PRESIDENT/CEO'S MEMORANDUM AGREEMENT
(NEO MODERN ENTERTAINMENT CORP./FILMART INC. (loan out-services
of XXXXX XXXXXXXXX)
The following agreement, dated as of March 21, 1997 (the "Agreement")
shall constitute the basic terms and conditions of the agreement between FILMART
INC. ("Loan-Out Corp.") a California Corporation, providing the services of
XXXXX XXXXXXXXX ("Employee") and NEO MODERN ENTERTAINMENT CORP., a California
corporation ("Company"), as follows:
1. Loan-Out Corp. Fed Id#
Employee. Social Security Number ###-##-####.
2. Position. President/CEO.
3. Duties.
a. Subject to such supervisory powers, if any, as may be given by
the Board of Directors of the Company to the Chairman of the Board, if there be
such an officer, the Employee, as President/CEO shall be the Chief Executive
Officer of the Company and shall, subject to the control of the Board of
Directors, have general supervision, direction and control of the business and
Officers of the Company. He shall preside at all meetings of the Shareholders
and in the absence of the Chairman of the Board, or if there be none, at all
meetings of the Board of Directors. The Employee, as President/CEO, shall be ex
officio a member of all the standing committees, including the Executive
Committee, if any, and shall have the general powers and duties of management
usually vested in the office of President of a corporation, and shall have such
other powers and duties as may be prescribed by the Board of Directors or the
By-Laws of the Company.
b. As President, Employee, shall have the sole "green light"
authority to choose which of the film projects the company will put into
production and shall have creative control as customarily defined in the film
industry (i.e. script approval, casting, final cut) over each film. Financial
controls such as budget approval and film distribution shall be in control of
the Board of Directors.
c. If a third party Chief Financial Officer is not elected by the
Board of Directors, Employee shall also be the Chief Fanancial Officer of the
Company. As such, he shall keep and maintain, or cause to be kept and maintained
in accordance with generally accepted accounting principles, adequate and
correct accounts of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, capital, earnings (or
surplus) and shares. The book of account shall at all reasonable times be open
to inspection by any Director.
As Chief Financial Officer, he shall deposit all moneys and other valuables in
the name and to the credit of the Company with such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the Company
as may be ordered by the Board of Directors, shall render to the Directors,
whenever they request it, an account of all of his transactions and of the
financial condition of the Company, and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or the By-Laws
of the Company.
d. If a third party Secretary of the Company is not elected by the
Board of Directors, the Employee shall also be the Secretary of the Company (as
defined by the By-Laws of the Neo Modern Entertainment Corporation). As such, he
shall keep, or cause to be kept, a book of minutes at the principal office or
such other place as the Board of Directors may order, of all meetings of
Directors and Shareholders, with the time and place of holding, whether regular
or special, and if special, how authorized, the notice thereof given, the names
of those present at Director's meetings and the proceedings thereof.
As Secretary of the Corporation, he shall keep, or cause to be kept, at the
principal office or at the office of the corporation's transfer agent, a share
register, or duplicate share register, showing the names of the Shareholders and
their addresses; the number and classes of shares held by each; the number and
date of certificates issued for the same; and the number and date of
cancellation of every certificate surrendered for cancellation.
As Secretary of the Corporation, he shall give, or cause to be given, notice of
all the meetings of the Shareholders and of the Board of Directors required by
the By-Laws or by law to be given. He shall keep the seal of the Corporation in
safe custody, and shall have such other powers and perform such other duties as
may be prescribed by the Board of Directors of the By-Laws of the Neo Modern
Entertainment Corporation.
4. Term. Employee shall commence Employee's services hereunder on May 25,
1997 and Employee shall continue to render such services on an non-exclusive
basis until March 21, 2004. After expiration of the Term, this agreement will be
automatically renewed, subject to good faith negotiations.
5. Compensation. Company shall pay to Loan-Out the following compensation:
a. Fixed Cash Compensation. Two Thousand US Dollars ($2,000.00) per
month for the first year. There will be a 25% increase in the monthly Fixed Cash
Compensation, for each
successive year, over the previous years Compensation, as follows:
year 1: $ 2,000.00 per month
year 2: $ 2,500.00 per month
year 3: $ 3,125.00 per month
year 4: $ 3,906.25 per month
year 5: $ 4,882.81 per month
year 6: $ 6,103.52 per month
year 7: $ 7,629.39 per month
If the Company does not have sufficient funding to pay the above sums, the
Compensation shall be deferred and paid in full or in installments at future
date(s) to be determined in good faith by the Company, with 10% annual simple
interest.
b. Stock Option Plan. The Loan-Out Corp. will have the option to
purchase common shares at par value of $.001 as follows:
100,000 shares per month for year 1. = 1,200,000 total
125,000 shares per month for year 2. = 1,500,000 total
156.250 shares per month for year 3. = 1,875,000 total
195.312 shares per month for year 4. = 2,343,750 total
244,140 shares per month for year 5. = 2,929,687 total
305,175 shares per month for year 6. = 3,662,109 total
381,469 shares per month for year 7 = 4,577,636 total
The shares will be restricted under Rule 144, and the Loan-Out Corp. shall have
the irrevocable right to sell these shares at any time, subject to Rule 144, to
any third party without any other restrictions by the Company.
If there are stock splits, the plan will be adjusted proportionally by the
multiple of the split factor. (i.e.: if the stock is split 1:2 the option price
shall be divided by 1/2, and the number of shares multiplied by 2).
The Loan-Out Corp. will have the irrevocable right to exercise the options every
90 days, per the above-mentioned plan.
Company hereby undertakes to provide the necessary legal opinion letters, and
issue any paperwork as may be necessary for the issuance of the above-mentioned
shares, and for the removal of the 144 legends, subject to Rule 144, when the
Loan-Out Corp. decides to sell these shares to any third party.
In the event Company shall fail or refuse for any reason to execute and deliver
the share certificates, legal opinions, or any paperwork, legal opinion letters
above described and/or any such documents, then Company hereby irrevocably
appoints Loan-Out Corp. as Company's attorney-in-fact to cause such legal
opinion letters to be issued and execute said paperwork and/or documents in
Company's name and on Company's behalf. Company's failure to provide said legal
opinion letters or execute said paperwork and/or documents shall not affect or
limit any of Company's rights in and to the results and proceeds of Loan-Out
Corp.'s services thereunder.
6. Travel and Expenses. Company shall provide Employee with a monthly
allowance for automobile costs and shall reimburse Employee reasonable costs of
gasoline, entertainment, travel expenses, and out of town hotel or living
expenses and per-diems, connected directly with Employees services to the
Company.
7. Office & Secretary. Employee shall be provided with an office, and the
services of a secretary, during the period of Employee's services to Company
hereunder, subject to Company having the appropriate and sufficient financial
resources to provide such to Employee.
8. Insurance. Company shall have the right to apply for and take out, at
Company's expense, life, health, accident Directors & Officers Liability
Insurance or any other insurance covering Employee, in any amount Company deems
necessary to protect Company's interest hereunder. Employee shall not have any
right, title or interest in or to such insurance. Employee shall assist Company
in obtaining such insurance by submitting to usual and customary medical and
other examinations and by signing such applications, statements and other
instruments as may be reasonably required by any insurance company.
9. Default/Disability. No act or omission of Company hereunder shall
constitute an event of default or breach of this Agreement unless Employee shall
first notify Company in writing setting forth such alleged breach or default,
and Company shall cure said alleged breach or default within ten (10) days after
receipt of such notice (or commence said cure within said ten days if the matter
cannot be cured in ten days, and shall diligently continue to complete said
cure).
Upon any material breach or default by Employee of any of the terms and
conditions hereof, Company shall immediately have the right to suspend this
Agreement. If such breach or default is not cured within ninety (90) days after
Employee's receipt of written notice of such alleged breach or default (the
"Cure Period"), Company shall have the right, exercisable at any time after the
expiration of the Cure Period, to continue such suspension or terminate this
Agreement by written notice to Employee. Notwithstanding that Company may not
terminate this
Agreement if Employee cures such alleged breach or default within the Cure
Period.
Upon any disability or incapacity of Employee which prevents Employee from
fully performing or complying with the terms and conditions hereof, Company
shall immediately have the right to suspend this Agreement. If such disability
or incapacity shall continue for more than ninety (90) consecutive days, Company
shall immediately have the right, exercisable at any time after such ninety (90)
day period, to continue such suspension or terminate this Agreement by so
notifying Employee in writing.
During the period of any suspension hereunder or upon any termination
hereof, Employee shall not be entitled to any further compensation hereunder;
provided, that if such suspension or termination is a result of a disability or
incapacity (and not a default or breach), Employee shall be entitled to that
compensation which had accrued prior to the date of the event giving rise to
such suspension and/or termination. If Company has the choice to continue a
suspension hereunder or to terminate and Company elects to continue the
suspension, then Company may terminate the Agreement by written notice to
Employee during the period of any such continued suspension. Nothing contained
herein above shall in any manner limit any other remedy which Company may have
against Employee (including without limitation, the right to offset Company's
damages caused by Employee's default or breach hereof from and against any
compensation due to Employee hereunder). Company's failure to suspend and/or
terminate this Agreement during periods when it may do so and/or Company's
payment of compensation to Employee during any period of suspension, shall not
be deemed a waiver of Company's right to later suspend and/or terminate this
Agreement or withhold further compensation due to Employee. A material breach of
any other agreement between the parties may, at Company's election, be deemed a
material breach of this Agreement.
10. Loan-Out Corp.'s & Employee's Remedies. In the event of any breach by
Company of this Agreement, Loan-Out Corp. and Employee shall be limited to
Employee's remedies at law for damages, if any, and shall not have the right to
terminate or rescind this Agreement.
11. Indemnification and Liability. The Loan-Out Corp.'s and Employees
liability for monetary damages is hereby eliminated to the fullest extent
permissible under California Law.
The Company hereby agrees to indemnify and hold Loan-Out Corp. and Employee
harmless for any and all acts performed by Employee, whether negligent,
intentional or unintentional related to the performance of his duties to the
Company and any other breach of duty (such as negligence, nonfeasance,
malfeasance, or other acts for which Employee or Loan-Out Corp. may held liable)
to the Company and Shareholders and from any claims of any other third
parties related to any actions, activities or relationships between the Company,
Loan-Out Corp., Employee and such third parties.
The Company undertakes to provide Directors & Officers Liability Insurance, and
will pay the cost of the deductible if any suit shall arise resulting from
Employees services hereuder.
12. Notices and Payments. All notices and payments thereunder shall be
made to the appropriate party at the following address:
Loan-Out Corp. Company
-------------- -------
FILMART INC. NEO MODERN ENTERTAINMENT CORP.
0000 Xxxxxx Xxxx. #000 000 X. Xx Xxxxxxx, #000
Xxxx Xxxxxxxxx, XX 00000 Xxxx Xxxxxxxxx, XX 00000
Atttn: Xxxxx Xxxxxxxxx Attn: Xxxxx Xxxxxxxxx
13. Standard Terms. This Agreement shall include all of the Standard Terms
and Conditions set forth in Employment Contracts of this nature, which are
incorporated by this reference as if fully set forth herein.
a. Governing Law. This Agreement shall be governed by the laws of
the State of California pertaining to contracts made and wholly performed
therein, and shall not be modified except by a written document executed by the
party to be charged. The parties agree to the exclusive jurisdiction of the
federal and state courts located in Los Angeles County, California in matters
relating to this Agreement.
b. Entire Agreement. This Agreement expresses the entire
understanding of the parties hereto and replaces any and all former agreements
or understandings, written or oral, relating to the subject matter hereof. The
parties acknowledge and agree that in entering into this Agreement they have not
relied upon or been induced by any promise or representation (express or
implied, oral or written) of any other party not contained herein.
c. Waiver. No waiver by any party hereto of any term or condition
hereof shall be deemed or construed to be a waiver of such term or condition in
the future, or of any preceding or subsequent breach of the same or any other
term or condition of this or any other agreement.
d. Severability. Except as may be expressly provided to the contrary
herein, each provision of this Agreement shall be considered separate and
divisible, and in the event that any such provision is held to be invalid, void
or unenforceable
by a court of competent jurisdiction, the remaining provisions shall continue to
be in full force and effect without being impaired or invalidated in any way.
e. Remedies Cumulative. Except as may be expressly provided to the
contrary herein, the parties' various rights and remedies hereunder shall be
cumulative and the exercise or enforcement of any one or more of them shall not
preclude the enforcing party from exercising or enforcing any of the others or
any right or remedy provided for by law.
f. Binding Effect. This Agreement, and all rights and obligations
hereunder, shall be binding on and inure to the benefit of the parties hereto
and their respective heirs, successors, licensees and assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date and year above first indicated.
April 6th, 1999
NEO MODERN ENTERTAINMENT CORP.
____________________________________
per: Xxxxx Xxxxxxxxx, president
This is to confirm that I have given Filmart Inc. the right to sign this
agreement and to loan-out my services, as described in detail above, per the
terms and conditions of this agreement.
_________________________
XXXXX XXXXXXXXX, Employee
April 6th, 1999
APPROVED BY BOARD OF DIRECTORS:
date:____________________, 1999
director: _____________________
director: _____________________
