EX-10.18



 







Exhibit 10.18




 SEPARATION AGREEMENT AND GENERAL RELEASE




     This Separation Agreement and General Release (“Agreement”) is made and entered into by and
between Mark Smith, an individual residing at 31 Hidden Cove Court, Southampton, New York 11968
(the “Executive”) on the one hand, and Town Sports International Holdings, Inc., Town Sports
International, Inc., their parents, subsidiaries, affiliates, and related entities (collectively
referred to as the “Company”) on the other.



W I T N E S S E T H:




     WHEREAS, the Executive and the Company are separating from their employment relationship,
effective March 23, 2006;



     WHEREAS, the Executive has resigned his positions as an officer and director of the Company,
effective March 23, 2006;



     WHEREAS, the Company and the Executive wish to set forth certain understandings in this
Agreement and Release with respect to the Executive’s separation from the Company;



     NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter provided,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Executive, intending to be legally bound, agree as follows:



     1. Payments and Benefits to be Received by the Executive From the Company.



     In exchange for agreeing to and complying with the terms of this Agreement (including the
General Release it contains), the Executive will receive the following payments and benefits:



          (a) The Company will make payments to the Executive at an annual rate equal to his current
base salary, effective January 1, 2006, which is $465,716, through March 31, 2007, less statutory
and other usual or customary payroll deductions such as FICA and Medicare. The payments will be
made in equal installments every two weeks through March 31, 2007;




 









 





          (b) The Company will pay the Executive a bonus for calendar year 2006 (the “Bonus”) at or
about the same time the bonuses for calendar year 2006 are paid to other executives. The amount of
the Bonus shall be based on Company performance and calculated in accordance with the Bonus Bands
attached hereto as Exhibit A;




          (c) The Company shall pay for the Executive and his eligible dependents to continue to
participate in the Company’s group health care benefits through March 31, 2007, on the same basis
and terms as the Company provided to the Executive and his eligible dependants when the Executive
was an active employee;




          (d) The Company will continue to pay the Executive on a biweekly basis an amount equal to his
Executive Car Allowance ($9,217 per year) through March 31, 2007; and




          (e) The Company will provide to the Executive, and his wife, Alexandra Brinsmade, and their
children, a Lifetime Family Premium Passport Membership or the then current highest level
membership, which is valid indefinitely unless Executive is employed by a competing health club in
a metropolitan area where the Company does business after December 31, 2007.




     2. Company Equity Owned By the Executive. The parties intend to enter into a separate
agreement of even date with respect to both the Executive’s ownership of stock in Town Sports
International Holdings, Inc. (“Stock”) and the Executive’s options to purchase Stock (the “Equity
Agreement”). The parties acknowledge and agree that the Equity Agreement is contingent on the
execution of this Agreement.



2









 





     3. The Executive’s Consultancy Obligations.



          (a) In consideration of the payments and benefits to be received by the Executive pursuant to
Section 1(a)-(e), the Executive agrees to serve in good faith as a consultant for the Company
through March 31, 2007 on an as-needed basis as determined by the Company’s CEO and as is mutually
agreed and without additional compensation.




          (b) The Executive agrees that, upon the expiration of the Executive’s period of consultancy
for the Company on March 31, 2007, he will sign a General Release for the period of the consultancy
substantially similar in form to the document attached hereto as Exhibit B if the Company deems it
necessary or appropriate.




     4. Return of Property. 



          (a) The Executive hereby confirms and acknowledges that he has returned to the Company or
destroyed as may be appropriate any and all files or other property (both tangible and
intellectual) of the Company’s (said property includes, but is not limited to, files, monthly
management financial booklets, projections, forecasts, balance sheets, income statements, audited
financial statements, total cost development budgets, actual or prospective purchaser or customer
lists, written proposals and studies, plans, drawings, specifications, reports to creditors, books,
accounts, reports to directors, minutes, resolutions, certificates, bank account numbers,
passwords, rolodexes, credit cards, computers, fax machines, cellular or other telephones, beepers,
PDA’s, keys, deeds, contracts, office equipment and supplies, records, computer disks, any other
documents or things received or acquired in connection with the Executive’s employment with the
Company, etc.) without retaining any copies or extracts thereof.




3









 





          (b) Notwithstanding the above, the Executive is permitted to keep his current Company cell
phone number and will make arrangements to have it transferred to his name as soon as possible and
will reimburse the Company for all charges incurred with respect to that phone number from March
23, 2006 through the date the transfer is effective.




          (c) Notwithstanding the above, the Executive, if he has chosen to do so, is keeping his office
computer, printer, and related accessories.




     5. Resignation From All Offices and Boards of Directors. The Executive represents and
warrants that he will submit the appropriate written documentation to effectuate the resignation of
his positions as an officer and/or a member of Boards of Directors of the Company and any
committees thereto.



     6. The Executive’s Future Conduct and Obligations.



          (a) The Executive, on behalf of himself, his agents, attorneys, heirs, executors,
administrators, and assigns, agrees that he shall not at any time engage in any form of conduct, or
make any statements or representations, that disparage or otherwise impair the reputation,
goodwill, or commercial interests of the Company, its management, stockholders, subsidiaries,
parents, and/or other direct or indirect affiliates. The Executive may truthfully describe to
current employees of the Company the circumstances which led to his leaving the Company.




          (b) The Executive agrees to assist and cooperate with the Company in connection with the
defense or prosecution of any claim that may be made against or by the Company, or in connection
with any ongoing or future investigation or dispute or claim of any kind involving the Company,
including any proceeding before any arbitral, administrative,




4









 




judicial, legislative, or other body or agency, including preparing for and testifying in any
proceeding to the extent such claims, investigations or proceedings relate to services performed or
required to be performed by the Executive, pertinent knowledge possessed by the Executive, or any
act or omission by the Executive. The Executive further agrees to perform all acts and execute and
deliver any documents that may be reasonably necessary to carry out the provisions of this
subsection. The time spent pursuant to this Section shall count as time spent pursuant to Section
3(a) hereof. For reasonable time spent pursuant to this section after March 31, 2007, the
Executive shall be compensated at a rate of $300 per hour. Upon submission of appropriate written
documentation, the Company shall reimburse the Executive for reasonable, pre-approved expenses
incurred in carrying out the provisions of this paragraph.




     7. General Release.



          (a) The Executive, with the intention of binding himself, his agents, attorneys, heirs,
executors, administrators and assigns, does hereby irrevocably and unconditionally release, acquit,
remise and forever discharge the Company, its subsidiaries, parents, and other direct or indirect
affiliates, as well as each of their respective stockholders, partners, heirs, executors,
administrators, agents, employees, officers, directors, successors, insurers, assigns and
attorneys, of and from any and all manner of actions, cause or causes of action, suits, debts, sums
of money, costs, interests, attorneys’ fees, liabilities, contracts, accounts, reckonings, bonds,
bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, charges, claims, counterclaims and demands, whatsoever, in law or in equity
or otherwise, that the Executive now has or may have, whether mature, direct, derivative,
subrogated, personal, assigned, both known and unknown, foreseen or unforeseen, contingent or
actual, liquidated or unliquidated, arising from the beginning of the world until the date that the




5









 




Executive signs this Agreement, including, but not limited to, any claims arising in any way
out of his hiring by the Company, his employment with the Company, or his separation from the
Company. The Executive hereby expressly waives the benefits of any statute or rule of law which,
if applied to this General Release, would otherwise exclude from its binding effect any claims not
now known by the Executive to exist. The foregoing release of claims by the Executive includes,
but is not limited to, any and all claims for damages, attorneys’ fees, or costs under the Age
Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621 et seq., the Americans with Disabilities
Act (“ADA”), 42 U.S.C. § 12101 et seq., the Civil Rights Act of 1991, 42 U.S.C. § 1981a et seq.,
the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., the Family and Medical Leave Act (“FMLA”), Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Sarbanes-Oxley Act of 2002, the
United States Constitution, the Constitution of the State of New York, or of any other state or
country, the New York Human Rights Law, the New York City Civil Rights Act, and all other similar
federal, state, or municipal statutes or ordinances prohibiting discrimination or pertaining to
employment, and any contract, tort, or common law theories with respect to the Executive’s hiring
by the Company, the terms and conditions of his employment with the Company, and his separation
from the Company.




          (b) The Company and the Executive acknowledge and agree that the General Release set forth in
subsection 7(a) above does not in any way affect the rights of either party to take whatever steps
may be necessary to enforce the terms of this Agreement or the Equity Agreement or to obtain
appropriate relief in the event of any breach of the terms of such Agreements.




6









 





     8. No Existing Suit. The Executive represents and warrants that, as of the Effective
Date of this Agreement, he has not filed or commenced any suit, claim, charge, complaint, action,
arbitration, or legal proceeding of any kind against the Company.



     9. No Participation in Third Party Civil Litigation. The Executive agrees and
promises not to voluntarily participate, without receiving the prior written approval of the
Company, in any pending or future civil case, arbitration, agency proceeding, or other legal
proceeding brought against the Company by a third party (“Third Party Civil Litigation”) with
respect to any issues whatsoever. The Executive also agrees that he will not intentionally cause,
encourage, or participate in any Third Party Civil Litigation maintained or instituted against the
Company. Specifically, among other things, this Section is intended to preclude the Executive from
(a) voluntarily providing any party involved in a Third Party Civil Litigation, as defined above,
against the Company with any statement, oral or written, sworn or unsworn, to be used in connection
with that Third Party Civil Litigation and/or (b) voluntarily appearing for the purpose of
providing deposition or trial testimony at such party’s request without the prior written approval
of the Company.



     10. Release by the Company. The Company does hereby irrevocably and unconditionally
release, acquit, remise and forever discharge the Executive, his agents, attorneys, heirs,
executors, administrators and assigns, of and from any and all manner of actions, cause or causes
of action, suits, debts, sums of money, costs, interests, attorneys’ fees, liabilities, contracts,
accounts, reckonings, bonds, bills, specialties, covenants, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, charges, claims, counterclaims and demands,
whatsoever, in law or in equity or otherwise, (i) the facts of which are known by the Company as of
the date this Agreement, and (ii) for those matters the facts of which are not



7









 




known by the Company as of the date of this Agreement or which are not yet ripe;
provided, however, notwithstanding the generality of the foregoing, for purposes of
clause (ii) above, nothing herein will be deemed to release the Executive from any acts or
omissions constituting gross negligence or willful misconduct.




     11. Covenant Not to Compete. In consideration of the payments and benefits received
pursuant to Section 1 above, the Executive agrees that through August 15, 2007, he shall not
directly or indirectly own, manage, control, participate in, consult with, be employed by, render
services for, or in any manner engage in, any business competing directly or indirectly with the
business as now or hereafter conducted by the Company or the businesses which are logical
extensions of the Company’s current business, within any metropolitan area in which the Company
engages or has definitive plans to engage in such business as of the date hereof; provided, that
the Executive shall not be precluded from purchasing or holding publicly traded securities of any
such entity so long as the Executive shall hold less than 2% of the outstanding units of any such
class of securities and has no active participation in the business of such entity.



     12. Covenant Not to Solicit Employees. In consideration of the payments and benefits
received pursuant to Section 1 above, the Executive agrees that through August 15, 2007, he shall
not: (i) induce or attempt to induce any employee or consultant of the Company to leave the employ
or services of the Company, or in any way interfere with the relationship between the Company and
any employee or consultant thereof; or (ii) hire any person who was an employee of the Company at
any time during Executive’s employment period for a position which would compete with the business
of the Company in the Company’s markets as of the date hereof, except for such employees who have
been terminated for at least six months.



8









 





     13. Covenant Not to Solicit Customers, Vendors, etc. In consideration of the payments
and benefits received pursuant to Section 1 above, the Executive agrees that through August 15,
2007, he shall not, directly or indirectly: (i) solicit or attempt to enter into a contractual
relationship with any customer, supplier, vendor, licensee, franchisee or other business relation
of the Company, which relationship will have an impact on the Company in a market in which the
Company does business on the date hereof, without prior approval from the Company; or (ii) induce
or attempt to induce any customer, supplier, vendor, licensee, franchisor or other business
relation of the Company to cease doing business with the Company, or in any way interfere with the
relationship between any such customer, supplier, vendor, licensee, franchisor or business
relation, on the one hand, and the Company, on the other hand.



     14. Nondisclosure of Confidential Information. The Executive acknowledges and agrees
that, in the course of his employment with the Company, he has acquired certain Confidential
Company Information which the Executive knew or understood was confidential or proprietary to the
Company and which, as used in this Agreement, means: information belonging to or possessed by the
Company which is not available in the public domain, including, without limitation, (a) information
received from the customers, suppliers, vendors, employees, or agents of the Company under
confidential conditions; (b) confidential account information regarding customers of the Company;
(c) the Company’s confidential accounting, tax, or financial information results, procedures and
methods; and (d) other confidential technical, marketing, or business information, or policies
received because of the Executive’s employment by the Company. The Executive understands and
agrees that such Confidential Company Information has been disclosed to the Executive for the
Company’s use only. The Executive understands and agrees that he: (i) will not disclose or
communicate Confidential Company Information to any



9









 




person or persons except that the restrictions in this sentence will only apply with respect
to clause (d) above with respect to the Company’s markets as of the date hereof; and (ii) will not
make use of Confidential Company Information on the Executive’s own behalf, or on behalf of any
other person or persons except that the restrictions in this sentence will only apply with respect
to clause (d) above with respect to the Company’s markets as of the date hereof. The Executive
agrees to give immediate written notice to the Company at Town Sports International, Inc., 888
Seventh Avenue, 25th Floor, New York, NY 10106, Attn: Robert S. Herbst, Esq., Vice
President & General Counsel, with a copy to Brian S. Cousin, Esq., Greenberg Traurig LLP, 200 Park
Avenue, New York, New York 10166 in the event he is ordered by a court or otherwise compelled by
law to reveal any Confidential Company Information to any third party. In view of the nature of
the Executive’s employment and the nature of the Confidential Company Information he has had access
to, the Executive agrees that any unauthorized disclosure to any person or persons of Confidential
Company Information, or other violation or threatened violation of this Agreement, will cause
irreparable damage to the Company and that, therefore, the Company shall be entitled to an
injunction prohibiting the Executive from any further disclosure, attempted disclosure, violation,
or threatened violation of this Agreement.




     15. Certain Forfeitures in Event of Breach or Other Liability to the Company. The
Executive acknowledges and agrees that, notwithstanding any other provision of this Agreement, in
the event the Executive breaches any material obligation under this Agreement, which breach has a
material impact on the Company, or there is a final determination by a Court of competent
jurisdiction, or an agreement by the Executive as part of a settlement, that the Executive is
otherwise liable to the Company, the Company retains the right to recoup any and all payments and
benefits provided for in Section 1 of this Agreement, any damages suffered by



10









 




the Company, plus reasonable attorneys’ fees incurred in connection with such recovery and, to
the extent that such payments and/or benefits have not been fully disbursed to the Executive, the
Company reserves its rights to stop all future disbursements of such payments and/benefits.




     16. Internal/External Announcement. The parties agree to work together in good faith
to jointly draft mutually agreeable language for any internal and external announcements regarding
the Executive’s separation from the Company.



     17. Confidentiality of this Agreement. Except as discussed in Sections 6(a) and 16
above, the Executive, on behalf of himself and his agents, attorneys, heirs, executors,
administrators, and assigns, agrees that this Agreement, and any and all matters concerning his
separation from the Company, will be regarded as confidential communications between the parties,
and that he will not reveal, disseminate by publication of any sort, or release in any manner or
means this Agreement or any matters, factual or legal, concerning this Agreement to any other
person, nor to any members of the public, newspaper, magazine, radio station, television station,
cable TV operation, Internet, or other mass communications medium, except as required by law or
legal process (in which case(s), the Executive agrees to forthwith provide immediate written notice
of said legal process to the Company as set forth below prior to the production of the requested
information). Notwithstanding the language above, the Executive is permitted to disclose the terms
of this Agreement to his immediate family members, attorneys, financial advisors, and/or
accountants as long as such individuals are informed of and agree to be bound by the terms of this
confidentiality provision.



     18. Entire Agreement. Except as stated herein, this Agreement and the Equity
Agreement set forth the entire agreement of the parties and supersedes all prior promises or
agreements made by, to, or between the parties, whether oral or written. This Agreement may



11









 




not be amended except by a writing signed by both parties. There are no other promises,
agreements, or commitments made by, to, or between the parties, other than those set forth in the
written text of this Agreement.




     19. No Transfer by Executive. The Executive represents and warrants that he has not
sold, assigned, transferred, conveyed or otherwise disposed of to any third party, by operation of
law or otherwise, any action, cause of action, suit, debt, obligations, account, contract,
agreement, covenant, guarantee, controversy, judgment, damage, claim, counterclaim, liability or
demand of any nature whatsoever relating to any matter covered by this Agreement. This Agreement is
personal to the Executive and he may not assign, pledge, delegate or otherwise transfer any of his
rights, obligations or duties under this Agreement.



     20. Choice of Law, Jurisdiction, Venue. This Agreement shall be governed by,
construed in accordance with, and enforced pursuant to the laws of the State of New York without
regard to principles of conflict of laws. The parties hereto waive any defense of lack of
jurisdiction or venue as not being a resident of New York County, New York, and hereby specifically
authorize any action brought by either party to this Agreement to be instituted and prosecuted in
either the Supreme Court of the State of New York, County of New York, or in the United States
District Court for the Southern District of New York, at the election of the party bringing such
action.



     21. Counterparts. This Agreement may be executed in counterparts, each of which
together constitute one and the same instrument.



     22. Notices. Any notice to be given hereunder shall be delivered as follows: (a) in
the case of the Company, by both electronic mail and first class mail delivery, or delivery by a
recognized overnight commercial courier which guarantees delivery to the addressee by the end



12









 




of the next business day, addressed to Robert S. Herbst, Esq., Vice President & General
Counsel, Town Sports International, Inc., 888 Seventh Avenue, 25th Floor, New York, NY
10106 (email address: Robert.Herbst@town-sports.com), with a copy to Brian S. Cousin, Esq.,
Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166 (email address:
cousinb@gtlaw.com); and (b) in the case of the Executive, by both electronic mail and first class
mail delivery, or delivery by a recognized overnight commercial courier which guarantees delivery
to the addressee by the end of the next business day, addressed to both (i) 31 Hidden Cove Court,
Southampton, New York 11968 and (ii) c/o Alan and Jane Smith, Herbert Gardens, Apt. 13D, 186 The
Terrace, Wellington, New Zealand (email address msmith1155@gmail.com). Notices served by mail
shall be deemed given when they are mailed.




     23. Nonadmissibility. Nothing contained in this Agreement, or the fact of its
submission to the Executive, shall be admissible evidence against the Company in any judicial,
administrative, or other legal proceeding (other than an action for breach of this Agreement), or
be construed as an admission of any liability or wrongdoing on the part of the Company of any
violation of federal, state, or local statutory law, common law or regulation.



     24. Knowing and Voluntary Waiver. By signing this Agreement, the Executive expressly
acknowledges and agrees that (a) he has carefully read it and fully understands what it means; (b)
he is hereby advised in writing to discuss this Agreement with an Attorney before signing it; (c)
he has been given at least 21 calendar days to consider this Agreement; (d) he has agreed to this
Agreement knowingly and voluntarily and was not subjected to any undue influence or duress; (e) he
may revoke his acceptance of this Agreement within seven (7) days after he signs it by sending
written Notice of Revocation as set forth below; and (f) on the eighth day after he signs this
Agreement, this Agreement becomes effective and enforceable. The



13









 




parties agree that the Executive may revoke this Agreement within seven (7) days after the
Executive executes the Agreement. Any revocation within this period must be submitted, in writing,
to Robert S. Herbst, Esq., Vice President & General Counsel at Town Sports International, Inc., 888
Seventh Avenue, New York, NY 10106, stating “I hereby revoke my acceptance of our Agreement.” The
revocation must be personally delivered to Mr. Herbst or mailed to him and postmarked within seven
(7) days of the Executive’s execution of the Agreement. If the last day of the revocation period
is a Saturday, Sunday, or legal holiday, the revocation period shall be extended to the following
day which is not a Saturday, Sunday, or legal holiday. The Executive agrees that if he does not
execute the Agreement or, in the event of revocation, he will immediately return to the Company any
of the additional payments or benefits provided to him by the Company pursuant to this Agreement.




     25. Review Time; Effective Date. This Agreement shall not become effective or
enforceable until seven (7) days after the date of execution by the Executive (the “Effective
Date”).



     26. Arbitration of Disputes. Any controversy or claim arising out of or relating to
this Agreement shall be finally settled by arbitration conducted in accordance with the Arbitration
Rules of JAMS. The arbitration shall be conducted in New York City. Judgment upon the arbitration
award may be entered in any court having jurisdiction over the parties. The parties may conduct
discovery in aid of the arbitration in accordance with the Federal Rules of Civil Procedure. The
arbitration award shall be in writing and shall specify the factual and legal bases of the award.
Each of the parties reserves the right to file with a court of competent jurisdiction an
application for temporary or preliminary injunctive relief.



14









 





     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement and Release
as of the day and year set forth below.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Town Sports International Holdings, Inc.
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	As of March 23          ,2006
	 	 	 	By:
	 	/S/ RICHARD PYLE
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Richard Pyle
	 

	 	 	 	 	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Town Sports International, Inc.
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	As of March 23          , 2006
	 	 	 	By:
	 	/S/ RICHARD PYLE
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name: Richard Pyle
	 

	 	 	 	 	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/S/ MARK SMITH
	 	 	 	 	 	 	 
	Dated:	 	As of March 23          , 2006	 	 	 	Mark Smith
	 

	 	 	 	 	 	 	 	 





[Signature Page to Separation Agreement and Release]





 









 









EXHIBIT A




BONUS BANDS




	 	 	 
	Incentive Bonus

	 	                                         
                          
                 Mark Smith






Year 2006 bonus range:




Ebitda




	 	 	 	 	 	 	 	 	 
	 	 	% of Budget	 	 	Bonus	 
	$72,971 Minimum return on capital invested
	 	 	77	%	 	$	200,000	 
	95,184 Budget
	 	 	100	%	 	$	540,000	 
	99,943 5% over budget
	 	 	105	%	 	$	560,000	 
	104,702 10% over budget
	 	 	110	%	 	$	621,000	 
	109,461 15% over budget
	 	 	115	%	 	$	645,000	 






1) Definition of Ebitda to exclude extraordinary or non-recurring items and deferred compensation expense.




2) Between, or above bands, bonus pool is allocated on a pro rata basis.




A-1









 





EXHIBIT B




GENERAL RELEASE




     In exchange for good and valuable consideration provided for in the Separation Agreement and
General Release between Mark Smith (“Mr. Smith”) and Town Sports International Holdings, Inc., Town
Sports International, Inc., their parents, subsidiaries, affiliates, and related entities, dated
March 23, 2006, (the “Separation Agreement”), the receipt and sufficiency of which is hereby
acknowledged, and to supplement the General Release in the Separation Agreement, Mr. Smith, with
the intention of binding himself, his agents, attorneys, heirs, executors, administrators and
assigns, does hereby irrevocably and unconditionally release, acquit, remise and forever discharge
Town Sports International, Inc., its parent, subsidiaries, affiliates, and related entities, as
well as each of their respective stockholders, partners, heirs, executors, administrators, agents,
employees, officers, directors, successors, insurers, assigns and attorneys (the “Releasees”), of
and from any and all manner of actions, cause or causes of action, suits, debts, sums of money,
costs, interests, attorneys’ fees, liabilities, contracts, accounts, reckonings, bonds, bills,
specialties, covenants, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, charges, claims, counterclaims and demands, whatsoever, in law or in equity
or otherwise, that Mr. Smith now has or may have, whether mature, direct, derivative, subrogated,
personal, assigned, both known and unknown, foreseen or unforeseen, contingent or actual,
liquidated or unliquidated, arising from March 23, 2006 until the date that Mr. Smith signs this
Agreement, covering any claims arising from this period with respect to Mr. Smith’s relationship
with the Releasees. Mr. Smith hereby expressly waives the benefits of any statute or rule of law
which, if applied to this General Release, would otherwise exclude from its binding effect any
claims not now known by Mr. Smith to exist. The foregoing release of claims by Mr. Smith includes,
but is not limited to, any and all claims for damages,



B-1









 




attorneys’ fees, or costs under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §
621 et seq., the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101
et seq., the Civil Rights Act of 1991, 42 U.S.C. § 1981a et seq.,
the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.,
the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., the Family and
Medical Leave Act (“FMLA”), Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et
seq., the Sarbanes-Oxley Act of 2002, the United States Constitution, the Constitution of
the State of New York, or of any other state or country, the New York Human Rights Law, the New
York City Civil Rights Act, and all other similar federal, state, or municipal statutes or
ordinances prohibiting discrimination or pertaining to contract, tort, or common law theories with
respect to Mr. Smith’s relationship with the Releasees from March 23, 2006 through the signing of
this General Release. For the avoidance of doubt, this General Release is not intended to cover
claims which may have arisen under the Equity Agreement.




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Dated:

	 	                                        , 2006
	 	 	 	Mark Smith






B-2