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-,44" FsC4 1 s". tw3ok • • EXECUTED ORIGINAL LOCATED SR&Z VAULT kle3 Z cads „ -'3st Nkfteid SEPARATION AGREEMENT Dated: November30 , 2000 between MORTIMER B. ZUCKERMAN and MARLA PRATHER 678657.13 • EFTA00306319 • TABLE OF CONTENTS Pace 1. Consideration 2 2. Separation. .2 3. No interference 2 4. Custody and Visitation. 2 5. Financial Provisions for the Child. 11 6. Distributive Award to the Wife. 21 7. Division of Property 24 8. Health Insurance for the Wife 39 9. Professional Fees. 39 10. Therapy 40 11. Other Property .40 12. Violation of Relocation Restriction. 41 13. Satisfaction of Claims 44 14. Estate Matters 44 15. Income Taxes .46 16. Voluntary Payments 47 17. Debts 47 18. Mutual Releases 47 19. Reconciliation and Matrimonial Decrees 48 20. Confidentiality. 49 21. Binding Arbitration. 52 22. Counsel Fees in the Event of Default. 54 23. Limitation on Penalties 55 24. Notice 55 25. Disclosure of Assets 56 26. General Provisions 58 Acknowledgments Exhibit A 678657.13 EFTA00306320 SEPARATION AGREEMBNT This Agreement made and entered into as of thislilay of Muon.644 , 2000, by and between MORTIMER B. ZUCKERMAN (hereinafter the "Husband"), residing at 950 Fifth Avenue, New York, New York 10021 and MARLA PRATHER (hereinafter the "Wife"), residing at 238 East 49th Street, New York, New York 10017. NyzinEaagia. WHEREAS, the parties hereto entered into a Prenuptial Agreement dated September 25, 1996 (the "Prenuptial Agreement"), which both parties acknowledge is,a valid agreement; WHEREAS, the parties hereto were married on September 27, 1996 in Washington, D.C., and ever since their marriage have been, and still are, Husband and Wife; WHEREAS, there is one child of the marriage: Abigail Zuckerman, born on July 7, 1997 (the "Child"); WHEREAS, the parties have agreed to separate; WHEREAS, the parties desire that this Agreement, which is entered into after due and considered deliberation, shall be and constitute an agreement between them with respect to any income, assets or property, both real and personal, wherever situate, now owned by the parties, or either of them, or outstanding in their respective names, or which may hereafter be acquired by either of the parties, and with respect to all other rights and obligations arising out of their marital relationship; WHEREAS, the parties intend that this Agreement shall supersede the Prenuptial Agreement, which shall hereafter be null and void; and 678657.13 EFTA00306321 WHEREAS, both parties have been informed regarding the estate, income and financial responsibilities of each other and have been flatly advised of all of their rights by independent counsel of their own selection. NOW, THEREFORE, the parties hereby agree as follows: 1. Consideration. The consideration for this Agreement is the mutual promises and agreements herein contained. 2. Lmatornaf. From and after the date hereof, the Husband and the Wife may and shall at all times hereafter live separate and apart from the other and free from the marital control and authority of the other as if each were sole and unmarried and free from any control, restraint or interference, direct or indirect, by the other. Each may reside at such place or places as he or she may select, except as provided in Section 4(A) hereof. 3. No interference. Neither party shall molest, annoy, harass or interfere with the other, or compel or endeavor to compel the other to cohabit or dwell with him or her by any legal or other proceeding for the restoration of conjugal rights or otherwise. There shall be no direct or indirect interference with the personal life, habits or associations of the other. 4. Custody and Visitation. A. The Husband and Wife shall have joint legal custody of the Child and shall have the joint authority to make all decisions relating to the care and upbringing of the Child. The parties shall confer with each other with respect to all matters relating to the Child's health, safety, welfare, education and upbringing, with a view toward arriving at a harmonious policy calculated to promote the Child's best interests and welfare. With respect to all important decisions including, without limitation, educational and non-emergency medical decisions for the Child, the parties will confer with each other and, if appropriate, the Child and a therapist or 678657.13 -2- EFTA00306322 other caring professional and shall make every effort to arrive at a mutual agreement. If the parties are unable to arrive at a mutual agreement with respect to any such decision, the parties will mutually select a third party to make such decision, which shall be final and binding on all persons interested in this Agreement. If the parties cannot mutually select such third-party decisionmaker within twenty (20) days from the date that such decision is to be made, each party shall select a third party and such selected individuals shall, within twenty (20) days from the date of their selection, select a third individual to serve alone as such third-party decisionmaker. The Husband and the Wife shall share equally all expenses incurred in connection with the selection and use of such third-party decisionmaker, including, without limitation, such decisionmaker's professional fees. It is the intention of the parties to work together in every way for the benefit of the Child and to foster an environment of harmony, love and care where the Child is encouraged to maintain close and loving relationships with both parents. In order to effectuate such intention, until the Child reaches age twenty-one (21) or graduates from college, whichever is earlier, the Wife agrees not to move her primary residence to a location that is more than fifty (50) miles from the Whitney Museum of American Art, New York, New York without the prior written consent of the Husband (the "Relocation Restriction"). For all purposes of this Agreement, the term "primary residence" shall mean the residence from which the Child attends school or, if the Child is away at boarding school, college or any other undergraduate institution, the residence that the Child primarily returns to during vacation periods. B. The Wife's residence shall be the Child's primary physical residence. It is understood and agreed upon by the parties that the Husband shall have flexible, liberal visitation with the Child outside of the home of the Wife as the parties shall agree. Both 678651A3 - 3 - EFTA00306323 the Husband and the Wife deem it to be in the Child's best interest to spend as much time as possible with both of her parents and both parties shall encourage the Child to spend time with the other party. To that end, the parties agree to work together to determine an appropriate, generous visitation schedule. C. Each party has the right to request a reevaluation of the visitation schedule at the beginning of each school year. Any such reevaluation shall be conducted with the assistance and advice of a marital counselor or other independent party. D. 1. If the parties shall be unable to agree upon a visitation schedule, the Husband shall be entitled to at least the visitation set forth below: (a) Every other wceicend from 5:00 p.m. on Friday to Monday morning, at which time the Husband shall take the Child to school (or return her to the Wife or her child care provider by 10:00 am. or to day camp or another scheduled activity if school is not in session). If a weekend visit shall occur during a Monday holiday weekend such as Columbus Day or President's Day, visitation shall instead end on Tuesday morning. Notwithstanding the foregoing, if the parties so agree, the Child may be returned to the Wife or her child care provider directly after dinner on Sunday evening (or Monday evening of a holiday weekend, as the case may be), provided, however, that if the Child is returned to the Wife or her child care provider on a Sunday evening (or Monday evening, as the case may be), the Husband shall be entitled to spend an additional weekday evening with the Child at another time upon five (5) days' notice to the Wife. It is understood and agreed upon by the parties that whenever the Husband is obligated hereunder to return the Child to the Wife or her child care provider "directly after dinner," the Husband agrees to use his best efforts to schedule his dinners with the 678657.13 -4- EFTA00306324 Child at a time that will enable him to return the Child to the Wifc at least one (1) hour before the Child's bedtime. 4 1 1 1 1 1 1 1 1 (b) Two (2) weekday evenings (minimum three (3) hours duration, including dinner) per week to be agreed upon by the parties. Except as provided herein with respect to overnight visits, a weekday evening visit shall end directly after dinner, at which time the Husband shall return the Child to the Wife or her child care provider. Until the Child reaches age six (6), such weekday evening visits shall include one (1) overnight visit each week. After the Child reaches age six (6), such overnight visits shall increase to two(2) per week in each week prior to a weekend when the Wife has the Child. An overnight visit shall be defined as the time period from 5:00 p.m. until directly after dinner the following evening, at which time the Husband shall return the Child to the Wife or her child care provider. During the daytime portion of an overnight visit, the Husband shall be responsible for taking the Child to and picking her up from school (or day camp or another scheduled activity if school is not in session). Notwithstanding the foregoing, the Husband acknowledges that his schedule from time to time may not permit him to be present for a previously scheduled dinner or overnight visit with the Child. In that event, the Wife agrees to use her best efforts to rearrange her schedule and the Child's schedule to enable the Husband to have such dinner or overnight visit with the Child on another day that week. If the Wife cannot reasonably rearrange such schedules, the Husband agrees to waive his rights to such dinner or overnight visit for that week. (c) (1) One-half (1/2) of all school vacations (other than summer vacation). (ii) One-half (1/2) of the academic summer vacation period, provided that if the Child attends a summer sleepaway program, structured day 678657.13 - 5 - EFTA00306325 camp, summer school or sports program, or travels with individuals other than a parent or works during the summer, the Husband shall be entitled to approximately one-half (1/2) of the remaining summer vacation period. (iii) Notwithstanding the foregoing, until the Child reaches age ten (10), the Husband and Wife agree that neither of them shall take the Child on vacation for more than one (1) week at a time without obtaining the prior consent of the other party, which shall not be unreasonably withheld. The Husband and Wife also agree that the length of a vacation with the Child may be expanded to ten (10) days after the Child reaches age ten (10) and to two (2) weeks after the Child reaches age fourteen (14). (d) All major Jewish holidays (j.e., Rosh Hashanah, Yom Kippur, the first two nights of Passover and two nights of Chanukah). (e) The Husband's birthday, Father's Day and one-half (1/2) of the Child's birthday. 2. In clarification of the parties' intentions regarding the minimum visitation schedule set forth in Paragraph 1 of this Subdivision D, the parties agree as follows: (a) The Child will spend the Thursday through Sunday of Thanksgiving holidays with each of the Husband and the Wife in alternate years. (b) With respect to weekend visits, at the beginning of each calendar year, the parties agree to use their best efforts to arrange their weekend visitation schedule so that each party will spend an approximately equal number of Monday holiday weekends (such as Columbus Day or President's Day) with the Child in that calendar year. 678657.13 -6- EFTA00306326 (c) As to summer vacation, at any time when neither the Husband nor the Wife is vacationing with the Child outside of the area encompassed by the Relocation Restriction, the Husband and the Wife shall follow the visitation schedule applicable during the academic year. (d) (i) With respect to vacations to be taken with the Child by either the Husband or the Wife outside of the area encompassed by the Relocation Restriction, during each odd numbered year, commencing with 2001, the Wife shall have the first choice of which vacation periods the Child shall be with her and she shall notifrthe Husband in writing no later than January 15th of each such year for the first six (6) months of such year and no later than June 15th of each such year for the second six (6) months of such year. In even numbered years, commencing with 2002, the Husband shall have the right to choose first which vacation periods the Child shall be with him. The Husband shall notify the Wife of such choice for the first six (6) months of such year in writing no later than January 15th of each such year and for the second six (6) months of such year no later than June 15th of each such year. In any year in which a party fails to give the notice above required as to the choice of vacation periods, the other party shall have the right to make the first choice and shall send appropriate notice no later than January 30th of such year with respect to the first six (6) months of such year and June 30th of such year with respect to the second six (6) months of such year. (ii) The partied agree to work together to arrive at an equitable division of the remaining holidays and vacation periods in the year 2000. 3. (a) The parties agree that the Husband shall not exercise his visitation rights with the Child on the day before Christmas (including Christmas Eve), Christmas day, Easter, the Wife's birthday, Mother's Day and three (3) additional days to 678657.13 -7- EFTA00306327 be selected by the Wife. The Wife shall give the Husband written notice of which three (3) additional days she wishes to spend with the Child no later than ninety (90) days after the beginning of each calendar year. (b) The parties agree that the Husband shall not exercise his visitation rights with the Child during such times as the Child shall be on vacation with the Wife. (c) The parties agree that the Husband and the Wife shall both use their best efforts to share equally the responsibility of taking the Childito and from school (or day camp or another scheduled activity if school is not in session). To that end, the parties agree that they shall work together to arrange a reasonable schedule that provides appropriate coverage for the Child. Notwithstanding the foregoing, the parties acknowledge that their schedules from time to time may not permit one of them personally to be present to accompany the Child to or from school (or day camp or another scheduled activity if school is not in session) at a previously scheduled time. In that event, the other party, if he or she is available, may accompany the Child to or from school (or day camp or another scheduled activity if school is not in session) in the place of the originally scheduled party. If the other party is unavailable, the originally scheduled party shall arrange for the Child's caregiver to take his or her place. Each party agrees to notify the other party of any day on which he or she will be unable to accompany the Child no later than 8:00 p.m. the night before such day and the other party shall respond with his or her availability no later than 10:00 p.m. the night before such day. (d) The failure of the Husband to exercise his visitation rights shall not constitute a waiver thereof. 678657.13 -8- EFTA00306328 E. Each party shall at all times encourage the Child to honor, respect and love the other parent and neither shall say or do anything which may estrange the Child from the other party or injure the opinion of the Child as to the Husband or Wife, or which may hamper the free and natural development of the Child's love for the other party. The Child shall continue to be known by her name as set forth in the Recitals of this Agreement and by no other name during her minority. The Child shall be enrolled at all schools, including college, camp and other institutions under her present name. F. 1. The Child is to be raised in the Conservative Jewish tradition and is not to receive any formal training in any other religious faith. It is expected that, at a minimum, the Child will receive formal Jewish training sufficient to allow her to become a Bat Mitzvah at the appropriate age, with such training to be determined by the Husband and the Wife. If the Husband and the Wife cannot agree upon the nature and extent of such training, such decision shall be referred to the head rabbi of either Temple Emanu-El, New York, New York, or Park Avenue Synagogue, New York, New York, and the decision of such rabbi shall be final and binding on both parties. 2. (a) Except as provided in Subparagraph (b) of this Paragraph 2, the Child shall not attend any religious services other than Jewish services. In addition, the Child shall not receive religious instruction in any faith other than Judaism (except as part of an academic course) unless such instruction has been approved in advance by the Husband. (b) Notwithstanding the foregoing provisions of this Paragraph 2, the Child may attend occasional religious services for major Christian holidays 678657.13 -9- EFTA00306329 I I I I I I (e.g., Midnight Mass at Christmas and Easter Mass) so long as such attendance has been approved in advance by the Husband. G. Except in the event of illness or accident affecting the Child, neither party shall enter the home of the other without his or her consent. In the event that the Child is ill and confined to the home of either party for more than two (2) days, the other party shall be notified immediately and shall have the right, on reasonable notice, to reasonable visitation with the Child in such home during the period of confinement. H. Each of the parties agrees to keep the other fully informed of the whereabouts of the Child while she is with such party, including while on vacation. The parties agree that if either of them has knowledge of any illness or other circumstance affecting the welfare of the Child, such party will promptly notify the other party of such circumstances. I. Each party shall furnish to the other party complete and full information from any physician, dentist, consultant or specialist attending the Child for any reason whatsoever, and copies of any reports given by any of them to either of the parties. Each party shall also furnish to the other party complete and full information regarding any events at the Child's school, with the intention that each party shall have an opportunity to participate in such events to the extent that such party deems advisable. J. When the Child is with one of the parties, the other party shall have the right to correspond and communicate freely with the Child, by mail, Internet (if available) or telephone. To this end, each party agrees to provide the other with his or her address (including e-mail address) or telephone number at all times, both at home and at any other place where he or she may be staying with the Child at such party's residences, on vacation 678657.13 • - 1p_ EFTA00306330 or otherwise for any period and agrees within reason to make the Child available for such communication with the absent parent. 5. Financial Provisions for the Child. A. Support Payments. The Husband shall pay to the Wife the sum of Eighty Thousand Dollars ($80,000) per year for the support and maintenance of the Child from the earlier of (i) January 1, 2001 and (ii) the date the Townhouse, as hereinafter defined, is ready for occupancy, until the Emancipation of the Child. Child support hereunder shall be paid in equal quarterly installments on or about the first day of January, April, July and October of each year, provided, however, that if the Townhouse is ready for occupancy prior to January 1, 2001, the first such payment shall be made upon the date the Townhouse is ready for occupancy and shall be prorated from such date through the end of the calendar quarter in which such date occurs. B. Educational Expenses. The parties shall consult with each other and must each consent to the choice of the Child's educational institutions and courses to be pursued, such consent not to be unreasonably withheld or delayed. The Husband shall be obligated to pay the Educational Expenses, as hereinafter defined, of the Child until the Emancipation of the Child. The term "Educational Expenses," as used herein, shall mean fees and expenses incurred on behalf of the Child at a private nursery school, private elementary school, private secondary or preparatory school, college or other undergraduate institution attended by the Child, specifically including: 1. Tuition and other fees, dues and charges; room and board; school uniforms; books and supplies; required insurance; 678657.13 EFTA00306331 2. Reasonable cost of trips for interviews at schools and expenses involved in connection with entrance applications and examinations; 3. Expenses for transportation between any boarding school, college or other undergraduate institution and the Child's place of residence with a parent; 4. Tutoring and related expenses; 5. Expenses incurred in connection with extra-curricular and after-school activities and lessons including, without limitation, musical, sports and religious lessons; and • . 6. Summer experiences including sleepaway summer camp, sports camp, teen tours, travel and the like, including the costs of travel to and from any such summer experience. 7. The parties shall mutually select the activities to be pursued by the Child under Paragraphs 4, 5 and 6 of this Subdivision, but neither party shall unreasonably withhold or delay consent to any such program. C. Medical Coverage. The Husband agrees to maintain medical insurance for the benefit of the Child until her Emancipation. In addition thereto, the Husband shall pay all uninsured medical expenses incurred by or on behalf of the Child, including medical, surgical (including plastic surgery if medically necessary), orthodontic, psychiatric, hospital, nursing and dental expenses and the cost of prescription medicine, eyeglasses, contact lenses and surgical appliances for the Child until her Emancipation. The Husband shall have the right of prior approval for all uninsured medical expenses of the Child (except for emergency medical expenses), but his approval shall not be unreasonably withheld or delayed. The parties shall cooperate with each other in processing all medical insurance claims. If the Wife shall 678657.13 - 12 - EFTA00306332 make medical expense payments on behalf of the Child, the Husband shall promptly reimburse her upon receipt of proof of such payments, provided the Husband's consent for any uninsured medical expenses has been obtained, as provided herein. D. Child Cate and Household Help. 1. The Husband agrees to pay the expenses of one (1) full- time child care provider until such time as the Wife determines in her reasonable judgment that the Child no longer requires child care, but in no event shall the Husband be responsible for child care expenses beyond the Child's reaching age eighteen (18) or while the Child is away at boarding school. 2. The Husband agrees to pay the expenses of one (I) full- time housekeeper with cooking responsibilities until the Child reaches agc eighteen (18), provided, however, that if the Wife remarries, as hereinafter defined, the Husband shall no longer be obligated to pay the expenses of such housekeeper. 3. The Husband agrees to pay the expenses of making a driver available for the Child's use for no more than ten (10) hours per week, provided, however, that in no event shall the Husband be obligated to make such driver available beyond the Child's reaching age eighteen (18) or while the Child is away at boarding school, camp or the Vacation Residence, as hereinafter defined. The Husband shall select such driver and shall set such driver's salary and bonus. 4. With respect to the child care provider and housekeeper to be provided for the Child under Paragraphs 1 and 2 of this Subdivision D, the Wife's selection of such individuals and her decision as to their salaries and bonuses shall be subject to the Husband's consent, which shall not be unreasonably withheld or delayed. 678657.13 - 13 - EFTA00306333 5. The parties acknowledge that the parties currently employ a full-time child care provider at a salary of Sixty-Five Thousand Dollars ($65,000) per year and a full-time housekeeper at a salary of Sixty Thousand Dollars ($60,000) per year and the Husband consents to the continuation of such expenses hereafter. The parties agree that such continuation of expenses satisfies the Husband's current obligation under Paragraphs 1 and 2 of this Subdivision. E. Emancipation. The "Emancipation" of the Child shall be deemed to have occurred on the earliest of the following events with respect to the Child: 1. Reaching the age of twenty-one (21) years, provided that if the Child upon reaching such age is attending a college, university or similar undergraduate institution, such Emancipation event shall be postponed until the Child (i) completes four (4) academic years of college education, (ii) abandons her education or (iii) reaches age twenty-five (25), whichever occurs first. Notwithstanding the foregoing, if the Child temporarily abandons her education but then resumes it prior to the occurrence of any other Emancipation event, the Emancipation event caused by the Child's abandonment of her education shall be deemed terminated and nullified upon the resumption by the Child of her education and the period, if any, from such a termination until the earliest of any other Emancipation event shall, for all purposes under this Paragraph, be deemed a period prior to the occurrence of an Emancipation event; 2. Engaging in full-time employment upon and after the Child's reaching age eighteen (18), except that (i) engaging by the Child in partial employment shall not be deemed an Emancipation event, and (ii) engaging by the Child in full-time employment during vacation and summer periods shall not be deemed an Emancipation event. 678657.13 - 14 - EFTA00306334 Such an Emancipation event shall be deemed terminated and nullified upon cessation by the Child for any reason from full-time employment, and the period, if any, from such a termination until the earliest of any other Emancipation event shall, for all purposes under this Paragraph, be deemed a period prior to the occurrence of an Emancipation event; 3. Marriage; 4. Departure from the homes of both parties (other than to attend a boarding school, college, undergraduate or graduate educational institution) and establishment of another permanent residence. Notwithstanding the foregoing, if theChild abandons such other permanent residence and resumes living with either party prior to the occurrence of any other Emancipation event, the Emancipation event caused by the Child's departure from the homes of both parties shall be deemed terminated and nullified upon the return by the Child to live in the home of either party and the period, if any, from such a termination until the earliest of any other Emancipation event shall, for all purposes under this Paragraph, be deemed a period prior to the occurrence of an Emancipation event; or 5. Death. F. Inheritance Provisions. The Husband agrees to provide by his Will, by beneficiary designation or otherwise, including by one or more trusts created during his lifetime, that an aggregate of no less than twenty-five percent (25%) of his Adjusted Gross Estate, as hereinafter defined (the "Child's Amount"), shall pass during his lifetime or as a result of his death to or for the benefit of the Child, outright or in trust, in such amounts or proportions and subject to such terms and conditions, as the Husband shall determine in his sole discretion. Notwithstanding the foregoing, if the Husband transfers all or part of the Child's Amount to the Child in trust (rather than outright), his Will or the applicable trust agreement shall (i) direct that 678657.13 -15- EFTA00306335 at a minimum, the Trustees shall use the income and principal of the trust to provide for the health, education, maintenance and support of the Child, and (ii) designate the Wife to serve as a co-Trustee of such trust. The parties do not intend, while both parties are living, that the Child shall be able to enforce the provisions of this Subdivision as a third party beneficiary and, thus, the parties shall have the right, in their mutual and absolute discretion, to revoke or modify this Subdivision in any way by an amendment hereto executed in accordance with the provisions of Section 26(H) of this Agreement. Upon the death of either party, the provisions of this Subdivision as then in effect, if at all, shall become irrevocable and the Child shall have the right as a third party beneficiary to enforce such provisions. For purposes of this Subdivision, the term "Adjusted Gross Estate" shall mean the Husband's gross estate, reduced by the expenses of his last illness, debts (other than any obligations of the Husband's estate pursuant to the terms of this Agreement), administration expenses and funeral expenses, all as finally determined in the federal estate tax proceeding relating to the Husband's estate. The parties confirm that in determining the Child's Amount, the Husband's gross estate shall not be reduced by any obligations of the Husband's estate to the Child or the Wife pursuant to the terms of this Agreement. The parties further confirm that if a trust is used in whole or in part to satisfy the Child's Amount, the income and principal of such trust shall not be used to satisfy the Husband's obligation to make the financial provisions for the Child provided in Subdivisions A through D of this Section, which shall remain the Husband'S obligation'and shall be binding upon his estate. Any disposition to or for the benefit of the Child shall be subject to its proportionate share of estate, succession and inheritance taxes. 678657.13 - 16 - EFTA00306336 G. Tax Consequences. No payment under this Section 5 for the benefit of the Child shall be deductible by the Husband for income tax purposes or includible in the income of the Wife. H. Dependency Exemption. The Husband (or, if he shall not be eligible or if he is unable to realize any benefit, the Wife) shall have the right to claim the Child as his (or her) dependent on his (or her) income tax returns. The Wife (or the Husband), at the Husband's (or the Wife's) request, shall promptly sign and deliver to the Husband (or to the Wife) any forms required by the Internal Revenue Service in order for the Husband (or the Wife) to take the dependency exemption. I. Binding Effect. The parties acknowledge that, in the event of the death of the Husband before the Emancipation of the Child, the financial provisions for the Child under this Section 5 shall be a charge against and an obligation of the Husband's estate. J. Compliance With Child Support Standards Act. 1. The parties have been advised of the provisions of the Child Support Standards Act (Chapter 567 of the 1989 Laws of the State of New York, as presently codified inter alia in Section 240 of the Domestic Relations Law, and as may be amended from time to time) (hereinafter sometimes referred to as *Guidelines"). Each of the parties acknowledges that his or her attorney has fully explained the provisions of such Act and that he or she fully understands the possible applicability of its provisions to issues of custody' and child support which are otherwise determined by the provisions of this Agreement. 2. To the extent permitted by law, each of the parties waives any rights he or she may have pursuant to such Act, as it presently exists or may be amended in the future, and instead agrees to be bound by the terms and conditions of this Agreement. The 6711657.13 -17- EFTA00306337 parties intend that this Subdivision J be deemed to be a waiver as contemplated by Section 240(1-b)(h) of the Domestic Relations Law. 3. In accordance therewith, the parties have also been advised that the "basic child support obligation" provided in Domestic Relations Law Section 240(1-b) and Family Court Act Section 413(1)(b) would presumptively result in the correct amount of child support to be awarded unless a court were to find such amount to be unjust or inappropriate and that a court must award child support in the numerical sum of the "basic child support obligation" that is computed from the application of a formula set forth therein unless such award would be unjust or inappropriate. 4. The parties agree that a court would find the application of the Guidelines to be unjust and inappropriate in light of the Husband's income, the Child's prior lifestyle and the Husband's agreement to pay directly to providers for most of the Child's ongoing living expenses. 5. To the extent that the support in this Agreement deviates from any calculation of the "basic child support obligation" as defined in the Guidelines, the parties waive the application of the Guidelines, mindful as the parties are that New York statutes require this Agreement to specify the amount of such "basic child support obligation" pursuant to the Guidelines, as well as the reason or reasons why this Agreement does not provide for payment of that amount. The parties understand that such provision rosy not be waived by either party or counsel and understand that this Subdivision J is inserted into this Agreement for that reason. 6. The Guidelines further provide that nothing contained in Domestic Relations Law Section 240(1-b)(h) and Family Court Act Section 413(1)(h) shall be 678657.13 -18- EFTA00306338 construed to alter the rights of the parties to enter into validly executed agreements or stipulations which deviate from the "basic child support obligation" provided such agreements or stipulations comply with the provisions of Domestic Relations Law Section 240(1-b)(h) and Family Court Act Section 413(1)(bXh). The purpose of this Subdivision J is solely to comply with the foregoing provisions of the Guidelines. 7. Any computations contained in this Subdivision J are not material provisions of this Agreement and neither party is relying upon them or upon any amounts set forth in this Subdivision in entering into this Agreement. 8. The presumptive figure of child support set forth in this Subdivision J does not contain "attributed" or "imputed income", nor does it contain any calculation based upon combined "parental income" in excess of $80,000.00 because only a court of competent jurisdiction can determine whether or not to attribute or impute income or to apply the applicable child support percentage, as defined by statute, to combined parental income in excess of $80,000.00. The parties recognize that, pursuant to the May 9, 1995 decision of the New York Court of Appeals in the case of Cassano v, Cassano, a Court may apply the "child support percentage" to the amount of the parties' combined income in excess of $80,000.00 after carefully considering the parties' respective circumstances and finding no reason why there should be a departure from applying the prescribed "child support percentage" to the entire amount of the parties' combined income. 9. The applicable "child support percentage" as set forth in the Guidelines is seventeen percent (17%) for the parties' Child to whom the formula set forth in the Guidelines applies. 671637.L3 - 19 - EFTA00306339 10. The Husband represents that his gross income for Guidelines purposes is in excess of Five Million Dollars ($5,000,000) per year, which has been the case for each of 1997, 1998 and 1999. The parties have not considered the Husband's earning capacity or imputed income, as only a court can do that. 11. The Wife represents that her gross income for Guidelines purposes was approximately Seventy-Five Thousand Dollars ($75,000) in 1997, Fifty Thousand Dollars ($50,000) in 1998 and Forty-Five Thousand Dollars ($45,000) in 1999. The Wife also represents that her gross income for Guidelines purposes will be approximately Fifly.Thousand Dollars ($50,000) in 2000. The parties have not considered the Wife's earning capacity or imputed income, as only a court can do that. 12. Based upon the basic calculation to be made under the Guidelines, and applying the child support percentage to the full amount of the Husband's annual income, the applicable child support due from the Husband to the Wife for the Child could be 17% of more than $5,000,000 which could be the "basic child support obligation", as defined by statute. 13. As set forth above, the parties believe that the figures set forth herein have little or no applicability to the terms of this Agreement for various reasons, including but not limited to: (a) The Husband will be paying directly to the providers for most of the Child's major expenses. (b) The payments that the Wife is to receive hereunder as a property settlement and support will generate for the Wife sufficient income to pay for the Child's other reasonable needs and expenses. 678657.13 - 20 - EFTA00306340 (c) The parties' combined parental income for the last year in which a tax return was filed exceeded $80,000.00 and it is unclear as to whether or not such excess is to be included in the calculation and the parties do not desire to incur the expenses each would bear in resolving such issue; and (d) The parties agree that even if a calculation could be made as envisioned in the Guidelines, such a result would be unjust or inappropriate. 14. Notwithstanding anything contained in this Subdivision or in any other clause, Paragraph or Section of this Agreement or of any statute presently in existence or which may be enacted in the future, the parties expressly waive the right to assert any right to recover the difference between what would be the precise "basic child support obligation" under the Guidelines and the child support arrangement set forth in this Agreement, regardless of whether the Husband or the Wife would benefit from asserting such right. No overpayment or underpayment of child support resulting from a deviation from the obligation under the Guidelines shall be recoverable nor shall any alleged under- or over-payment form the basis for any claim or cause of action by either party, or third party claiming through or on behalf of either party, against the other. 6. Distributive Award to the Wife. A. Distributive Amount. I. Subject to the provisions of Section 9(A) hereof, the Husband hereby agrees to pay to the Wife by personal check the sum of One Million Dollars ($1,000,000) (the "Distributive Amount") on the later of January 2, 2001 or the entry of a final divorce decree between the parties. 678637.13 - 21 - EFTA00306341 2. The transfer of the Distributive Amount shall be free of all taxes to the Wife and shall not be deductible by the Husband. B. Maintenance Payments. 1. Subject to the provisions of Section 12 and Section 20 of this Agreement (which supersede this Paragraph if the Wife violates the Relocation Restriction or the confidentiality requirements, as the case may be), the Husband shall pay to the Wife as maintenance and support the sum of Four Hundred Fifty Thousand Dollars ($450,000) per year, payable in equal quarterly installments, on or about the first day of January, April, July and October of each year, until the earlier to occur of (i) the nineteenth (19th) anniversary of the Start Date, as hereinafter defined, and (ii) the death of the Wife, provided, however, that in the event of the remarriage of the Wife, as hereinafter defined, the maintenance payments under this Paragraph 1 shall thereafter be reduced to Three Hundred Fifty Thousand Dollars ($350,000) per year. The first maintenance payment shall be made on the Start Date and shall be prorated from the Start Date through the end of the calendar quarter in which the Start Date occurs. 2. Commencing with the nineteenth (19th) anniversary of the Start Date, the Husband shall pay to the Wife (if she is then living) as maintenance the sum of Two Hundred Fifty Thousand Dollars ($250,000) per year, payable in equal quarterly installments, until the death of the Wife. The first such maintenance payment shall be made on the nineteenth (19th) anniversary of the Start Date and shall bo prorated from such anniversary of the Start Date through the end of the calendar quarter in which such anniversary of the Start Date occurs. 678657.13 - 22 - EFTA00306342 3. The term "Start Date" as used in this Agreement shall mean the date that is the earlier of (i) January 1, 2001 and (ii) the date upon which the Townhouse, as hereinafter defined, is ready for occupancy. 4. The maintenance payments hereunder shall be included in the Wife's taxable income and shall be deductible by the Husband for federal, state and local income tax purposes. If the applicable federal tax laws shall change so that all or part of the maintenance payments hereunder shall not be taxable to the Wife and deductible by the Husband, the parties agree to adjust the maintenance payments so that the net after-tax effect to the Wife would be the same as if such payments were taxable to the Wife and deductible by the Husband for federal, state and local income tax purposes. 5. Upon the happening of any event which shall result in the cessation or reduction of any payment to the Wife hereunder, the cessation or reduction shall be effective as of the date thereof. 6. The term "remarriage" of the Wife as used in this Agreement shall mean the entry by the Wife into a marriage contract or marriage ceremony (whether voidable or not) or the entrance by the Wife into a non-temporary, non-casual relationship for an aggregate period of nine (9) substantially consecutive months with an unrelated person over age eighteen (18) with whom the Wife shall be or shall have been residing together in any residence or residences for such aggregate period, notwithstanding the absence of a formal marriage contract or ceremony. 7. In the event of the Husband's death prior to the Wife's death, the obligation to pay maintenance to the Wife under this Subdivision B shall be a charge against and payable by the Husband's estate. 678657.13 - 23 - EFTA00306343 8. In no event shall there be any liability to make any payment of maintenance under this Subdivision B for any period after the death of the Wife nor shall there be any liability to make any payment (in cash or property) as a substitute for such payments after the death of the Wife (except that the Husband or his estate shall remain liable for arrears, if any). The parties acknowledge that the maintenance arrangements, both as to amount and as to duration, as set forth in this Subdivision B are in full and final settlement of all claims for maintenance or support which the Wife and the Husband may have against each other and that they meet the reasonable needs of the Wife and the Husband as justice requires, in accordance with Section 236, Part B of the Domestic Relations Law of the State of New York. The parties acknowledge that they are each in good health and, except as herein provided, fully capable of being self-supporting. The Husband specifically waives, releases and renounces any right to receive alimony, maintenance or support of any kind front the Wife. 7. Division of Property. A. Residences. The following provisions shall apply with respect to all residences used by the parties during their marriage other than the Townhouse, as hereinafter defined, and the Temporary Residence, as hereinafter defined: The Wife hereby assigns to the Husband all of her right, title and interest (if any) in and to all residences used by the parties during their marriage. All items of tangible personal property (other than the Wife's personal effects) located in any such residence shall, front and after the date hereof, be the sole and exclusive property of the Husband, and the Wife hereby assigns, transfers and conveys to the Husband all of her right, title and interest in and to all such items of tangible personal property. The Husband agrees that the Wife shall retain her personal effects. 678657.13 - 24 - EFTA00306344 B. Purchase of Townhouse. 1. (a) The Husband has entered into an agreement to purchase a townhouse located at 17 East 75th Street, New York, New York for the sum of Ten Million Five Hundred Thousand Dollars ($10,500,000) (the 'Townhouse"). A true copy of the contract of sale (the "Contract of Sale") with respect to the Townhouse is attached hereto as Exhibit A. The Contract of Sale shall not be amended and no conditions to the purchaser's obligation to accept title or to the seller's obligations shall be waived or modified without the Wife's prior approval. (b) Title to the Townhouse shall be taken in the Wife's sole name at the closing of the purchase of the Townhouse. To that end, the Husband shall direct the seller to issue the deed to the Townhouse to the Wife. The Wife shall not be required to assume any obligations under the Contract of Sale. (c) The Husband agrees to pay the costs of renovating and furnishing the Townhouse as well as closing costs, including, without limitation, mansion taxes, recording charges, department searches, survey and title insurance, provided, however, that the Husband's obligation for the aggregate expenditure for the costs of renovating and furnishing the Townhouse shall not exceed Five Hundred Thousand Dollars ($500,000). Such furnishings shall belong to the Wife. (d) Subject to the provisions of Paragraph 2 of this Subdivision B (which supersedes this Subparagraph in the event that the Husband finances a portion of the Townhouse in accordance with the provisions of Paragraph 2 of this Subdivision), the Husband shall be responsible for and shall reimburse the Wife for fifty percent (50%) of.all amounts due for homeowner's insurance, assessments and real estate taxes with respect to the 678657.13 - 25 - EFTA00306345 Townhouse. The Husband shall reimburse the Wife for such costs within ten (10) days of his receipt of bills or receipts showing the cost incurred. All such payments by the Husband with respect to real estate taxes shall be included in the Wife's taxable income as alimony and shall be deductible by the Husband for federal, state and local income tax purposes as the payment of alimony. The Wife shall be entitled to deduct one hundred percent (100%) of all real estate taxes and other assessments for federal, state and local income tax purposes to the extent permitted under the applicable tax laws and the Husband shall not be entitled to deduct any portion of such real estate taxes or assessments on his tax returns. All amounts paid by the Husband to the Wife equal to his contribution towards homeowner's insurance will be neither deductible to the Husband nor includible in the income of the Wife. (e) The Wife shall be solely responsible for all other expenses in connection with the maintenance and upkeep of the Townhouse, including, without limitation, repairs capital improvements, as hereinafter defined (subject, however, to a partial reimbursement from the Husband in accordance with the provisions of Paragraph 7 of this Subdivision), telephone and cable service, gas and electricity. (0 Subject to the provisions of Section 12 of this Agreement (which supersedes this Subparagraph if the Wife violates the Relocation Restriction), the parties confirm that the Wife shall have the right to reside in the Townhouse for her lifetime. (g) Except as otherwise provided herein, the Wife agrees not to transfer the Townhouse for less than adequate and full consideration (e.g., by gift or bargain sale). In addition, the Wife shall not lease the Townhouse to a third party without the Husband's prior consent, which shall not be unreasonably withheld. Any such lease shall be (i) limited to one (1) year in duration, (ii) subject to the Husband's option to purchase the 678657.13 - 26 - EFTA00306346 Townhouse as provided in this Agreement and (iii) terminable upon the Husband's exercise of such option. 2. (a) The parties shall, at the Husband's option, finance the Husband's obligation to purchase the Townhouse by cooperating with each other in obtaining a mortgage loan (the "Loan") in the Wife's sole name secured by a fast mortgage on the Townhouse (the "Mortgage"). If the Husband does not exercise his option to procure the Loan and Mortgage upon the purchase of the Townhouse, the Husband reserves the right to obtain a Loan and Mortgage at a later date. In the event that the Husband procures the Loan and Mortgage, then the Loan and Mortgage documents shall provide that the Wife is fully exculpated of and from any liability thereunder and the lender shall look only to the Townhouse and the guarantor of the Loan, if any, subject to the lender's usual "carve-outs" for certain actions on the part of the borrower. The Wife agrees to execute and deliver any and all documents necessary to obtain t