EXHIBIT 2.4
AGREEMENT
1. DATE AND PARTIES
This Agreement is dated as of July 1, 2001 and is entered into by and
between Total Film Group, Inc., a Delaware corporation ("Total Film"),
0000 Xxxxxxxx Xxxxxxxxx, #000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, fax number
000 000-0000, on one hand, and Xxxx Xxxxxxxxx ("Xxxxxxxxx"), 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, fax number 310
272-1199, on the other hand. Total Film and Xxxxxxxxx are sometimes
referred to individually as a "party" and collectively as the "parties".
2. RECITALS
2.1 Total Film caused Match Creative Talent, LLC, a California
limited liability company to be formed on November 21, 2000
("Match Creative"). The profit interest in Match Creative are
owned as follows: Total Film - 80% and Xxxxxxxxx - 20%.
Xxxxxxxxx has been the chief operating officer of Match
Creative since its formation and is totally familiar with its
operations. The executives of Total Film have not had a
day-to-day involvement in the business of Match Creative.
2.2 Total Film on behalf of its subsidiary, Total Creative, Inc.
(`TCI"), as employer and Xxxxxxxxx, as employee, are parties
to that certain Employment Agreement dated August 4, 2000,
which provides in part for a one-year term ending August 31,
2001 (the "Employment Agreement").
2.3 The parties propose to terminate the Employment Agreement
effective June 30, 2001 and alter the ownership of profit
interests in Match Creative as set forth below.
3. AGREEMENT
For valuable consideration, the receipt of which is acknowledged, Total
Film and Xxxxxxxxx hereby agree as follows:
3.1 The term of the Employment Agreement ends June 30, 2001.
Xxxxxxxxx acknowledges that he has no further benefits owed to
him other than reimbursement for entertainment expenses
through June 30, 2001, under the Employment Agreement. His
stock options have expired. Xxxxxxxxx hereby releases Total
Film from
any obligations it may have to him that arise from and after
June 30, 2001 under the Employment Agreement.
3.2 Total Film hereby assigns to Xxxxxxxxx a 55% profit and voting
interest in Match Creative thereby reducing its profit and
voting interest down to 25% and increasing Xxxxxxxxx'x profit
and voting interest to 75%. Additionally, Total Film agrees to
make a capital contribution to Match Creative of $75,000 in
cash, of which $25,000 has been made and the balance will be
paid within 30 days. The parties agree that the proceeds form
the capital contribution will be used to pay for reasonable
and necessary business expenses of Match Creative.
4. NEW OPERATING AGREEMENT
Total Film and Xxxxxxxxx hereby agree to enter into an operating
agreement for Match Creative that will reflect the above profit
interests, capital contribution and the following items, among others:
4.1 Capital Account. As of July 1, 2001, the respective capital
accounts of Total Film and Xxxxxxxxx are zero. The financial
results up to July 1, 2001, shall be ignored for purposes of
going forward. Total Film shall receive a credit to its
capital account for the $75,000 it is contributing to Match
Creative.
4.2 Distribution of Cash. Match Creative's distributable
cash shall be distributed to members in proportion to
their respective capital accounts.
4.3 Profit and Loss. The parties agree that in calculating the
profit and loss of Match Creative, Xxxxxxxxx shall only be
entitled directly and indirectly to be paid an amount no
greater than the compensation payable to him under the
Employment Agreement as though it was extended on a month to
month basis (a) at the rate of $20,8333 a month, (b) nine
legal holidays, (c) a vacation of 15 days after the first 12
months, accruing monthly, (d) the $1,000 monthly car allowance
and (e) the monthly expenses allowance subject to a $1,000
limit per month.
4.4 Option to Purchase. Xxxxxxxxx shall have the option to
purchase from Total Film all of its interest in Match
Creative, including its 25% profit interest for the amounts
set forth below so long as the purchase and sale closes during
the applicable year (a) $75,000 by June 30, 2002, (b) $125,000
during the year following up through June 30, 2003 and (c)
$150,000 during the year following up through June 30, 2004.
Xxxxxxxxx shall exercise said option by
delivering written notice to Total Film of his election to
purchase such interest. Such purchase and sale shall be
closed within 7 days of the giving of such notice at the
offices of Total Film by Xxxxxxxxx delivering to Total Film
a bank cashiers check in such amount drawn on a bank that
clears it funds in the Los Angeles clearing house and Total
Film shall deliver to Xxxxxxxxx a written assignment of
such interest free and clear of all liens, encumbrances and
claims of third parties. As a condition to the closing,
Xxxxxxxxx shall pay or cause Match Creative to pay to Total
Film, an amount equal to its credit balance in its capital
account, excluding the $75,000 capital contribution not yet
repaid to Total Film (assuming that Total Film's capital
account on July 1, 2001, was zero).
4.5 Right to Audit. Total Film shall have the right to audit, at
its expense, the books and records of Match Creative for a
period of one year following the end of each year it retains a
profit interest and for one year following the close of the
purchase and sale of its interest.
4.6 No Other Compensation to Xxxxxxxxx. Xxxxxxxxx covenants
that he will not take any other compensation directly or
indirectly until the close of the purchase of Total
Film's profit interest in Match Creative.
4.7 Sublease. Xxxxxxxxx agrees that Match Creative's sublease of
part of the Mezzanine from Total Film and/or TCI terminated on
June 30, 2001. Xxxxxxxxx acknowledges being advised by Total
Film that TCI subleased the Mezzanine to Viridian
Entertainment effective July 1, 2001.
5. LEGAL REPRESENTATION
5.1 Xxxxxx x. Xxxxxx, 000 Xxxxx Xxxxxx Xxxxx, #000, Xxxxxxx Xxxxx,
XX 00000 has prepared this document based on the directions he
has received from both Total Film and Xxxxxxxxx, Xxxxxx has
attempted to follow the directions but he represents Total
Film and has advised them with respect to this transaction.
5.2 Xxxxxxxxx acknowledges being advised that he has the right to
have this Agreement and the proposed transaction reviewed by
an attorney of his own choosing. He has not as of the date of
this Agreement hired independent counsel, although he may
elect to do so at anytime.
5.3 Xxxxxxxxx acknowledges that Xxxxxx represents Total Film
and not him.
6. MISCELLANEOUS
6.1 Headings. The subject heading of the paragraphs and
subparagraphs of this Agreement are included for convenience
only and shall not affect the construction or interpretation
of any of its provisions.
6.2 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties pertaining to the subject manner
contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all
the parties. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a continuing
waiver. No waiver shall be binding unless executed in writing
by the party making the waiver.
6.3 Assignment. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and
respective heirs, legal representatives, successors and
assigns.
6.4 Governing Law. The Agreement shall be construed in
accordance with, and governed by, the laws of the State
of California as applied to contracts that are executed
and performed entirely in California.
6.5 Severability. If any provision in this Agreement is held
invalid or unenforceable by any court of final jurisdiction,
it is the intent of the parties that the other provisions of
this Agreement be construed to remain fully valid, enforceable
and binding on the parties.
6.6 Attorneys' Fees. If any dispute arises under this agreement or
in connection with it, the prevailing party shall be entitled
to recover his or her reasonable attorneys' fees and court
costs, as the court having jurisdiction over this matter may
award.
6.7 Further Action. Each of Buyer and Seller agrees to execute and
deliver to the other such additional documents and perform
such additional acts as may be reasonably requested by the
other to carry out the intent of the terms of this agreement.
6.8 Notice. All notices under this agreement shall be in writing
and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to
be given or on
the second day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed to the
addresses first set forth above or by fax if sent to the
number set forth above.
A copy of each such notice shall be sent to Xxxxxx X. Xxxxxx,
000 Xxxxx Xxxxxx Xxxxx, #000, Xxxxxxx Xxxxx, XX 00000.
Any party may change its address for purposes of this
paragraph by giving the other parties written notice of the
new address in the manner set forth above.
7. SIGNATURES
The parties have executed this agreement as of the date first set forth
above at Los Angeles, California.
Total Film Group, Inc., a Delaware
Corporation, Seller
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, President
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
