EXHIBIT 6.42
MEMORANDUM OF AGREEMENT
THIS AGREEMENT (the "Agreement") made as of April 20, 2000 by and between
TOTAL FILM GROUP, INC., a Delaware corporation with its principal office located
at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, XX 00000 ("Producer") and
XXXXXXX XXXXX, an individual whose address is
0 Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("Investor")
XXXXXX X. XXXXXX, an individual whose address is
00 Xxxxxx Xxxx, Xxxxx Xxxxx, XX 00000 ("Investor")
XXXX XXXXXX, an individual whose address is
000 X. 00xx Xxxxxx, Xxx. 0X, Xxx Xxxx, XX 00000 ("Investor")
XXXXX X. XXXXX, an individual whose address is
00000 Xxxxx Xxxxxxxxx, Xxx Xxxx Xxxxxxxxxx, XX 00000 ("Investor")
WHEREAS, Investors desire to collectively provide funding in the amount of
Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Loan") for the
development, production and exploitation of a motion picture tentatively
entitled "Untitled 'N Sync Project" (the "Picture") in the following amounts;
Xxxxxxx Xxxxx $ 1,900,000
Xxxxxx X. Xxxxxx $ 250,000
Xxxx Xxxxxx $ 250,000
Xxxxx X. Xxxxx $ 100,000
-----------
Total $ 2,500,000
WHEREAS, Producer and Investors desire to establish the terms and
conditions on which the Loan shall be made, as between themselves and as to
their relationship with regard to the development, production and exploitation
of the Picture;
NOW, THEREFORE, in consideration of the mutual promises xxxxx contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. LOAN. Investors does hereby agree to lend to Producer and Producer
hereby agrees to accept Two Million Five Hundred Thousand Dollars ($2,500,000).
Such amount shall be payable upon execution hereof and sent by wire transfer to
Producer as per Producer's wire instructions. The Loan shall be evidenced by a
non-interest bearing promissory note (the "Note") in the form and substance
similar to Exhibit A attached hereto and made a part hereof.
2. PREMIUM. In addition to the principal sum, Producer shall pay to
Investors an amount equal to thirty percent (30%) of the Loan (the "Premium").
3. PAYMENT. Producer hereby agrees to repay the principal sum and the
Premium on or before August 15, 2000. Producer shall be obligated to use any
funds secured for the production of the Picture to pay the principal of the Loan
plus the Premium and retire the obligations contemplated by the Note and this
Agreement.
4. ADJUSTED GROSS PROCEEDS PARTICIPATION. Investors shall be entitled to
receive six percent (6%) of the "Adjusted Gross Proceeds" resulting from the
exploitation of the Picture in any and all media throughout the universe,
including without limitation, the exploitation of ancillary rights (including,
without limitation merchandising and licensing rights), exploitation. Adjusted
Gross Proceeds shall be defined, computed, accounted for and paid in accordance
with Producer's standard definition of Adjusted Gross Proceeds. For purposes of
clarification, Adjusted Gross Proceeds shall reflect the monies received after
Producer and all applicable third parties have recouped expenses and costs which
shall include, but not be limited to the following: distribution fees, the
negative cost of the Picture, print and advertising costs, deferments, other
costs of production, financing costs and interest. Said six percent shall be
paid to the Investors' in proportion to their contribution.
5. SECURITY AND GUARANTY. Producer hereby grants to Investors as
collateral security for the payment and performance in full when due by Producer
of its obligations hereunder, a continuing security interest in, lien on, and a
right of setoff against, all of Producer's right, title and interest in Picture
as set forth in the Letter Agreement dated April 20, 2000 by and between Total
Film Group, Inc., and Phat Free Productions, Inc. a copy of which is attached
hereto as Exhibit B (the "Collateral"). The security interest granted herein
shall extend to any and all of the proceeds of the pledged assets. If Producer
does not repay the Note, Investor shall have the right to foreclose upon the
Collateral and have any or all such assets and accounts receivable liquidated
and/or paid over to Investor.
6. MODIFICATION. This instrument may not be modified except in a writing
signed by both parties.
7. BINDING EFFECT. This agreement shall inure to the benefit of and shall
be binding upon the respective heirs, successors, legal representatives and
permitted assigns of the parties hereto.
8. NOTICE. All notices under this agreement shall be in writing and
delivered personally or mailed by certified or registered mail, postage prepaid,
return receipt requested, or reputable overnight courier service, addressed, if
to Investor at the address first written above and if to Producer at the address
first written above with courtesy copies to Xxxx Xxxxx, CNB Capital, 000 Xxx
Xxxxxx, Xxxxxxxxxx, XX 00000 and other address either party from time to time
designates to the other as provided above.
9. GOVERNING LAW. This agreement shall be construed in accordance with
and governed by the laws of the State of New York.
10. WAIVER. No failure or delay by Investor in acting with respect to the
terms of the Agreement and the Note shall constitute a waiver of any breach,
default or failure of condition under this Agreement and the Note. A waiver of
any term of the Agreement and the Note must be made in writing and shall be
limited to the express written terms of such waiver. A waiver or release with
reference to any one event shall not be construed as continuing, as remedy or
recourse as to a subsequent event.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
TOTAL FILM GROUP.
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxx
Xxxx Xxxxxx AN AUTHORIZED SIGNATORY
/s/ Xxxxx X. Xxxxx /s/ Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
EXHIBIT A
PROMISSORY NOTE
$2,500,000 $2,500,000
UNITED STATES OF AMERICA
State of New York
TWO MILLION FIVE HUNDRED THOUSAND DOLLAR
Dated: April 20, 2000
Maturity Date: August 15, 2000
This Note is in the amount of $2,500,000
FOR VALUE RECEIVED, the undersigned TOTAL FILM GROUP, a Delaware
Corporation whose principal business address is 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxx, XX 00000 ("Producer") hereby promises to pay the following individuals
("Investors") a total of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000)
in lawful money of the United States on or before the Maturity Date.
XXXXXXX XXXXX, an individual whose address is
0 Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("Investor") $1,900,000
XXXXXX X. XXXXXX, an individual whose address is
00 Xxxxxx Xxxx, Xxxxx Xxxxx, XX 00000 ("Investor") $250,000
XXXX XXXXXX, an individual whose address is
000 X. 00xx Xxxxxx, Xxx. 0X, Xxx Xxxx, XX 00000 ("Investor") $250,000
XXXXX X. XXXXX, an individual whose address is
00000 Xxxxx Xxxxxxxxx, Xxx Xxxx Xxxxxxxxxx, XX 00000 ("Investor") $100,000
THIS NOTE AND THE RIGHTS AND REMEDIES OF THE INVESTORS ARE SUBJECT TO THE
TERMS AND CONDITIONS AS SET FORTH IN THAT CERTAIN AGREEMENT DATED AS OF APRIL
20, 2000 BY AND BETWEEN PRODUCER AND INVESTORS.
IN WITNESS WHEREOF, Producer has caused these presents to be signed and
sets his hand hereunto the day and year first above written.
TOTAL FILM GROUP:
/s/ Xxxxxx Xxxxx
An Authorized Signatory
STATE of California )
COUNTY of Los Angeles )
I, Xxxxxxxxx Xxx, a Notary Public in and for County and State, do hereby
certify that Xxxxxx Xxxxx, personally known to me to be the President of the
corporation whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged and sore that the statements set
forth in the foregoing instrument are true and correct and that he signed and
delivered the said instrument as his free and voluntary act for the uses and
purposes therein set forth
Given under my hand and official seal, this 25th day of April, 2000.
/s/ Xxxxxxxxx Xxx
Notary Public
(OFFICIAL SEAL)
Total Film Group, Inc.
Extension of Payment Date of Promissory Note
Total Film Group, Inc. ("Total") has entered into certain promissory notes dated
as of April 20, 2000 with the lenders listed below:
Xxxxxxx Xxxxx $ 1,900,000
Xxxxxx Xxxxxx $ 250,000
Xxxx Xxxxxx $ 250,000
Xxxxx Xxxxx $ 100,000
-----------
Total $ 2,500,000
The maturity date for the above notes is August 15, 2000 whereby the principal
of $2,500,000 and the premium of $750,000 (Article 2 of the Memorandum of
Agreement) is hereby due for a total payment of $3,250,000 to the lenders. This
payment does not reflect the lenders six percent interest in the adjusted gross
proceeds of the "Untitled" 'N Sync Project" (Article 4 of the Memorandum
Agreement).
It is the desire of Total to extend the payment date of the principal and
premium of the above promissory notes.
As such, the lenders hereby extend the payment date of principal and interest
for a period up to ninety days to November 13, 2000 in consideration of the
following:
The Company will issue the lenders a total of 166,667 shares of the
Company's common stock on the first day of each thirty day extension period
that the principal and premium are not repaid in full. 166,667 shares will
be issuable on the following dates:
August 15, 2000
September 14, 2000
October 14, 2000
If the principal and premium are not repaid by November 13, 2000, the Company
and the lenders will use their best efforts to enter into an amendment to
further extend the notes.
The Company also agrees to pay a fee to Capital Research, Ltd. Equal to $37,500
such fee to be payable, at the Company's option in cash, or in shares of common
stock having a deemed value of $1.50 per share. Accordingly, if the entire fee
was paid in shares of common stock, the Company would be required to issue
25,000 shares of common stock to pay such fee in full.
Except as expressly provided herein, the Promissory Notes and the Memorandum of
Understanding will remain in full force and effect as originally executed and
delivered by the parties hereto. This Letter supercedes any prior understanding
or agreement, written or oral, among the parties hereto relating to the subject
matter hereof.
On behalf of Total Film Group, Inc.
/s/ Xxxxxx Xxxxx dated this 01-Aug-00
On behalf of the Lenders
/s/ Xxxxxxx Xxxxx dated this 01-Aug-00
/s/ Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
/s/ Xxxxx X. Xxxxx
