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 herein
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
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 and amended in August 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). The maturity date was extended per the August
2000 amendment to November 13, 2000 in consideration of the issuance of
unregistered common shares of the company.
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 December 31, 2000 in consideration of the following:
The Company will issue the lenders a total of 350,000 shares of the
Company's common stock on the first day of the extension period that
the principal and premium are not repaid in full, which is November 13,
2000
If the principal and premium are not repaid by December 31, 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 on this date November 10, 2000
On behalf of the Lenders
/s/ Xxxxxxx Xxxxx on this date November 10, 2000
-----------------
Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxx on this date November 10, 2000
-----------------
Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxx on this date November 10, 2000
---------------
Xxxx Xxxxxx
/s/ Xxxxx Xxxxx on this date November 10, 2000
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Xxxxx Xxxxx
