Exhibit 6(c)(viii)
TERMINATION AGREEMENT
Termination Agreement dated July 3, 1996 (the "Effective Date") by and
between The CineMasters Group, Inc., 000 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
XX 00000 ("CineMasters"), Xxxxxxx Films, Inc. ("KFI") and Xxxxx Xxxxxxx, 00
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Xxxxxxx").
WHEREAS, CineMasters and KFI, a corporation wholly-owned by Xxxxxxx,
entered into a Purchase Agreement dated as of July 26, 1994; and
WHEREAS, Xxxxxxx and CineMasters entered into an Employment Agreement
dated as of July 26, 1994; and
WHEREAS, the parties are terminating the Employment Agreement and
modifying the Purchase Agreement in accordance with the terms herein contained
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and subject to the terms and conditions hereof, the
parties hereby agree as follows:
1. (a) The Employment Agreement is hereby terminated as of the Effective
Date. The parties agree that all matters contained in this Termination Agreement
will be effective on the Effective Date unless otherwise specifically set forth
herein.
(b) The option for 200,000 shares of CineMasters stock granted KFI
pursuant to paragraph 1.3(a) of the Purchase Agreement, and the option for
250,000 shares of CineMasters stock granted to Xxxxxxx pursuant to Paragraph 3.3
of the Employment Agreement, none of which have heretofore been exercised, are
hereby declared null and void, as of the Effective Date.
2. The parties have scheduled a closing on Wednesday, August 7, 1996 at
11:00 o'clock in the a.m. (the "Closing Date") at the offices of Xxxxx
Xxxxxxxxxx & Xxxxx. At the Closing:
(a) KFI will deliver to CineMasters (i) stock certificate #U523 for
160,000 shares of restricted CineMasters Class A Common Stock issued to KFI;
(ii) a stock power in blank with signature medallion guaranteed; (iii) a
corporate resolution of KFI approving the terms of this Termination Agreement,
and stating that Xxxxxxx is authorized to execute this Termination Agreement;
and (iv) an affidavit of Xxxxxxx stating that he is the sole shareholder of KFI;
(b) Xxxxxxx will deliver to CineMasters a letter of resignation,
effective as of June 10, 1996, wherein Xxxxxxx resigns as President and a
Director of CineMasters; and
(c) Xxxxxxx and KFI will execute and deliver to CineMasters a
mutually agreeable general release in favor of CineMasters.
3. Simultaneously, at the Closing:
(a) CineMasters will deliver 5 replacement certificates for an
aggregate of 80,000 shares (4 for 18,000 shares and one for 8,000 shares) of
restricted CineMasters Class A Common Stock in the name of Xxxxx Xxxxxxx (the
"Xxxxxxx Stock"). It is understood that Xxxxxxx may not sell more than 18,000
shares of the Xxxxxxx Stock in any one calendar quarter. CineMasters will do all
things necessary to permit the continuing availability of sales of the Xxxxxxx
Stock under SEC Rule 144 during all periods in which Xxxxxxx holds Xxxxxxx Stock
through September 30, 1997.
(b) CineMasters will deliver to KFI and Xxxxxxx a corporate
resolution of CineMasters authorizing this Termination Agreement.
(c) CineMasters will deliver evidence that it has paid the June and
July rent for the premises (the "Premises) presently occupied by the Xxxxxxx
Films Division of CineMasters. CineMasters will execute and deliver an
assignment of the lease between Xxxxxxx-Xxxxxx Electrical Supply Corp.
("Landlord") and CineMasters, as of January, 1995, for the Premises effective as
of August 1, 1996 and Xxxxxxx will deliver to CineMasters a release in favor of
CineMasters executed by the Landlord, effective as of August 1, 1996.
(d) CineMasters will deliver to Xxxxxxx a Xxxx of Sale and
Instrument of Assignment, and an Assignment of Copyright in a mutually agreeable
form, with respect to those tangible and intangible assets owned or leased by
CineMasters, set forth in Schedule A thereto.
(e) CineMasters will deliver to Xxxxxxx payment for his 1994/95
fiscal year bonus in the amount of $4,364.00.
4. Xxxxxxx will continue to receive the salary and benefits that he had
been receiving under the Employment Agreement through July 31, 1996.
5. As of the Effective Date, Xxxxxxx will have the sole right to use the
name Xxxxxxx Films or any variation thereof (the "Name"), except that
CineMasters may continue to use the Name to wind down the business of the
Xxxxxxx Films Division of CineMasters. Within thirty (30) days from the Closing,
CineMasters will file a Certificate of Discontinuance of the Name in a mutually
agreeable form with the New York Secretary of State.
6. CineMasters will pay the fee of $500 per week to Xxxx Xxxxx for his
services through July 31, 1996. Provided that CineMasters has made all payments
pursuant to this Paragraph 6, Xxxxxxx will be responsible for all payments and
obligations to Xxxxx after July 31, 1996 and will furnish CineMasters at the
Closing with a release from Xxxxx in a mutually agreeable form.
7. CineMasters will use reasonable best efforts to engage, as an
independent contractor, the services of Xxx Xxxxxxxxxxx, as financial advisor,
from July 1, 1996 through June 30, 1997 or until Xxxxxxx has sold the Xxxxxxx
Stock, whichever first occurs. If the Xxxxxxx Stock has not been fully sold by
such date, CineMasters will use reasonable best efforts to continue
Ehrenkrantz's engagement, subject to the Xxxxxxx contribution, until September
30, 1997, or the sale of all of the Xxxxxxx Stock, whichever first occurs.
Xxxxxxx will pay CineMasters the sum of one thousand ($1,000) dollars per month
for each month in which Xx. Xxxxxxxxxxx is so engaged.
8. Xxxxxxx will pay over to CineMasters one-half of all net proceeds from
the sale by Xxxxxxx of the second group of 18,000 shares of CineMasters Common
Stock which is to be sold by Xxxxxxx within six (6) months after the Closing.
Such amount will be paid to CineMasters within ten (10) days of Xxxxxxx'x
receipt of such proceeds.
9. Xxxxxxx has delivered to CineMasters a budget, including productions
and overhead cost to wind down the Xxxxxxx Films Division, including completion
and delivery of the Time-Warner and Xxxxxx Xxxxxxx jobs (annexed hereto as
Exhibit 9-1). CineMasters will pay for such winding down expenses in the
categories listed on Exhibit 9-1 (entertainment not to exceed $150) up to a
maximum of $66,672.79. Xxxxxxx will be responsible for any costs, salaries, fees
or other charges incurred by the Xxxxxxx Film Division of CineMasters in excess
of $66,672.79. Attached hereto as Exhibit 9-2 is a list of receivables of the
Division as of the Effective Date. Xxxxxxx represents that with respect to all
such accounts receivable (i) the work for which the charges were made has been
completed and delivered and (ii) the clients have been invoiced for the amount
of the receivable. At CineMasters' request, Xxxxxxx will cooperate with
CineMasters in the collection of any accounts receivable, including calling or
writing such clients.
10. Xxxxxxx will complete all services and deliver all materials to
Time-Warner and Xxxxxx Xxxxxxx as required pursuant to the respective contracts
and/or purchase orders.
11. Through September 30, 1997, until such time earlier as Xxxxxxx has
sold all of the Xxxxxxx Stock, neither Xxxx Xxxxxxx, Xxxxx Xxxxxxx or any
affiliate or relative of either will, in the public market, sell, transfer, or
assign in any manner, any shares of CineMasters stock.
12. (a) The parties will mutually agree on a press release regarding the
matters contained herein and neither party will make disparaging remarks about
the other.
(b) The parties will keep the term of this Agreement confidential.
13. Xxxxxxx will have the rights to those works in progress of the Xxxxxxx
Films Division set forth in Exhibit 13. Xxxxxxx will be solely responsible for
any costs of these projects incurred after the Effective Date.
14. CineMasters will retain all equipment on lease and being used by the
Xxxxxxx Films Division of CineMasters. CineMasters will remove the equipment
from the Premises on or about July 31, 1996 upon Xxxxxxx'x completion of use of
the equipment for the Time-Warner and Xxxxxx Xxxxxxx projects. CineMasters will
inspect all equipment while on the Premises and notify Xxxxxxx if any equipment
is defective and Xxxxxxx will use his best efforts to cure such defects. Once
the equipment is removed from the Premises, Xxxxxxx will have no further
liability for such equipment.
15. Miscellaneous. This Agreement shall inure to and be binding upon the
parties, their respective heirs, executors, administrators, and permitted
assigns. No delay or failure by any party to exercise any right under this
agreement, and no partial or single exercise of that right, shall constitute a
waiver of that or any other right. No waiver shall be valid unless in writing,
and shall not operate or be construed as a waiver of any subsequent breach. All
notices required or desired shall be in writing and delivered personally or by
certified mail, return receipt requested, or by recognized overnight delivery
service and forwarded to the parties at the addresses set forth above, or at
such other addresses as the parties may advise each other in writing. Copies of
all notices to CineMasters shall also be given to Xxxxxx X. Xxxxxxxx, Esq., c/o
Xxxxx Xxxxxxxxxx & Xxxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Copies
of all notices to Xxxxxxx or KFI shall be given to Xxx Xxxx, Esq., Frankfurt,
Garbus, Xxxxx & Xxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. This
agreement shall be construed in accordance with, and governed by, the law of the
State of New York.
16. Entire Agreement. This Agreement, the Purchase Agreement, and the
Employment Agreement, are the complete agreements between the parties with
respect to the subject matter herein and supersede all representations,
agreements, and understandings, whether written or oral, previously made between
the parties relating to its subject matter. There are no other understandings
and agreements between the parties.
17. The telephone system in the Premises will remain in the Premises at no
cost.
IN WITNESS WHEREOF, the parties have executed this Agreement on July __,
1996.
THE CINEMASTERS GROUP, INC.
---------------------------
By:_________________________
Xxxxx Xxxxxxx
XXXXXXX FILMS, INC.
By:_________________________
