AGREEMENT TO
ISSUE ADDITIONAL COMPANY INTERESTS
AGREEMENT TO ISSUE ADDITIONAL COMPANY INTERESTS, dated as of August 31,
2005, between Innalogic, LLC, a Delaware limited liability company (the
"Company"), MSGI Security Solutions, Inc., f/k/a Media Services Group, Inc.
("MSGI"), Xxxxx X. Xxxxxx ("Xxxxxx"), Xxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxxx X.
Xxxxx ("Xxxxx"), Xxxxxx Xxxxxxxx ("Davidoff"), Wenkai Xxxxxxx Xxxxx ("Xxxxx"),
and Xxxx Xxxxxxxx ("Xxxxxxxx"; Xxxxxx, Clemente, Jones, Davidoff Chang and
Xxxxxxxx, collectively, the "Founding Members").
Recitals
A. MSGI and the Founding Members (together, the "Members") are parties
to the Amended and Restated Limited Liability Company Agreement, dated as of
August 18, 2004 (the "Operating Agreement"). Capitalized terms used herein not
otherwise defined herein shall have the respective meanings set forth in the
Operating Agreement.
B. Prior to the date hereof, the Percentage Interests of (i) each of
the Members was adjusted to reflect the complete redemption by the Company of
the Company Interests of a member of the Company and (ii) each of the Founding
Members was reallocated to reflect the issuance of additional Company Interests
to one of the Founding Members, such that immediately prior hereto, the
Percentage Interest of MSGI equals 55.33% and the Percentage Interest of each of
the Founding Members equals 7.445%.
C. Pursuant to Section 10.8 of the Operating Agreement, in the event
that by August 31, 2005 the aggregate pre-tax income of the Company does not
equal or exceed the Total Target Amount as set forth on Schedule D of the
Operating Agreement then, among other things, the Percentage Interest of MSGI
shall be increased and the Percentage Interest of the Founding Members in the
aggregate shall be reduced (in the ratio of their Percentage Interests) by the
amount of such increase.
D. The Members have agreed that as of the date hereof, the aggregate
pre-tax income of the Company does not equal or exceed the Total Target Amount
and that the Percentage Interests of the Members shall be adjusted accordingly.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Issuance of Additional Company Interests. (a) The Company hereby issues to
MSGI additional Company Interests constituting a Percentage Interest equal to
20.67% such that immediately following the execution and delivery of this
Agreement by all of the Members, (i) the Percentage Interest of MSGI shall equal
76% and (ii) the Percentage Interest of each of the Founding Members shall equal
4%.
(b) MSGI hereby acknowledges and agrees that such issuance pursuant hereto shall
satisfy the terms and provisions of Section 10.8 of the Operating Agreement and,
notwithstanding anything therein or in Schedule D to the Operating Agreement or
elsewhere to the contrary, MSGI shall not be entitled to any further Company
Interests (or any increase in its Percentage Interest) pursuant thereto.
2. Schedule B to the Operating Agreement. Schedule B to the Operating Agreement
is hereby deleted in its entirety and Schedule B attached hereto substituted in
lieu thereof.
3. Acknowledgement by MSGI. MSGI hereby acknowledges and agrees that as of the
date hereof, none of the Company Interest (including the Company Interest issued
pursuant hereto) have been registered under the Securities Act of 1933, as
amended, or any state or foreign securities laws, and that it is acquiring the
Company Interest for investment solely for its own account and not for
distribution, Transfer or sale to others in connection with any distribution or
public offering in violation of federal or state securities laws.
4. Miscellaneous. (a) This Agreement, and all matters relating to the validity,
construction, performance and enforcement hereof, shall be governed, construed
and controlled by and under the laws of the State of Delaware.
(b) This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument. This Agreement may be executed by fax signature,
which shall have full binding legal effect.
(c) This Agreement, together with the Operating Agreement as amended hereby,
constitutes and contains the sole and entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all
prior discussions, agreements and understandings of every kind and nature
between such parties and/or their respective Affiliates as to such subject
matter.
IN WITNESS WHEREOF, each of the undersigned, intending to be legally
bound hereby, has duly executed this Agreement as of the date first set forth
above.
INNALOGIC, LLC
/s/Xxxxx Xxxxxx
By:-------------------------
Xxxxx Xxxxxx
Chief Executive Officer
MSGI SECURITY SOLUTIONS, INC.
/s/Xxxxxx Xxxxxxx
By:-------------------------
Xxxxxx Xxxxxxx,
Chief Executive Officer
/s/Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
/s/Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx
/s/Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
/s/Xxxxxx Xxxxxxxx
---------------------------
Xxxxxx Xxxxxxxx
/s/Wenkai Xxxxxxx Xxxxx
---------------------------
Wenkai Xxxxxxx Xxxxx
/s/Xxxx Xxxxxxxx
---------------------------
Xxxx Xxxxxxxx
- 3 -
SCHEDULE B
Members
Name and Address Percentage Interest
---------------- -------------------
MSGI Security Solutions, Inc. 76.0%
000 Xxxxxxx Xxx., 00xx Xx.
Xxx Xxxx, XX 00000
Xxxxx X. Xxxxxx 4.0%
00 Xxxxxxx Xxxxxx, #0X
Xxx Xxxx, XX 00000
Xxxx X. Xxxxxxxx 4.0%
000 Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxx 4.0%
00 Xxxxxxxx Xx. #0
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 4.0%
000 Xxxx Xxxxxx Xxx #0
Xxxxxxxx, XX, 00000
Wenkai Xxxxxxx Xxxxx 4.0%
X.X. Xxx 000
Xxxxxx, XX 00000
Xxxx Xxxxxxxx 4.0%
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
