herein, this Agreement releases forever the Company from any legal
action arising from Executive’s employment relationship, any promises or
agreements with Executive while he was employed at the Company, any rights he
has as a shareholder of CTN or equityholder or member of Holdings, the
termination of his employment relationship or the failure to offer employment
with the Company. Executive signs this Agreement of his own free will in
exchange for the consideration to be given to Executive, which Executive
acknowledges is adequate and satisfactory. Neither the Company nor its agents,
representatives or employees have made any representations to Executive
concerning the terms or effects of this Agreement, other than those contained in
this Agreement.

15.           Choice of Law.  The rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of Georgia, without regard to principles of conflict of
laws.

Signatures begin on the next page.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement this        
day of June, 2001.

 

 

EMPLOYEE:

 

 

 

 

 

/S/ GEOFFREY KANTER

 

GEOFFREY KANTER

 

 

 

MPM:

 

 

 

ARMED FORCES COMMUNICATIONS, INC.

 

 

 

 

 

By:/S/ PAT DORAN

 

Its:/S/ SECRETARY

 

 

 

CTN:

 

 

 

CTN MEDIA GROUP, INC.

 

 

 

 

 

By:/S/NEIL DICKSON

 

Its:CHIEF OPERTING OFFICER

 

 

 

HOLDINGS:

 

 

 

U-C HOLDINGS, L.L.C.

 

 

 

 

 

By:  Willis Stein & Partners, L.P.

 

Its:  Managing Member

 

 

 

 

 

By:  Willis Stein & Partners, L.L.C.

 

Its:  General Partner

 

 

 

 

 

By:  /S/AVY STEIN

 

Its:  Manager

 

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