Settlement And Lease Agreement

SETTLEMENT AND LEASE AGREEMENT


This Settlement and Lease Agreement ("Agreement") is made and entered into as of June 17, 1994, by and between SHELDON KASOWER ("Kasower") and MEMBERSHIP DEVELOPMENT, INC. ("MDI"), on the one hand and SPORTS-TECH, INC. ("Sports-Tech"), on the other hand.


RECITALS


A. Since on or about August 31, 1992, MDI has provided marketing consulting and related services to Sports-Tech. Kasower, in his capacity as Chairman of MDI, was involved in such marketing consulting and related services.


B. Pursuant to the arrangements for MDI to provide such services, Sports-Tech has made certain payments to MDI and has undertaken to issue certain shares of Sports-Tech's common stock to MDI in consideration of those services.


C. Disputes have arisen about the nature and terms of the parties' relationship, and the parties have agreed to resolve all disputes and claims between them under the terms of this Agreement.


NOW THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:


AGREEMENTS


1. Termination of All Existing Arrangements. Upon execution of this Agreement, the parties shall have no further obligations to each other except as specified in this Agreement. All arrangements for MDI to provide services of any kind to Sports-Tech are terminated by mutual consent effective June 30, 1994, and MDI shall have no further authority to act on behalf of Sports-Tech. MDI represents and warrants that it has not made any commitment or incurred and obligation on behalf of Sports-Tech on or after June 1, 1994.


2. Ownership of Equipment. MDI shall retain possession of and is hereby granted all of Sports-Tech's right, title and interest in the computer equipment and software now in MDI's possession. The equipment is accepted by MDI "as is and where is." Sports-Tech gives no warranty whatsoever to MDI about such equipment, including any warranties of merchantability, quality or fitness.


3. Ownership of Products and Services. All products, services, intellectual property, data bases, goodwill, enhancements, trademarks, copyrights and other materials developed by MDI for Sports-Tech relating to the High School Athletic Pool, the Collegiate Athletic Network and Sports-Tech Sports Cards ("the Properties") are and remain the exclusive property of Sports-Tech. MDI acknowledges that it has no rights whatsoever in the Properties.


4. MDI's Covenant Not to Compete. In consideration of the payment by Sports-Tech to MDI of the Sum of One Hundred Forty-Four Thousand Dollars ($144,000) in the manner specified in Paragraph 5, below, and in consideration of the shares issued pursuant to Paragraph 7, below, MDI agrees that neither it nor any of its officers, directors or shareholders shall, at any time during the period from the date of this Agreement until June 30, 1997, in the United states or its territories and possessions:


(a) Accept employment with, become involved with, or otherwise engaged, directly or indirectly, in any business or venture involving development, marketing or manufacturing of sports video editing systems or products or services substantially identical to the Properties ("a Competitive Business");


(b) Solicit directly or indirectly customers or former customers of Sports-Tech with the intent or effect of making them customers of a substantially identical Competitive Business through the use of customer lists or other devices which involve identification of present or former customers as such; or


(c) For the purposes of employment in any substantially identical Competitive Business, entice or offer employment to any employee who at that time is employed by Sports-Tech.


These restrictions do not preclude MDI or its officers, directors and shareholders from involvement in any other sports-related business which is not a Competitive Business.


5. Installment Note Payable to MDI. Sports-Tech shall pay to MDI the sum of Six Thousand Dollars ($6,000) per month for twenty-four (24) consecutive months, beginning July 1, 1994. This obligation shall be evidenced by Sports-Tech's unsecured promissory note in the amount of One Hundred Forty-Four Thousand Dollars ($144,000), bearing no interest, in the form of Exhibit 1 attached hereto. Payments shall be sent by Sports-Tech on the first business day of each month to MDI at 23501 Park Sorrento, Suite 102, Calabasas, CA 91302, or to such other address as MDI shall designate in writing. If any monthly payment is not received by MDI by the seventh (7th) day of any month, then MDI shall notify Sports-Tech by facsimile that the payment is past due. After such notice, the promissory note shall be in default unless the overdue monthly payment is transmitted to MDI by any method and received by


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MDI on or before the fifteenth (15th) day of the month or unless the monthly payment is transmitted by MDI by Sports-Tech via overnight courier service on the fifteenth (15th) day of the month providing for delivery to MDI the following business day. In the event of such default, MDI may accelerate the balance due.


6. Cancellation of All Options and Warrants. All warrants and options held by MDI with respect to any shares of Sports-Tech's common stock are hereby canceled by mutual agreement.


7. Issuance of Shares to MDI. Concurrently with the execution of this Agreement, Sports-Tech shall deliver 100,000 unregistered shares of Sports-Tech's common stock, represented by Certificate No. SPTK 1009, dated June 9, 1994. Upon execution of this Agreement, Sports-Tech shall instruct its transfer agent to immediately issue and deliver to MDI 150,000 additional unregistered shares of Sports-Tech's common stock. Sports-Tech shall cause its counsel to file a registration statement with the SEC as to these 250,000 unregistered shares ("the Shares") not later than sixty (60) days after the date of filing Sports-Tech's Form 10-K for the fiscal year ended June 30, 1994. MDI represents and warrants that it is acquiring the Shares for its ...