<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
____________________
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934.
____________________
For Quarter Ended December 31, 1995 Commission file number 0-18410
THE PRODUCERS ENTERTAINMENT GROUP LTD.
(Exact name of registrant as specified in its charter)
Delaware 95-4233050
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9150 Wilshire Boulevard, Suite 205, Beverly Hills, CA 90212
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (310) 285-0400
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock - February 12, 1996 - 12,733,496
<PAGE> 2
THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 188,282 $ 832,754
Accounts receivable, net 715,618 652,074
Notes receivable, net - 402,842
Receivables from related parties 90,682 116,229
Film costs, net 2,916,534 2,104,503
Fixed assets, net 66,893 76,439
Other assets 213,107 199,829
------------ ------------
$ 4,191,116 $ 4,384,670
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $ 310,759 $ 847,595
Deferred participations based on estimated
revenues - 350,000
Deferred revenue 1,870,694 598,708
------------ ------------
Total liabilities 2,181,453 1,796,303
------------ ------------
Shareholders' equity:
Preferred Stock, $.001 par value.
Authorized 10,000,000 shares;
Issued 1,000,000 shares - Series A 1,000 1,000
Common stock, $.001 par value.
Authorized 50,000,000 shares;
issued 13,855,932 and 11,388,770 shares 13,856 11,389
Additional paid-in capital 16,103,747 15,321,214
Accumulated deficit (12,298,748) (11,735,044)
------------ ------------
3,819,855 3,598,559
Treasury stock 1,122,436 shares, at cost (1,010,192) (1,010,192)
Notes receivable from related parties from
sales of common stock, net of imputed
interest discount (800,000) -
------------ ------------
Net shareholders' equity 2,009,663 2,588,367
------------ ------------
$ 4,191,116 $ 4,384,670
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 3
THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended December 31,
------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Revenues $ 1,674,894 $ 4,648,488
Film amortization 697,000 2,306,734
----------- -----------
977,894 2,341,754
General and administrative expenses 1,784,035 1,956,782
----------- -----------
Operating income (loss) (806,141) 384,972
Income from settlement of lawsuits 217,633 -
Interest income 24,804 13,440
Interest and financing expense - (296,741)
----------- -----------
Net income (loss) (563,704) 101,671
Dividend requirement of Series A
Preferred Stock (212,500) -
----------- -----------
Net income (loss) applicable to
common shareholders $ (776,204) $ 101,671
=========== ===========
Net income (loss) per share $ (.07) $ .01
=========== ===========
Average common shares outstanding 10,960,456 9,989,897
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended December 31,
-------------------------------
1995 1994
---------- ---------
<S> <C> <C>
Revenues $ 601,493 $ 555,624
Film amortization 63,000 115,000
---------- ---------
538,493 440,624
General and administrative expenses 970,713 973,213
---------- ---------
Operating (loss) (432,220) (532,589)
Income from settlement of lawsuits 217,633 -
Interest income 17,197 6,118
Interest and financing expense - (296,741)
---------- ---------
Net Loss (197,390) (823,212)
Dividend requirement of Series A
Preferred Stock (106,250) -
---------- ---------
Net (loss) applicable to common
shareholders $ (303,640) $(823,212)
========== =========
Net (loss) per share $ (.03) $ (.08)
========== =========
Average common shares outstanding 11,577,246 9,838,434
========== =========
</TABLE>
See notes to condensed consolidated financial statements.
4
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THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Additional
Preferred Common Paid-In
Stock Stock Capital Deficit Net
------ ------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance, June 30,
1995 $1,000 11,389 15,321,214 (11,735,044) 3,598,559
Dividends on Series
A preferred stock 367 (367)
Sale of shares of
common stock to
related parties
for notes 2,100 782,900 785,000
Net (loss) (563,704) (563,704)
------ ------ ---------- ----------- ----------
Balance,
December 31,
1995 $1,000 13,856 16,103,747 (12,298,748) 3,819,855
====== ====== ========== ===========
Less:
Treasury stock (1,010,192)
Notes receivable
from related parties
from sales of common
stock, net (800,000)
----------
Net Shareholders' Equity $2,009,693
==========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended December 31,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(563,704) $ 101,671
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 713,712 2,322,551
Income from settlement of lawsuits (217,633) -
Amortization of imputed interest discount (15,000) -
Issuance of shares of stock for interest - 275,000
Changes in assets and liabilities:
Decrease (increase) in receivables 194,456 (117,320)
(Increase) decrease in other assets (13,278) 37,645
(Decrease) in accounts payable and accrued expenses (65,759) (314,189)
(Decrease)in deferred revenues (598,708) (3,308,276)
--------- ----------
Net cash (used in) operating activities (565,914) (1,002,918)
--------- ----------
Cash flows from investing activities:
Additions to film costs, net of payments received (96,939) (1,433,304)
Capital expenditures (7,166) (9,913)
(Decrease) increase in due from related parties 25,547 (275,890)
--------- ----------
Net cash (used in) investing activities (78,558) (1,719,107)
--------- ----------
Cash flows from financing activities:
Sale of units in public offering - 4,176,467
Borrowings (repayments), net - (588,750)
Proceeds from exercise of stock options - 454,375
--------- ----------
Net cash provided by financing activities - 4,042,092
--------- ----------
Net increase (decrease) in cash and cash equivalents (644,472) 1,320,067
Cash and cash equivalents at beginning of period 832,754 964,387
--------- ----------
Cash and cash equivalents at end of period $ 188,282 $2,284,454
========= ==========
</TABLE>
See notes to condensed consolidated financial statements.
6
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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
As disclosed in note (2), during the six months ended December 31,
1995, the Company sold an aggregate of 2,100,000 shares of its common stock to
related parties in exchange for promissory notes.
As disclosed in note (3), the Company has agreed to settle various
litigation relating to DEC.
As disclosed in note (6) the Company has reduced the cost of certain
of its completed projects by $235,622.
As disclosed in note (7), during the six months ended December 31,
1995, the Company issued a total of 368,162 shares of its common stock in
payment of dividends on its Series A Preferred Stock.
7
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THE PRODUCERS ENTERTAINMENT GROUP LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
December 31, 1995
(1) Basis of Presentation
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
accruals) which are, in the opinion of management, necessary to present fairly
the results of operations for the periods presented.
The information contained in this Form 10-QSB should be read in
conjunction with the audited financial statements filed as part of the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1995.
(2) Sale of Shares of Common Stock to Related Parties for Notes
As of November 14, 1995, the Company sold an aggregate of 2,100,000
shares of its common stock to related parties in exchange for an aggregate of
$1,050,000 principal amount of promissory notes. Of these shares, 2,000,000
were sold to a company that provides the Company with the services of its
President and Chief Executive Officer. The 100,000 balance of these shares were
sold to an officer and director of the Company.
The principal amount of the promissory notes received by the Company
are payable as follows: April 1, 1997 - $131,250; October 1, 1998 - $131,250;
and October 1, 2000 - $787,500. Interest on these notes is computed at the
annual rate of 7%, compounded semi-annually and is payable with the principal
of the notes. The notes are secured by the purchased shares with the personal
liability of the purchaser limited to 25% of the principal amount
(aggregate-$262,500) plus accrued interest thereon.
The Company has the right to reacquire these shares in exchange for
the promissory notes received in the event that the Company's President and
Chief Executive Officer and the other officer who purchased shares are not
providing specified services to the Company through certain dates. If these
services are not provided through April 1, 1996, the Company may reacquire 50%
(aggregate - 1,050,000) of these shares. If the Company's President and Chief
Executive Officer and the other officer do not provide these services through
June 30 and October 1, 1996, respectively the Company may reacquire 500,000 and
50,000 shares, respectively (aggregate - 550,000). If the Company's President
and Chief Executive Officer does not provide these services through October 1,
1997, the Company may reacquire the remaining 500,000 shares. The Company's
right to reacquire shares for promissory notes will
8
<PAGE> 9
also terminate upon, among other things, a change in control of the Company,
the death or disability of the individuals providing these services, or
termination of their employment agreements.
The promissory notes received by the Company were recorded at their
principal amount less an imputed interest discount in the aggregate amount of
approximately $265,000. This imputed interest discount is being amortized over
the term of the notes using the interest method to provide an effective
interest rate of 12% per annum. During the six months ended December 31, 1995,
the Company recorded approximately $15,000 of interest income on these notes.
The difference between this imputed interest rate and the stated interest rate
on the notes may be deemed to be additional compensation to the purchasers of
the shares.
(3) Settlement of Litigation
In December 1995, the Company agreed to settle various litigation
relating to DSL. In pertinent part, this settlement provides for the payment to
the Company of $258,000 (which is included in accounts receivable), elimination
of the $402,842 note receivable from the former President of DSL, the transfer
of a completed project with a carrying amount of $222,980 to DEG and the
release of the Company's $350,000 obligation to pay a portion of future
revenues from completed projects to the former owner of DSL. In connection with
this settlement, the Company has reduced its accounts payable and accrued
expenses by $235,455 representing the amounts previously recorded related to
DSL and this litigation. This settlement also provides for a reduction in the
Company's ownership of DEG from 19.9% to 5%. The effects of this settlement
have been reflected in the accompanying condensed consolidated statements of
operations as a separate item.
(4) Employment Agreements
The Company has entered into agreements for the services of certain of
its executive officers and others. These agreements expire on June 30, 1998 and
provide for aggregate annual payments by the Company of $592,000.
(5) Litigation With Former Officer and Director
As of November 14, 1995, the Company sold 1,500,000 shares of its
common stock to one of its then officers and directors in exchange for $750,000
principal amount of promissory notes. This sale was made on the same terms as
the sale of shares to the company that provides the Company with the services
of its President and Chief Executive Officer as described in note (3). The
Company also entered into an employment agreement with this officer and
director which provided for, among other things, annual compensation of
$262,000 through June 30, 1998.
9
<PAGE> 10
In December 1995, the Company terminated the employment of this
individual and the related employment agreement. As a result of such
termination, the shares of common stock sold to this individual and the related
notes received by the Company for such shares were cancelled. The Company
subsequently filed a legal action against this individual claiming, among other
things, breach of fiduciary duty and return of amounts previously paid. This
individual has filed a cross-complaint against the Company and its President
and Chief Executive Officer claiming, among other things, that his employment
with the Company was improperly terminated and his employment stock purchase
agreements were improperly cancelled. This cross-complaint seeks substantial
damages.
(6) Reduction of Film Costs
During the six months ended December 31, 1995, the Company reduced the
carrying amount of certain of its completed projects by $235,622 representing
the amount previously recorded as accounts payable and accrued expenses for
additional estimated expenditures relating to these projects that were not
incurred.
(7) Issuance of Shares of Common Stock for Preferred Stock Dividend
During the six months ended December 31, 1995, the Company issued an
total of 368,162 shares of its common stock in payment of the dividend on its
Series A Preferred Stock.
(8) Income (loss) Per Share
Income (loss) per share has been computed based on the weighted
average number of common and common equivalent shares outstanding during the
periods. In 1995, (loss) per common share has been computed after deducting the
dividend requirement of the Series A Preferred Stock. For the six months ended
December 31, 1994, primary income per share was substantially the same as fully
diluted income per share.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The amount of revenues earned by the Company in any one period is
dependent on, among other things, projects completed during any such period and
the distribution of completed projects. Revenues from producers and other fees
are primarily dependent on the number of projects being produced and the
agreements relating to such projects. Accordingly, the amount of revenues in
any period are not necessarily indicative of future revenues.
SIX MONTHS ENDED DECEMBER 31, 1995 AS COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1994
Revenues for the six months ended December 31, 1995 included revenues
from the distribution of completed projects, producer fees from currently
airing television series and a made-for-television movie which is in the
production stage and personal management fees. Revenues for the six months
ended December 31, 1994 included approximately $3,603,000 of production and
distribution revenues from Future Quest, which aired on PBS, fees from the
series Dave's World, which is airing on CBS and personal management fees.
Amortization of film costs for the six months ended December 31, 1995 and 1994
was $697,000 and $2,306,734, respectively using the individual film forecast
method.
General and administrative expenses for the six months ended December
31, 1995 were $1,784,035 as compared to $1,956,782 for the six months ended
December 31, 1994. The $172,747 decrease in general and administrative expenses
was primarily attributable to the termination of certain unprofitable
operations of DSL, including related compensation and other expenses, somewhat
offset by legal fees incurred in connection with lawsuits with the former
President and owner of DSL. The level of general and administrative expenses is
somewhat dependent on the levels of the Company's future operations.
During the six months ended December 31, 1995, the Company agreed to
settle various litigation relating to DSL. The Company has recorded $217,663 of
income relating to this settlement.
During the six months ended December 31, 1995, the Company recorded
approximately $15,000 of interest income on notes receivable from related
parties that were received in connection with sales of the Company's common
stock. Exclusive of this interest income, the decrease in interest income was
primarily due to a reduction in funds available for investment and lower
interest rates. Interest and financing expense for fiscal 1994 primarily
11
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consists of interest paid on the Company's 7% subordinated notes including
$275,000 representing the market value of the shares of common stock issued to
the noteholders upon the repayment of the notes.
THREE MONTHS ENDED DECEMBER 31, 1995 AS COMPARED TO THREE MONTHS ENDED DECEMBER
31, 1994
Revenues for the three months ended December 31, 1995 included
revenues from the distribution of completed projects, producer fees from
currently airing television series and a made-for-television movie which is in
the production stage and personal management fees. Revenues for the three
months ended December 31, 1994 primarily consisted of production and
distribution revenues from completed projects, fees from the series Dave's
World, which is airing on CBS and personal management fees. Amortization of
film costs for the three months ended December 31, 1995 and 1994 was $63,000
and $115,000, respectively using the individual film forecast method.
General and administrative expenses for the three months ended
December 31, 1995 were $1,000,713 as compared to $973,213 for the three months
ended December 31, 1994. The increase in general and administrative expenses
was primarily attributable to the termination of certain unprofitable
operations of DSL, including related compensation and other expenses, offset by
legal fees incurred in connection with lawsuits with the former President and
owner of DSL.
During the three months ended December 31, 1995, the Company agreed to
settle various litigation relating to DSL. The Company has recorded $217,663 of
income relating to this settlement.
During the three months ended December 31, 1995, the Company recorded
approximately $15,000 of interest income on notes receivable from related
parties that were received in connection with sales of the Company's common
stock. Exclusive of this interest income, the decrease in interest income was
primarily due to a reduction in funds available for investment and lower
interest rates. Interest expense for fiscal 1994 primarily consists of interest
paid on the Company's 7% subordinated notes including $275,000 representing the
market value of the shares of common stock issued to the noteholders upon the
repayment of the notes.
12
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LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1995, the Company had cash and cash equivalents of
$188,282 and accounts receivable (including $258,000 recorded in connection
with the settlement of various litigation relating to DSL) of $715,618
(aggregate - $903,900). At December 31, 1995, the Company also had accounts
payable and accrued expenses of $310,579 which included approximately $220,000
that was received in connection with the production of a made-for-television
movie. The Company is required to expend funds on the production of this movie.
The Company's cash commitments for the next twelve months include base
compensation to its officers and key independent contractors of approximately
$1,230,000 and minimum office rent of approximately $172,000. The lease for the
Company's office terminates on September 30, 1996. These obligations aggregate
approximately $1,402,000. The Company also incurs overhead and other costs such
as salaries, related benefits, office expenses, professional fees and similar
expenses. For the six months ended December 31, 1995, general and
administrative expenses, including compensation and rent, aggregated
approximately $1,784,000. The Company also expends funds on the production and
development of projects. The Company's cash receipts are principally derived
from exhibition and distribution of its completed projects and producers fees.
The Company's revenues are affected by various factors including the timing of
the exhibition and distribution of its completed projects and the number of
projects produced for which the Company receives producers fees. Therefore, the
Company is unable to accurately predict the level or timing of its future cash
receipts.
The Company is obligated to pay dividends on the shares of Series A
Preferred Stock which were sold in its December 1994 public offering. Dividends
on this Series A Preferred Stock, which aggregate $425,000 annually, may be
paid in shares of the Company's common stock.
The Company's operations have been primarily financed by the net
proceeds received from public offerings of its securities and exercise of stock
options and warrants. As of December 31, 1995, the Company's stock options and
warrants were exercisable at prices substantially above the market price of the
Company's common stock. For the six months ended December 31, 1995, the Company
incurred an operating loss of $806,141 and used $565,914 of cash in its
operations.
If the Company continues to incurr losses, use cash in its operations
and expend funds on development and production of projects, it will be required
to raise additional capital and/or borrow funds. The Company has no
arrangements for external sources of liquidity such as bank lines of credit. If
external sources of
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funds are not available to the Company and its future cash receipts are not
sufficient to meet its cash needs, the Company will be required to take certain
actions. These actions may include reductions in the compensation of it
officers and key independent contractors, reductions in office staff and other
personnel, and a reduction in the production and development of projects that
it will fund. The Company has no material commitments for capital expenditures.
The Company has not made any specific plans or entered into any agreements to
reduce the level of its expenditures in the event that such reductions become
necessary.
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PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Producers Entertainment Group Ltd. vs. Ronald Lightstone was
commenced in the Superior Court of the State of California for the County of
Los Angeles on January 3, 1996. In this action, the Company claims, among other
things, that Mr. Lightstone breached his fiduciary duty to the Company and
seeks return of amounts previously paid to him. On January 8, 1996, Mr.
Lightstone file a cross-complaint in the same court entitled Ronald Lightstone
vs. The Producers Entertainment Group Ltd, Irwin Meyer, et. al. In his
cross-complaint, Mr. Lightstone claims, among other things, that his employment
with the Company was improperly terminated and his employment and stock
purchase agreements with the Company were improperly cancelled. Mr.
Lightstone's cross-complaint seeks substantial damages.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.20 Production Agreement dated as of October 1, 1995 between
The Producers Entertainment Group Ltd. and Mountaingate
Productions LLC f/s/o Irwin Meyer.
10.21 Employment Agreement dated as of October 1, 1995 between
The Producers Entertainment Group Ltd. and Irwin Meyer.
10.22 Employment Agreement dated as of January 1, 1996 between
The Producers Entertainment Group Ltd. and Charles Weber.
10.23 Stock Purchase Agreement (including promissory note)
dated as of November 14, 1995 between The Producers
Entertainment Group Ltd. and Mountaingate Productions LLC.
10.24 Stock Purchase Agreement (including promissory note)
dated as of November 14, 1995 between The Producers
Entertainment Group Ltd. and Charles Weber.
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the three months ended December 31, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
Date: February 13, 1996 /s/ Irwin Meyer
---------------
Irwin Meyer
President and Chief
Executive Officer
February 13, 1996 /s/ Charles J. Weber
--------------------
Charles J. Weber
Principal Financial and
Accounting Officer
16
<PAGE> 1
Exhibit 10.20
PRODUCTION AGREEMENT
THIS AGREEMENT by and among THE PRODUCERS ENTERTAINMENT GROUP LTD.
(the "Company"), a Delaware corporation, and MOUNTAINGATE PRODUCTIONS LLC
("MOUNTAINGATE") F/S/O IRWIN MEYER ("EMPLOYEE") and others, dated as of the 1st
day of October, 1995.
W I T N E S S E T H
WHEREAS, the Company presently engages Mountaingate; and
WHEREAS, the Company wishes to continue to engage Mountaingate for the
period provided in this Agreement, and Mountaingate is willing to continue to
provide the services of the Employee to the Company on the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
1. Engagement. The Company hereby agrees to continue to engage
Mountaingate, and the Mountaingate hereby agrees to continue to render the
Employee's services with the Company, on the terms and subject to the
conditions set forth herein. Mountaingate acknowledges that it is of the
essence of this Agreement that Mountaingate provide the services of Irwin Meyer
and that all references to Employee which are contained in this Agreement
specifically refer to Irwin Meyer.
2. Term of Engagement. The term of the Mountaingate's engagement
under this Agreement (the "Term") shall commence as of October 1, 1995, and
shall end on June 30, 1998, unless extended or terminated earlier in accordance
with Section 5.
3. Duties and Responsibilities.
(a) Responsibilities. Company hereby
engages Mountaingate to provide the exclusive and full time services of
Employee and the services of others as producers and/or executive producers to
develop and produce motion picture and television programs to financiers,
distributors, television networks, syndicators, cable systems, motion picture
studios and other buyers or licensees of such product throughout the world.
Pursuant to the terms and conditions hereof, Mountaingate hereby accepts such
engagement. Mountaingate shall cause Employee to render all services usually
and customarily rendered by and required of executives similarly employed in
the entertainment industry and such other services as may reasonably required
by the Company.
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(b) Place of Performance. During the Term, however,
except for any period where Employee is in production on a project,
Mountaingate's/Employee's office shall be located at the principal executive
offices of the Company, which shall be in the Los Angeles metropolitan area,
except for required business travel consistent with the Employee's position.
(c) Business Time. During the Term,
Mountaingate/Employee agree to devote its full business time during normal
business hours to the business and affairs of the Company and to use its best
efforts to perform faithfully, diligently and competently the responsibilities
assigned to him hereunder, to the extent necessary to discharge such
responsibilities, except for (i) time spent serving on corporate, civic or
charitable boards or committees only if and to the extent not substantially
interfering with the performance of such responsibilities, (ii) periods of
vacation, disability and sick leave to which he is entitled, and (iii)
reasonable activities having a charitable, educational or other public interest
purpose.
4. Compensation.
(a) Annual Guarantee. During the Term, Mountaingate
shall receive a minimum annual guarantee ("Annual Guarantee") equal to
$262,000, payable in accordance with the customary payroll as in effect from
time to time for senior executives of the Company.
(b) Expenses. During the Term, Mountaingate shall be
entitled to receive prompt reimbursement for all reasonable business-related
expenses incurred by Mountaingate in accordance with the policies and
procedures of the Company as applicable to its senior executives.
(c) Automobile Reimbursement. During the Term,
Mountaingate shall be entitled to receive a monthly automobile reimbursement in
the amount of $1,500, payable monthly on the fifteenth day of each month.
5. Termination.
(a) Death or Disability. Mountaingate's engagement
pursuant to this Agreement shall terminate automatically upon the Employees's
(specifically, Irwin Meyer) death. The Company may terminate this Agreement in
the event of the Disability of Employee (specifically, Irwin Meyer) by giving
to the Mountaingate notice of its intention in accordance with Section 5(e)
unless Employee returns to the performance of the essential
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functions of his employment within 30 days after receipt of such notice. For
purposes of this Agreement, "Disability" means any physical or mental condition
that renders the Employee (specifically, Irwin Meyer) unable to perform the
essential functions of his employment for 90 consecutive days or for a total of
180 days in any period of 360 consecutive days.
(b) Voluntary Termination After Change in Control.
Notwithstanding anything in this Agreement to the contrary, the Mountaingate
may voluntarily terminate this Agreement at any time, after a Change in
Control, (i) for any reason upon six months' written notice to the Company, or
(ii) if termination is for Good Reason or on account of the Employee's serious
illness, upon written notice pursuant to Section 5(e) but without any notice
period. In the event of any termination pursuant to this Section 5(b), neither
Mountaingate nor Employee shall have any further obligation to the Company
under this Agreement, except as provided in Section 9.
(c) Cause. The Company may terminate this Agreement for
Cause. For purposes of this Agreement, "Cause" means:
Employee's engaging in gross misconduct materially and demonstrably injurious
to the Company; failure to perform the services required hereunder; or
conviction by final judgment of a felony constituting fraud, theft,
embezzlement or homicide.
(d) Good Reason. Mountaingate may terminate this
Agreement for Good Reason. For purposes of this Agreement, "Good Reason" means
(i) a material reduction in the nature or scope of the Employee's position,
title, status, authority, duties, powers or functions on the date of this
Agreement; (ii) the assignment to Employee of any material duties which are not
commensurate with or at least as prestigious as the Employee's duties and
responsibilities as contemplated by this Agreement; (iii) a material breach by
the Company of any of the provisions of this Agreement; (iv) the relocation of
the Company's principal executive offices to a location outside the Los Angeles
metropolitan area; or (v) the failure by the Company to obtain an agreement,
reasonably satisfactory to Mountaingate, from any successor to assume and agree
to perform this Agreement, as contemplated by Section 12(b). After a Change in
Control, in addition to items (i) through (v), "Good Reason" shall include (vi)
a determination by the Employee, in his sole discretion, during the 30-day
period commencing 180 days following a Change in Control, that due to the
Change in Control neither he nor Mountaingate can any longer effectively
perform their duties.
(e) Notice of Termination. Any termination by the
Company for Cause or Disability or by Mountaingate for Good Reason shall be
communicated by a written notice (a "Notice of
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<PAGE> 4
Termination") to the other party hereto given in accordance with Section 13(d).
A "Notice of Termination" shall set forth in reasonable detail the events
giving rise to such termination.
(f) Date of Termination. For purposes of this Agreement,
the term "Date of Termination" means (i) in the case of termination for
Disability, 30 days after Notice of Termination is given (provided that the
Employee shall not have returned to the full-time performance of his duties
during such 30-day period); (ii) in the case of termination for Cause, a date
specified in the Notice of Termination (which shall not be less than 30 days
nor more than 60 days from the date such Notice of Termination is given); (iii)
in the case of any other termination for which a Notice of Termination is
required, the date of receipt of such Notice of Termination or, if later, the
date specified therein, as the case may be; and (iv) in all other cases, the
actual date on which this Agreement terminates during the Term.
6. Obligations of the Company Upon Termination.
(a) Death, Disability, Cause and Voluntary Termination.
If at any time before or after a Change in Control that this Agreement is
terminated by the Company during the Term by reason of the Employee's
(specifically, Irwin Meyer) death, Disability or for Cause, or is voluntarily
terminated by Mountaingate (other than for Good Reason), the Company shall have
no further obligation to either Mountaingate or the Employee or the Employee's
legal representatives other than (i) those obligations earned for Annual
Guarantee and payments under any Company bonus plan that have accrued at the
Date of Termination (the "Accrued Obligations"), (ii) those obligations
expressly provided under any of the plans referred to in Section 4(e) (the
"Benefit Rights") and (iii) upon a termination of the Executive's employment by
reason of Employee's death, the payment provided in Section 6(a)(iii), if
applicable, shall be paid to Mountaingate, in a lump sum in cash within 15 days
of the Date of Termination.
(b) Prior to Change in Control, Termination by the
Company other than for Cause or Disability and
Termination by the Mountaingate for Good Reason.
(i) Lump Sum Payments. If during the Term and prior to a
Change in Control, the Company terminates this Agreement other than for Cause
or Disability, or if Mountaingate terminates this Agreement for Good Reason,
the Company shall provide the Benefit Rights and shall pay to Mountaingate in a
lump sum in
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<PAGE> 5
cash within 15 days of the Date of Termination the sum of the following
amounts: (A) the Accrued Obligations; plus (B) an amount equal to the product
of (1) one-twelfth times (2) the sum of the Annual Guarantee plus the average
bonus (if any) for the three years ended before the Date of Termination, times
(3) the number full or partial of months remaining in the unexpired term of the
Term, but in no event less than twelve months (such period being the "Severance
Period").
(ii) Discharge of the Company's Obligations. The Company
shall have no further obligations to either Mountaingate or the Employee in
respect of any termination described in this Section 6(b).
(c) Following Change in Control, Termination by the Company other
than for Cause or Disability and Termination by Mountaingate
for Good Reason.
(i) Lump Sum Payments. If during the Term and following
a Change in Control, the Company terminates this Agreement other than for Cause
or Disability, or Mountaingate terminates this Agreement for Good Reason, the
Company shall provide the Benefits Rights and shall pay to Mountaingate in a
lump sum in cash within 15 days of the Date of Termination the sum of the
following amounts: (a) the Accrued Obligations; and (B) an amount equal to 2.99
times the sum of the amounts described in clause (2) of Section 6(b)(i)(B).
(ii) Discharge of the Company's Obligations. The Company
shall have no further obligations to either Mountaingate or the Employee in
respect of any termination described in this Section 6(c).
(d) Change in Control. A Change in Control shall be deemed to
have occurred:
(1) the shareholders of the Company shall approve (i) any merger,
consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of
the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the
foregoing being an "Acquisition Transaction") where (x) the
shareholders of the Company immediately prior to such
Acquisition Transaction would not
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<PAGE> 6
immediately after such Acquisition Transaction beneficially
own, directly or indirectly, shares representing in the
aggregate more than 65% of (A) the then outstanding common
stock of the corporation surviving or resulting from such
merger, consolidation or recapitalization or acquiring such
assets of the Company, as the case may be (the "Surviving
Corporation") (or of its ultimate parent corporation, if any)
and (B) the Combined Voting Power (as defined below) of the
then outstanding Voting Securities (as defined below) of the
Surviving Corporation (or of its ultimate parent corporation,
if any) or (y) the Incumbent Directors at the time of the
initial approval of such Acquisition Transaction would not
immediately after such Acquisition Transaction constitute a
majority of the Board of Directors of the Surviving
Corporation (or of its ultimate parent corporation, if any) or
(ii) any plan or proposal for the liquidation or dissolution
of the Company; or
(2) any Person (as defined below) shall become the beneficial
owner (as defined in Rule 13d-3 and 13- d-5 under the Exchange
Act), directly or indirectly, of securities of the Company
representing in the aggregate 20% or more of either (i) the
then outstanding shares of Stock, or (ii) the Combined Voting
Power of all then outstanding Voting Securities of the
Company; provided; however that notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to have
occurred for purposes of this subsection (2) solely as the
result of:
(i) an acquisition of securities by the Company which, by
reducing the number of shares of Stock or other
Voting Securities outstanding, increases (i) the
proportionate number of shares of Stock beneficially
owned by any Person to 20% or more of the shares of
Stock then outstanding or (ii) the proportionate
voting power represented by the Voting Securities
beneficially owned by
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<PAGE> 7
any Person to 20% or more of the Combined Voting
Power of all then outstanding Voting Securities; or
(ii) an acquisition of securities directly from the
Company except that this subsection (ii) shall not
apply to:
(A) any conversion of a security that was not
acquired directly from the Company; or
(B) any acquisition of securities if the
Incumbent Directors at the time of the
initial approval of such acquisition would
not immediately after (or otherwise as a
result of) such acquisition constitute a
majority of the Board;
provided, however, that if any Person referred to in
subsections (i) or (ii) of this clause (2) shall
thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities
of the Company (other than pursuant to a stock split,
stock dividend or similar transaction or an
acquisition exempt under such subsection (ii), then a
Change in Control shall be deemed to have occurred
for purposes of this clause (2).
For purposes of this Agreement:
(A) "Person" shall mean any individual, entity
(including, without limitation, any
corporation, partnership, trust, joint
venture, association or governmental body and
any
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<PAGE> 8
successor to any such entity) or group (as
defined in Sections 13(d)(3) or 14(d)(2) of
the Exchange Act and the rules and
regulations thereunder); provided, however,
that Person shall not include Mountaingate,
the Employee, the Company, any of its
majority-owned subsidiaries, any executive
benefit plan of the Company or any of its
majority-owned subsidiaries or any entity
organized, appointed or established by either
Mountaingate or the Employee, the Company or
any of its majority-owned subsidiaries for or
pursuant to the terms of any such plan, or
any of their affiliates;
(B) "Voting Securities" shall mean all securities
of a corporation having the right under
ordinary circumstances to vote in an election
of the board of directors of such
corporation; and
(C) "Combined Voting Power" shall mean the
aggregate votes entitled to be cast generally
in the election of directors of a
corporation by holders of then outstanding
Voting Securities of such corporation.
Notwithstanding anything contained in this Paragraph 6, no change in control
shall have occurred as a result of the pending merger between Greenlight
Communications, Inc. and the Company.
7. No Mitigation: No Offset. In no event shall either
Mountaingate and Employee shall be obligated to seek other
8
<PAGE> 9
employment by way of mitigation of the amounts payable to Mountaingate under
any of the provisions of this Agreement. Any amounts that may be earned by
either Mountaingate or Employee other than from the Company after the Date of
Termination shall not reduce the Company's obligation to make any payments
hereunder. The amounts payable by the Company hereunder shall not be subject
to any right of set-off that the Company may assert against either Mountaingate
or Employee.
8. Noncompetition.
(a) Scope. In the case of the termination of this
Agreement, including due to the expiration of the Term, neither Mountaingate
nor Employee shall, for one year following the Date of Termination, (a) divert
to any competitor of the Company in the business conducted by the Company (the
"Designated Industry") any active project of the Company; or (b) solicit or
encourage any officer, employee or consultant of the Company to leave their
employ for employment by or with any competitor of the Company in the
Designated Industry. If at any time the provisions of this Section 8 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 9 shall be
considered divisible and shall become and be immediately amended to apply only
to such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter; and both Mountaingate and Employee agree that this Section 8 as so
amended shall be valid and binding as though any invalid or unenforceable
provision had not been included herein. Nothing in this Section 8 shall
prevent or restrict either Mountaingate or Employee from engaging in any
business or industry other than the Designated Industry in any capacity.
(b) Irreparable Harm. Mountaingate and Employee agree
that the remedy at law for any breach of this Section 8 shall be inadequate and
that the Company shall be entitled to injunctive relief.
9. Indemnification. The Company shall indemnify and hold
harmless Mountaingate, its officers, directors and shareholders, as well as,
Employee his heirs and personal representatives to the fullest extent permitted
by applicable law, as now or hereafter in effect, with respect to any acts,
omissions or events that occurred while either Mountaingate or Employee was
engaged to render services to the Company or serves or served the Company or
any other corporation or other enterprise of any kind in any capacity at the
request of the Company (an "Enterprise"). Without limiting the generality of
the foregoing, the Company shall promptly pay, or reimburse Mountaingate for,
or advance to Mountaingate amounts for the payment of (a) all of the
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<PAGE> 10
Mountaingate's reasonable expenses, including attorneys' fees and court costs,
actually and reasonably incurred in connection with the defense of any action,
suit or proceeding, including any suit seeking recovery under any Company
director's and officer's liability policy, or in connection with any appeal
thereof, to which the either Mountaingate or Employee may be a party by reason
of any action taken or failure to act under or in connection with his service
for the Company or an Enterprise; and (b) all amounts required to be paid in
settlement of or in satisfaction of a judgment in connection with any such
action, suit or proceeding; provided, however, that the Company shall not be
required to indemnify or hold harmless Mountaingate, its officers directors or
shareholders, as well as, the Employee, his heirs or personal representatives
in any manner whatsoever in the event and to the extent there is a final and
nonappealable judgment by a court of competent jurisdiction that the
liability incurred by either Mountaingate or Employee resulted from either of
their gross negligence, fraud or willful malfeasance.
10. Arbitration. If a dispute arises between the parties
respecting the terms of this Agreement or Mountaingate's engagement with the
Company, including, without limitation, any dispute with respect to the
validity of this Agreement or this arbitration clause, such dispute shall be
finally resolved by binding arbitration as follows. Any party may require that
the dispute be submitted to binding arbitration, and in such event the dispute
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. If a matter is submitted to
arbitration, each of the parties shall choose one arbitrator. The arbitrators
selected by the two parties shall choose a third arbitrator who shall act as
chairman and shall be an attorney and a member of the panel of the American
Arbitration Association. Each party shall agree to a speedy hearing upon the
matter in dispute and the judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The place of
arbitration shall be Los Angeles, California. Notwithstanding anything to the
contrary contained herein, no discovery shall be permitted in the arbitration
proceeding.
11. Successors.
(a) This services provided to the Company pursuant to
this Agreement are personal to the Employee and, without the prior written
consent of the Company, shall not be assignable by either Mountaingate or
Employee otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Mountaingate's shareholder or their legal representatives.
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<PAGE> 11
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by an agreement in form and substance
reasonably satisfactory to Mountaingate, expressly to assume and agree to
perform this Agreement.
12. Miscellaneous.
(a) Withholding. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state
or local law and any additional withholding to which Mountaingate has agreed.
(b) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of California, applied without
reference to principles of conflict of laws.
(c) Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(d) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or mailed to the other party by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Mountaingate:
c/o Michael Dempsey, Esq.
1925 Century Park East
Suite 2350
Los Angeles, CA 90067
If to the Company:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(e) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
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<PAGE> 12
(f) Waiver. Waiver by any party hereto of any breach or
default by any other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
(g) Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
referred to herein other than the Stock Purchase Agreement between Mountaingate
and the Company dated as of November 14, 1995 (the "Stock Purchase Agreement"),
and no other agreement, verbal or otherwise, shall be binding as between the
parties unless it is in writing and signed by the party against whom
enforcement is sought. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement other than the Stock Purchase Agreement are superseded by this
Agreement.
(h) Survival. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
(i) Captions and References. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. References in this Agreement to a section number are references to
sections of the Agreement unless otherwise specified.
(j) Consent to Jurisdiction. Each of the parties to this
Agreement hereby submits to the exclusive jurisdiction of the courts of the
State of California and the Federal courts of the United States of America
located in such state solely in respect of the interpretation and enforcement
of the provisions of this Agreement, and hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding for the interpretation
and enforcement of this Agreement, that it is not subject thereto; that such
action, suit or proceeding may not be brought or is not maintainable in said
courts; that this Agreement may not be enforced in or by said courts; that its
property is exempt or immune from execution; that the suit, action or
proceeding is brought in an inconvenient forum; or that the venue of the suit,
action or proceeding is improper. Each of the parties agrees that service of
process in any such action, suit or proceeding shall be deemed in every respect
effective service of process upon it if given in the manner set forth in
Section 13(d).
(k) Legal Fees. Mountaingate shall be entitled to
reimbursement by the Company for all reasonable legal fees and expenses
incurred by it in connection with the initial review of
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<PAGE> 13
this Agreement. Such payments, which shall be made on an ongoing basis after
Mountaingate submits an invoice or other reasonably appropriate documentation
relating thereto to the Company.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: _________________________________
Its: ________________________________
MOUNTAINGATE PRODUCTIONS, LLC.
By:__________________________________
Its:_________________________________
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<PAGE> 14
PERSONAL INDUCEMENT LETTER
In order to induce THE PRODUCERS ENTERTAINMENT GROUP LTD. ("Company")
to enter into the agreement ("the Agreement") dated as of October 1, 1995 with
MOUNTAINGATE PRODUCTIONS LLC, ("Lender"), and in consideration of the execution
and delivery thereof by Company, I hereby represent and warrant as follows:
1. I am familiar with each term and condition of the Agreement. I
hereby consent and agree to the execution and delivery of the Agreement by
Lender and hereby agree to render all of the services provided therein to be
rendered by me. I agree to be bound by and duly perform and observe each and
all of the terms and conditions of the Agreement requiring performance or
compliance on my part.
2. I hereby join in all warranties, representations, agreements and
indemnities made by Lender in the Agreement.
3. I agree that if Lender should be dissolved or should otherwise
cease to exist or, for any reason whatsoever, should fail, be unable, neglect
or refuse to duly perform and observe each and all of the terms and conditions
of the Agreement requiring performance or compliance on Lender's part, at
Company's election, I shall be deemed to be substituted as a direct party to
the Agreement by Lender.
4. I agree that, in the event of a breach or threatened breach of the
Agreement by Lender or by me, Company shall be entitled to seek legal and
equitable relief by way of injunction or otherwise against Lender or against
me, or against both Lender and me, at Company's discretion, without the
necessity of first exhausting any rights or remedies which Company may have
against Lender.
5. All of the foregoing shall be to the same extent and with the same
force and effect as if I had agreed to render services to Company as an
employee.
6. I hereby waive any claim against Company for wages, salary or
other compensation of any kind under the Agreement, and I agree that I will
look solely to Lender for any and all compensation that I may become entitled
to receive for services rendered in connection with the Agreement.
__________________________
IRWIN MEYER
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<PAGE> 15
PERSONAL INDUCEMENT LETTER
In order to induce THE PRODUCERS ENTERTAINMENT GROUP LTD. ("Company")
to enter into the agreement ("the Agreement") dated as of October 1, 1995 with
MOUNTAINGATE PRODUCTIONS LLC, ("Lender"), and in consideration of the execution
and delivery thereof by Company, I hereby represent and warrant as follows:
1. I am familiar with each term and condition of the Agreement. I
hereby consent and agree to the execution and delivery of the Agreement by
Lender and hereby agree to render all of the services provided therein to be
rendered by me. I agree to be bound by and duly perform and observe each and
all of the terms and conditions of the Agreement requiring performance or
compliance on my part.
2. I hereby join in all warranties, representations, agreements and
indemnities made by Lender in the Agreement.
3. I agree that if Lender should be dissolved or should otherwise
cease to exist or, for any reason whatsoever, should fail, be unable, neglect
or refuse to duly perform and observe each and all of the terms and conditions
of the Agreement requiring performance or compliance on Lender's part, at
Company's election, I shall be deemed to be substituted as a direct party to
the Agreement by Lender.
4. I agree that, in the event of a breach or threatened breach of the
Agreement by Lender or by me, Company shall be entitled to seek legal and
equitable relief by way of injunction or otherwise against Lender or against
me, or against both Lender and me, at Company's discretion, without the
necessity of first exhausting any rights or remedies which Company may have
against Lender.
5. All of the foregoing shall be to the same extent and with the same
force and effect as if I had agreed to render services to Company as an
employee.
6. I hereby waive any claim against Company for wages, salary or
other compensation of any kind under the Agreement, and I agree that I will
look solely to Lender for any and all compensation that I may become entitled
to receive for services rendered in connection with the Agreement.
__________________________
ALISON MEYER
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PERSONAL INDUCEMENT LETTER
In order to induce THE PRODUCERS ENTERTAINMENT GROUP LTD. ("Company")
to enter into the agreement ("the Agreement") dated as of October 1, 1995 with
MOUNTAINGATE PRODUCTIONS LLC, ("Lender"), and in consideration of the execution
and delivery thereof by Company, I hereby represent and warrant as follows:
1. I am familiar with each term and condition of the Agreement. I
hereby consent and agree to the execution and delivery of the Agreement by
Lender and hereby agree to render all of the services provided therein to be
rendered by me. I agree to be bound by and duly perform and observe each and
all of the terms and conditions of the Agreement requiring performance or
compliance on my part.
2. I hereby join in all warranties, representations, agreements and
indemnities made by Lender in the Agreement.
3. I agree that if Lender should be dissolved or should otherwise
cease to exist or, for any reason whatsoever, should fail, be unable, neglect
or refuse to duly perform and observe each and all of the terms and conditions
of the Agreement requiring performance or compliance on Lender's part, at
Company's election, I shall be deemed to be substituted as a direct party to
the Agreement by Lender.
4. I agree that, in the event of a breach or threatened breach of the
Agreement by Lender or by me, Company shall be entitled to seek legal and
equitable relief by way of injunction or otherwise against Lender or against
me, or against both Lender and me, at Company's discretion, without the
necessity of first exhausting any rights or remedies which Company may have
against Lender.
5. All of the foregoing shall be to the same extent and with the same
force and effect as if I had agreed to render services to Company as an
employee.
6. I hereby waive any claim against Company for wages, salary or
other compensation of any kind under the Agreement, and I agree that I will
look solely to Lender for any and all compensation that I may become entitled
to receive for services rendered in connection with the Agreement.
__________________________
PATRICIA MEYER
16
<PAGE> 1
Exhibit 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and among THE PRODUCERS ENTERTAINMENT GROUP LTD.
(the "Company"), a Delaware corporation, and IRWIN MEYER (the "Executive"),
dated as of the 1st day of October, 1995.
W I T N E S S E T H
WHEREAS, the Company presently employs the Executive; and
WHEREAS, the Company wishes to continue to employ the Executive for
the period provided in this Agreement, and the Executive is willing to continue
to serve in the employ of the Company on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
1. Employment. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue his employment with
the Company, on the terms and subject to the conditions set forth herein.
2. Term of Employment. The term of the Executive's employment
under this Agreement (the "Employment Period") shall commence as of October 1,
1995, and shall end on June 30, 1998, unless extended or terminated earlier in
accordance with Section 5.
3. Titles and Responsibilities.
(a) Titles. During the Employment Period, the Executive
shall serve as the President and Chief Executive Officer of the Company. The
Executive shall report and be responsible to the Board of Directors of the
Company (the "Board").
(b) Responsibilities. Company hereby engages Executive
to provide his exclusive services as President and Chief Executive Officer and
to supervise the development and production of motion pictures and television
programs for the Company and the exploitation and sale of such motion pictures
and television programs to financiers, distributors, television networks,
syndicator, cable systems, motion picture studios and other buyers or licensees
of such product throughout the world. Pursuant to the terms and conditions
hereof, Executive hereby accepts such engagement. Executive shall render all
services usually and customarily rendered by and required of executives
similarly employed in the entertainment industry. Executive shall report only
to the Board of Directors of the Company.
(c) Place of Performance. During the Employment Period,
the Executive's office shall be located at the principal executive offices of
the Company, which shall be in the Los Angeles metropolitan area, except for
required business travel consistent with the Executive's position. The Company
shall provide the Executive with an office, an executive secretary reasonably
acceptable to him, and other support reasonably appropriate to his duties.
(d) Business Time. During the Employment Period, the
Executive agrees to devote his full business time during normal business hours
to the business and affairs of the Company and to use his best efforts to
perform faithfully, diligently and competently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for (i) time spent serving on corporate, civic or
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<PAGE> 2
charitable boards or committees only if and to the extent not substantially
interfering with the performance of such responsibilities, (ii) periods of
vacation, disability and sick leave to which he is entitled, and (iii)
reasonable activities having a charitable, educational or other public interest
purpose.
4. Compensation.
(a) Base Salary. During the Employment Period, the
Executive shall receive a minimum annual base salary ("Base Salary") equal to
$50,000, payable in accordance with the customary payroll as in effect from
time to time for senior executives of the Company. The Board shall review the
Executive's Base Salary no less frequently than annually commencing no later
than June 1, 1996, for possible increases of such Base Salary in relationship
to the goals and performance of the Company and prevailing competitive
conditions.
(b) Bonus. During the Employment Period, the Executive
shall participate in the Company's bonus plans to the extent that one exists or
unless otherwise granted by the Board of Directors of the Company.
(c) Vacation. During the Employment Period, the
Executive shall be entitled to four (4) weeks paid vacation per year.
(d) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by the Executive in accordance with the
policies and procedures of the Company as applicable to its senior executives.
(e) Other Executive Benefits. Without limiting the
foregoing provisions of this Section 4, during the Employment Period the
Executive shall be entitled to participate in or be covered under all
compensation, bonus, pension, retirement and welfare and fringe benefit plans,
programs and policies of the Company applicable to senior executives of the
Company.
5. Termination.
(a) Death or Disability. The Executive's employment
pursuant to this Agreement shall terminate automatically upon the Executive's
death. The Company may terminate the Executive's employment for Disability by
giving to the Executive notice of its intention in accordance with Section 5(e)
unless Executive returns to the performance of the essential functions of his
employment within 30 days after receipt of such notice. For purposes of this
Agreement, "Disability" means any physical or mental condition that renders the
Executive unable to perform the essential functions of his employment for 90
consecutive days or for a total of 180 days in any period of 360 consecutive
days.
(b) Voluntary Termination After Change in Control.
Notwithstanding anything in this Agreement to the contrary, the Executive may
voluntarily terminate his employment at any time, after a Change in Control,
(i) for any reason upon six months' written notice to the Company, or (ii) if
termination is for Good Reason or on account of the Executive's serious
illness, upon written notice pursuant to Section 5(e) but without any notice
period. In the event of any termination pursuant to this Section 5(b), the
Executive shall have no further obligation to the Company under this Agreement,
except as provided in Section 9.
(c) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means:
Executive's engaging in gross misconduct materially and demonstrably injurious
to the Company; failure to perform the services required hereunder; or
conviction by final judgment of a felony constituting fraud, theft,
embezzlement or homicide.
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(d) Good Reason. The Executive may terminate his
employment for Good Reason. For purposes of this Agreement, "Good Reason"
means (i) a material reduction in the nature or scope of the Executive's
position, title, status, authority, duties, powers or functions on the date of
this Agreement; (ii) the assignment to the Executive of any material duties
which are not commensurate with or at least as prestigious as the Executive's
duties and responsibilities as contemplated by this Agreement; (iii) a material
breach by the Company of any of the provisions of this Agreement; (iv) the
relocation of the Company's principal executive offices to a location outside
the Los Angeles metropolitan area; or (v) the failure by the Company to obtain
an agreement, reasonably satisfactory to the Executive, from any successor to
assume and agree to perform this Agreement, as contemplated by Section 12(b).
After a Change in Control, in addition to items (i) through (v), "Good Reason"
shall include (vi) a determination by the Executive, in his sole discretion,
during the 30-day period commencing 180 days following a Change in Control,
that due to the Change in Control he can no longer effectively perform his
duties.
(e) Notice of Termination. Any termination by the
Company for Cause or Disability or by the Executive for Good Reason shall be
communicated by a written notice (a "Notice of Termination") to the other party
hereto given in accordance with Section 13(d). A "Notice of Termination" shall
set forth in reasonable detail the events giving rise to such termination.
(f) Date of Termination. For purposes of this Agreement,
the term "Date of Termination" means (i) in the case of termination for
Disability, 30 days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of his duties
during such 30-day period); (ii) in the case of termination for Cause, a date
specified in the Notice of Termination (which shall not be less than 30 days
nor more than 60 days from the date such Notice of Termination is given); (iii)
in the case of any other termination for which a Notice of Termination is
required, the date of receipt of such Notice of Termination or, if later, the
date specified therein, as the case may be; and (iv) in all other cases, the
actual date on which the Executive's employment terminates during the
Employment Period.
6. Obligations of the Company Upon Termination.
(a) Death, Disability, Cause and Voluntary Termination.
If at any time before or after a Change in Control the Executive's employment
is terminated by the Company during the Employment Period by reason of the
Executive's death, Disability or for Cause, or is voluntarily terminated by the
Executive (other than for Good Reason), the Company shall have no further
obligation to the Executive or the Executive's legal representatives other than
(i) those obligations earned for Base Salary and payments under any Company
bonus plan that have accrued at the Date of Termination (the "Accrued
Obligations"), (ii) those obligations expressly provided under any of the plans
referred to in Section 4(e) (the "Benefit Rights") and (iii) upon a termination
of the Executive's employment by reason of his death, the payment provided in
Section 6(a)(iii), if applicable, shall be paid to the Executive or the
Executive's estate, as the case may be, in a lump sum in cash within 15 days of
the Date of Termination.
(b) Prior to Change in Control, Termination by the
Company other than for Cause or Disability and Termination by the Executive
for Good Reason.
(i) Lump Sum Payments. If during the Employment Period
and prior to a Change in Control, the Company terminates the Executive's
employment other than for Cause or Disability, or the Executive terminates his
employment for Good Reason, the Company shall provide the Benefit Rights and
shall pay to the Executive in a lump sum in cash within 15 days of the Date of
Termination the sum of the following amounts: (A) the Accrued Obligations; plus
(B) an amount equal to the product of (1) one-twelfth times (2) the sum of the
Executive's Base Salary plus the Executive's average bonus for the three years
ended before the
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Date of Termination, times (3) the number full or partial of months remaining
in the unexpired term of the Employment Period, but in no event less than
twelve months (such period being the "Severance Period").
(ii) Welfare Benefits. The Company shall provide or cause
to be provided to the Executive and his family for the Severance Period
continued life, medical and dental and disability insurance benefits at least
equal to those which the Executive was receiving or entitled to receive
immediately prior to the termination of employment described in Section
6(b)(i).
(iii) Office. For the Severance Period, the Company shall
provide the Executive with an office and an executive secretary reasonably
acceptable to him.
(iv) Discharge of the Company's Obligations. The Company
shall have no further obligations to the Executive in respect of any
termination described in this Section 6(b).
(c) Following Change in Control, Termination by the Company other
than for Cause or Disability and Termination by the Executive for Good Reason.
(i) Lump Sum Payments. If during the Employment Period
and following a Change in Control, the Company terminates the Executive's
employment other than for Cause or Disability, or the Executive terminates his
employment for Good Reason, the Company shall provide the Benefits Rights and
shall pay to the Executive in a lump sum in cash within 15 days of the Date of
Termination the sum of the following amounts: (a) the Accrued Obligations; and
(B) an amount equal to 2.99 times the sum of the amounts described in clause
(2) of Section 6(b)(i)(B).
(ii) Welfare Benefits. The Company shall provide or cause
to be provided to the Executive and his family for a period of 36 months
following such termination continued life, medical and dental and disability
insurance benefits at least equal to those which the Executive was receiving or
entitled to receive immediately prior to the termination of employment
described in Section 6(c)(i).
(iii) Office. For a period of 36 months following such
termination, the Company shall provide the Executive with an office and an
executive secretary reasonably acceptable to him and other support services
reasonably appropriate to an executive of a public corporation.
(iv) Discharge of the Company's Obligations. The Company
shall have no further obligations to the Executive in respect of any
termination described in this Section 6(c).
(d) Change in Control. A Change in Control shall be deemed to
have occurred:
(1) the shareholders of the Company shall approve (i) any merger,
consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of
the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the
foregoing being an "Acquisition Transaction") where (x) the
shareholders of the Company immediately prior to such
Acquisition Transaction would not immediately after such
Acquisition Transaction beneficially own, directly or
indirectly, shares representing in the aggregate more than 65%
of (A) the then outstanding common stock of the corporation
surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as
the case may be (the "Surviving
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Corporation") (or of its ultimate parent corporation, if any)
and (B) the Combined Voting Power (as defined below) of the
then outstanding Voting Securities (as defined below) of the
Surviving Corporation (or of its ultimate parent corporation,
if any) or (y) the Incumbent Directors at the time of the
initial approval of such Acquisition Transaction would not
immediately after such Acquisition Transaction constitute a
majority of the Board of Directors of the Surviving
Corporation (or of its ultimate parent corporation, if any) or
(ii) any plan or proposal for the liquidation or dissolution
of the Company; or
(2) any Person (as defined below) shall become the beneficial
owner (as defined in Rule 13d-3 and 13-d-5 under the Exchange
Act), directly or indirectly, of securities of the Company
representing in the aggregate 20% or more of either (i) the
then outstanding shares of Stock, or (ii) the Combined Voting
Power of all then outstanding Voting Securities of the
Company; provided; however that notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to have
occurred for purposes of this subsection (2) solely as the
result of:
(i) an acquisition of securities by the Company which, by
reducing the number of shares of Stock or other
Voting Securities outstanding, increases (i) the
proportionate number of shares of Stock beneficially
owned by any Person to 20% or more of the shares of
Stock then outstanding or (ii) the proportionate
voting power represented by the Voting Securities
beneficially owned by any Person to 20% or more of
the Combined Voting Power of all then outstanding
Voting Securities; or
(ii) an acquisition of securities directly from the
Company except that this subsection (ii) shall not
apply to:
(A) any conversion of a security that was not
acquired directly from the Company; or
(B) any acquisition of securities if the
Incumbent Directors at the time of the
initial approval of such acquisition would
not immediately after (or otherwise as a
result of) such acquisition constitute a
majority of the Board;
provided, however, that if any Person referred to in
subsections (i) or (ii) of this clause (2) shall
thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities
of the Company (other than pursuant to a stock split,
stock dividend or similar transaction or an
acquisition exempt under such subsection (ii), then a
Change in Control shall be deemed to have occurred
for purposes of this clause (2). For purposes of
this Agreement:
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(A) "Person" shall mean any individual, entity
(including, without limitation, any
corporation, partnership, trust, joint
venture, association or governmental body and
any successor to any such entity) or group
(as defined in Sections 13(d)(3) or 14(d)(2)
of the Exchange Act and the rules and
regulations thereunder); provided, however,
that Person shall not include Executive, the
Company, any of its majority-owned
subsidiaries, any executive benefit plan of
the Company or any of its majority-owned
subsidiaries or any entity organized,
appointed or established by Executive, the
Company or any of its majority-owned
subsidiaries for or pursuant to the terms of
any such plan, or any of their affiliates;
(B) "Voting Securities" shall mean all securities
of a corporation having the right under
ordinary circumstances to vote in an election
of the board of directors of such
corporation; and
(C) "Combined Voting Power" shall mean the
aggregate votes entitled to be cast generally
in the election of directors of a corporation
by holders of then outstanding Voting
Securities of such corporation.
Notwithstanding anything contained in this Paragraph 6, no change in control
shall have occurred as a result of the pending merger between Greenlight
Communications, Inc. and the Company.
7. No Mitigation: No Offset. In no event shall the Executive be
obligated to seek other employment by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. Any amounts
that may be earned by the Executive other than from the Company after the Date
of Termination shall not reduce the Company's obligation to make any payments
hereunder. The amounts payable by the Company hereunder shall not be subject
to any right of set-off that the Company may assert against the Executive.
8. Noncompetition.
(a) Scope. In the case of the Executive's termination of
employment, including due to the expiration of the Employment Period, the
Executive shall not, for one year following the Date of Termination, (a) divert
to any competitor of the Company in the business conducted by the Company (the
"Designated Industry") any active project of the Company; or (b) solicit or
encourage any officer, employee or consultant of the Company to leave their
employ for employment by or with any competitor of the Company in the
Designated Industry. If at any time the provisions of this Section 8 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 9 shall be
considered divisible and shall become and be immediately amended to apply only
to such area, duration
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and scope of activity as shall be determined to be reasonable and enforceable
by the court or other body having jurisdiction over the matter; and the
Executive agrees that this Section 8 as so amended shall be valid and binding
as though any invalid or unenforceable provision had not been included herein.
Nothing in this Section 8 shall prevent or restrict the Executive from engaging
in any business or industry other than the Designated Industry in any capacity.
(b) Irreparable Harm. The Executive agrees that the
remedy at law for any breach of this Section 8 shall be inadequate and that the
Company shall be entitled to injunctive relief.
9. Indemnification. The Company shall indemnify and hold
harmless the Executive, his heirs and personal representatives to the fullest
extent permitted by applicable law, as now or hereafter in effect, with respect
to any acts, omissions or events that occurred while the Executive is or was an
employee of the Company or serves or served the Company or any other
corporation or other enterprise of any kind in any capacity at the request of
the Company (an "Enterprise"). Without limiting the generality of the
foregoing, the Company shall promptly pay, or reimburse the Executive for, or
advance to the Executive amounts for the payment of (a) all of the Executive's
reasonable expenses, including attorneys' fees and court costs, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding, including any suit seeking recovery under any Company director's
and officer's liability policy, or in connection with any appeal thereof, to
which the Executive may be a party by reason of any action taken or failure to
act under or in connection with his service for the Company or an Enterprise;
and (b) all amounts required to be paid in settlement of or in satisfaction of
a judgment in connection with any such action, suit or proceeding; provided,
however, that the Company shall not be required to indemnify or hold harmless
the Executive, his heirs or personal representatives in any manner whatsoever
in the event and to the extent there is a final and nonappealable judgment by a
court of competent jurisdiction that the liability incurred by the Executive
resulted from his gross negligence, fraud or willful malfeasance.
10. Arbitration. If a dispute arises between the parties
respecting the terms of this Agreement or Executive's employment with the
Company, including, without limitation, any dispute with respect to the
validity of this Agreement or this arbitration clause, such dispute shall be
finally resolved by binding arbitration as follows. Any party may require that
the dispute be submitted to binding arbitration, and in such event the dispute
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. If a matter is submitted to
arbitration, each of the parties shall choose one arbitrator. The arbitrators
selected by the two parties shall choose a third arbitrator who shall act as
chairman and shall be an attorney and a member of the panel of the American
Arbitration Association. Each party shall agree to a speedy hearing upon the
matter in dispute and the judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. The place of
arbitration shall be Los Angeles, California. Notwithstanding anything to the
contrary contained herein, no discovery shall be permitted in the arbitration
proceeding.
11. Successors.
(a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by an agreement in form and substance
reasonably satisfactory to the Executive, expressly to assume and agree to
perform this Agreement.
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12. Miscellaneous.
(a) Withholding. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state
or local law and any additional withholding to which the Executive has agreed.
(b) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of California, applied without
reference to principles of conflict of laws.
(c) Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(d) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or mailed to the other party by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Irwin Meyer
12610 Promotory Road
Los Angeles, CA 90049
If to the Company:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(e) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f) Waiver. Waiver by any party hereto of any breach or
default by any other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
(g) Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
referred to herein other than the Stock Purchase Agreement between the
Executive and the Company dated as of the date hereof (the "Stock Purchase
Agreement"), and no other agreement, verbal or otherwise, shall be binding as
between the parties unless it is in writing and signed by the party against
whom enforcement is sought. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement other than the Stock Purchase Agreement are superseded by this
Agreement.
(h) Survival. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
(i) Captions and References. The captions of this
Agreement are not part of the
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provisions hereof and shall have no force or effect. References in this
Agreement to a section number are references to sections of the Agreement
unless otherwise specified.
(j) Consent to Jurisdiction. Each of the parties to this
Agreement hereby submits to the exclusive jurisdiction of the courts of the
State of California and the Federal courts of the United States of America
located in such state solely in respect of the interpretation and enforcement
of the provisions of this Agreement, and hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding for the interpretation
and enforcement of this Agreement, that it is not subject thereto; that such
action, suit or proceeding may not be brought or is not maintainable in said
courts; that this Agreement may not be enforced in or by said courts; that its
property is exempt or immune from execution; that the suit, action or
proceeding is brought in an inconvenient forum; or that the venue of the suit,
action or proceeding is improper. Each of the parties agrees that service of
process in any such action, suit or proceeding shall be deemed in every respect
effective service of process upon it if given in the manner set forth in
Section 13(d).
(k) Legal Fees. The Executive shall be entitled to
reimbursement by the Company for all reasonable legal fees and expenses
incurred by him in connection with the initial review of this Agreement. Such
payments, which shall be made on an ongoing basis after the Executive submits
an invoice or other reasonably appropriate documentation relating thereto to
the Company.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: _________________________________
Its: ________________________________
IRWIN MEYER
_____________________________________
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Exhibit 10.22
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and among THE PRODUCERS ENTERTAINMENT GROUP LTD.
(the "Company"), a Delaware corporation, and CHARLES WEBER (the "Executive"),
dated as of the 1st day of January, 1996.
W I T N E S S E T H
WHEREAS, the Company presently employs the Executive; and
WHEREAS, the Company wishes to continue to employ the Executive for
the period provided in this Agreement, and the Executive is willing to continue
to serve in the employ of the Company on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties agree as follows:
1. Employment. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby agrees to continue his employment with
the Company, on the terms and subject to the conditions set forth herein.
2. Term of Employment. The term of the Executive's employment
under this Agreement (the "Employment Period") shall commence as of January 1,
1996, and shall end on June 30, 1998, unless extended or terminated earlier in
accordance with Section 5.
3. Titles and Responsibilities.
(a) Titles. During the Employment Period, the Executive
shall serve as the Chief Operating Officer of the Company. The Executive shall
report and be responsible to the Chief Executive Officer ("CEO") of the
Company. The Executive was elected as Chairman of the Board of Directors of
the Company until the next election by the shareholders of the Company.
(b) Responsibilities. Company hereby engages Executive
to provide his exclusive services as Chief Operating Officer, to manage the
financial services of the Company, including but not limited to, any public
financing which is undertaken by the Company. Executive's duties shall also
include the supervision of the preparation and filing of all necessary
Securities & Exchange Commission documents, and advising the Company on certain
other financial matters, including investor relations. Pursuant to the terms
and conditions hereof, Executive hereby accepts such engagement. Executive
shall render all services usually and customarily rendered by and required of
executives similarly employed in the entertainment industry. Executive shall
report only to the CEO of the Company.
(c) Place of Performance. During the Employment Period,
the Executive's office shall be located at the principal executive offices of
the Company, which shall be in the Los Angeles metropolitan area, except for
required business travel consistent with the Executive's position. The Company
shall provide the Executive with an office, an executive secretary reasonably
acceptable to him, and other support reasonably appropriate to his duties.
(d) Business Time. During the Employment Period, the
Executive agrees to devote his full business time during normal business hours
to the business and affairs of the Company and to use his best efforts to
perform faithfully, diligently and competently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for (i) time spent serving on corporate, civic or
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charitable boards or committees only if and to the extent not substantially
interfering with the performance of such responsibilities, (ii) periods of
vacation, disability and sick leave to which he is entitled, and (iii)
reasonable activities having a charitable, educational or other public interest
purpose.
4. Compensation.
(a) Base Salary. During the Employment Period, the
Executive shall receive a minimum annual base salary ("Base Salary") equal to
$250,000, payable in accordance with the customary payroll as in effect from
time to time for senior executives of the Company. The Board shall review the
Executive's Base Salary no less frequently than annually commencing no later
than January 1, 1996, for possible increases of such Base Salary in
relationship to the goals and performance of the Company and prevailing
competitive conditions.
(b) Bonus. During the Employment Period, the Executive
shall participate in the Company's bonus plans to the extent that one exists or
unless otherwise granted by the Board of Directors of the Company.
(c) Vacation. During the Employment Period, the
Executive shall be entitled to four (4) weeks paid vacation per year.
(d) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by the Executive in accordance with the
policies and procedures of the Company as applicable to its senior executives.
(e) Automobile Reimbursement. During the
Employment Period, the Executive shall be entitled to receive a monthly
automobile reimbursement in the amount of $1,000, payable monthly on the first
day of each month.
(f) Other Executive Benefits. Without limiting the
foregoing provisions of this Section 4, during the Employment Period the
Executive shall be entitled to participate in or be covered under all
compensation, bonus, pension, retirement and welfare and fringe benefit plans,
programs and policies of the Company applicable to senior executives of the
Company.
5. Termination.
(a) Death or Disability. The Executive's employment
pursuant to this Agreement shall terminate automatically upon the Executive's
death. The Company may terminate the Executive's employment for Disability by
giving to the Executive notice of its intention in accordance with Section 5(e)
unless Executive returns to the performance of the essential functions of his
employment within 30 days after receipt of such notice. For purposes of this
Agreement, "Disability" means any physical or mental condition that renders the
Executive unable to perform the essential functions of his employment for 90
consecutive days or for a total of 180 days in any period of 360 consecutive
days.
(b) Voluntary Termination After Change in Control.
Notwithstanding anything in this Agreement to the contrary, the Executive may
voluntarily terminate his employment at any time, after a Change in Control,
(i) for any reason upon six months' written notice to the Company, or (ii) if
termination is for Good Reason or on account of the Executive's serious
illness, upon written notice pursuant to Section 5(e) but without any notice
period. In the event of any termination pursuant to this Section 5(b), the
Executive shall have no further obligation to the Company under this Agreement,
except as provided in Section 9.
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(c) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means:
Executive's engaging in gross misconduct materially and demonstrably injurious
to the Company; failure to perform the services required hereunder; or
conviction by final judgment of a felony constituting fraud, theft,
embezzlement or homicide.
(d) Good Reason. The Executive may terminate his
employment for Good Reason. For purposes of this Agreement, "Good Reason"
means (i) a material reduction in the nature or scope of the Executive's
position, title, status, authority, duties, powers or functions on the date of
this Agreement; (ii) the assignment to the Executive of any material duties
which are not commensurate with or at least as prestigious as the Executive's
duties and responsibilities as contemplated by this Agreement; (iii) a material
breach by the Company of any of the provisions of this Agreement; (iv) the
relocation of the Company's principal executive offices to a location outside
the Los Angeles metropolitan area; or (v) the failure by the Company to obtain
an agreement, reasonably satisfactory to the Executive, from any successor to
assume and agree to perform this Agreement, as contemplated by Section 12(b).
After a Change in Control, in addition to items (i) through (v), "Good Reason"
shall include (vi) a determination by the Executive, in his sole discretion,
during the 30-day period commencing 180 days following a Change in Control,
that due to the Change in Control he can no longer effectively perform his
duties.
(e) Notice of Termination. Any termination by the
Company for Cause or Disability or by the Executive for Good Reason shall be
communicated by a written notice (a "Notice of Termination") to the other party
hereto given in accordance with Section 13(d). A "Notice of Termination" shall
set forth in reasonable detail the events giving rise to such termination.
(f) Date of Termination. For purposes of this Agreement,
the term "Date of Termination" means (i) in the case of termination for
Disability, 30 days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of his duties
during such 30-day period); (ii) in the case of termination for Cause, a date
specified in the Notice of Termination (which shall not be less than 30 days
nor more than 60 days from the date such Notice of Termination is given); (iii)
in the case of any other termination for which a Notice of Termination is
required, the date of receipt of such Notice of Termination or, if later, the
date specified therein, as the case may be; and (iv) in all other cases, the
actual date on which the Executive's employment terminates during the
Employment Period.
6. Obligations of the Company Upon Termination.
(a) Death, Disability, Cause and Voluntary Termination.
If at any time before or after a Change in Control the Executive's employment
is terminated by the Company during the Employment Period by reason of the
Executive's death, Disability or for Cause, or is voluntarily terminated by the
Executive (other than for Good Reason), the Company shall have no further
obligation to the Executive or the Executive's legal representatives other than
(i) those obligations earned for Base Salary and payments under any Company
bonus plan that have accrued at the Date of Termination (the "Accrued
Obligations"), (ii) those obligations expressly provided under any of the plans
referred to in Section 4(e) (the "Benefit Rights") and (iii) upon a termination
of the Executive's employment by reason of his death, the payment provided in
Section 6(a)(iii), if applicable, shall be paid to the Executive or the
Executive's estate, as the case may be, in a lump sum in cash within 15 days of
the Date of Termination.
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(b) Prior to Change in Control, Termination by the
Company other than for Cause or Disability and Termination by the Executive
for Good Reason.
(i) Lump Sum Payments. If during the Employment Period
and prior to a Change in Control, the Company terminates the Executive's
employment other than for Cause or Disability, or the Executive terminates his
employment for Good Reason, the Company shall provide the Benefit Rights and
shall pay to the Executive in a lump sum in cash within 15 days of the Date of
Termination the sum of the following amounts: (A) the Accrued Obligations; plus
(B) an amount equal to the product of (1) one-twelfth times (2) the sum of the
Executive's Base Salary plus the Executive's average bonus for the three years
ended before the Date of Termination, times (3) the number full or partial of
months remaining in the unexpired term of the Employment Period, but in no
event less than twelve months (such period being the "Severance Period").
(ii) Welfare Benefits. The Company shall provide or cause
to be provided to the Executive and his family for the Severance Period
continued life, medical and dental and disability insurance benefits at least
equal to those which the Executive was receiving or entitled to receive
immediately prior to the termination of employment described in Section
6(b)(i).
(iii) Office. For the Severance Period, the Company shall
provide the Executive with an office and an executive secretary reasonably
acceptable to him.
(iv) Discharge of the Company's Obligations. The Company
shall have no further obligations to the Executive in respect of any
termination described in this Section 6(b).
(c) Following Change in Control, Termination by the Company other
than for Cause or Disability and Termination by the Executive for Good Reason.
(i) Lump Sum Payments. If during the Employment Period
and following a Change in Control, the Company terminates the Executive's
employment other than for Cause or Disability, or the Executive terminates his
employment for Good Reason, the Company shall provide the Benefits Rights and
shall pay to the Executive in a lump sum in cash within 15 days of the Date of
Termination the sum of the following amounts: (a) the Accrued Obligations; and
(B) an amount equal to 2.99 times the sum of the amounts described in clause
(2) of Section 6(b)(i)(B).
(ii) Welfare Benefits. The Company shall provide or cause
to be provided to the Executive and his family for a period of 36 months
following such termination continued life, medical and dental and disability
insurance benefits at least equal to those which the Executive was receiving or
entitled to receive immediately prior to the termination of employment
described in Section 6(c)(i).
(iii) Office. For a period of 36 months following such
termination, the Company shall provide the Executive with an office and an
executive secretary reasonably acceptable to him and other support services
reasonably appropriate to an executive of a public corporation.
(iv) Discharge of the Company's Obligations. The Company
shall have no further obligations to the Executive in respect of any
termination described in this Section 6(c).
4
<PAGE> 5
(d) Change in Control. A Change in Control shall be deemed to
have occurred:
(1) the shareholders of the Company shall approve (i) any merger,
consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of
the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the
foregoing being an "Acquisition Transaction") where (x) the
shareholders of the Company immediately prior to such
Acquisition Transaction would not immediately after such
Acquisition Transaction beneficially own, directly or
indirectly, shares representing in the aggregate more than 65%
of (A) the then outstanding common stock of the corporation
surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as
the case may be (the "Surviving Corporation") (or of its
ultimate parent corporation, if any) and (B) the Combined
Voting Power (as defined below) of the then outstanding Voting
Securities (as defined below) of the Surviving Corporation (or
of its ultimate parent corporation, if any) or (y) the
Incumbent Directors at the time of the initial approval of
such Acquisition Transaction would not immediately after such
Acquisition Transaction constitute a majority of the Board of
Directors of the Surviving Corporation (or of its ultimate
parent corporation, if any) or (ii) any plan or proposal for
the liquidation or dissolution of the Company; or
(2) any Person (as defined below) shall become the beneficial
owner (as defined in Rule 13d-3 and 13-d-5 under the Exchange
Act), directly or indirectly, of securities of the Company
representing in the aggregate 20% or more of either (i) the
then outstanding shares of Stock, or (ii) the Combined Voting
Power of all then outstanding Voting Securities of the
Company; provided; however that notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to have
occurred for purposes of this subsection (2) solely as the
result of:
(i) an acquisition of securities by the Company which, by
reducing the number of shares of Stock or other
Voting Securities outstanding, increases (i) the
proportionate number of shares of Stock beneficially
owned by any Person to 20% or more of the shares of
Stock then outstanding or (ii) the proportionate
voting power represented by the Voting Securities
beneficially owned by any Person to 20% or more of
the Combined Voting Power of all then outstanding
Voting Securities; or
(ii) an acquisition of securities directly from the
Company except that this subsection (ii) shall not
apply to:
(A) any conversion of a security that was not
acquired directly from the Company; or
(B) any acquisition of securities if the
Incumbent Directors at the time of the
initial approval of such acquisition would
5
<PAGE> 6
not immediately after (or otherwise as a
result of) such acquisition constitute a
majority of the Board;
provided, however, that if any Person referred to in
subsections (i) or (ii) of this clause (2) shall
thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities
of the Company (other than pursuant to a stock split,
stock dividend or similar transaction or an
acquisition exempt under such subsection (ii), then a
Change in Control shall be deemed to have occurred
for purposes of this clause (2).
For purposes of this Agreement:
(A) "Person" shall mean any individual, entity
(including, without limitation, any
corporation, partnership, trust, joint
venture, association or governmental body and
any successor to any such entity) or group
(as defined in Sections 13(d)(3) or 14(d)(2)
of the Exchange Act and the rules and
regulations thereunder); provided, however,
that Person shall not include Executive, the
Company, any of its majority-owned
subsidiaries, any executive benefit plan of
the Company or any of its majority-owned
subsidiaries or any entity organized,
appointed or established by Executive, the
Company or any of its majority-owned
subsidiaries for or pursuant to the terms of
any such plan, or any of their affiliates;
(B) "Voting Securities" shall mean all securities
of a corporation having the right under
ordinary circumstances to vote in an election
of the board of directors of such
corporation; and
(C) "Combined Voting Power" shall mean the
aggregate votes entitled to be cast generally
in the election of directors of a corporation
by holders of then outstanding Voting
Securities of such corporation.
Notwithstanding anything contained in this Paragraph 6, no change in control
shall have occurred as a result of the pending merger between Greenlight
Communications, Inc. and the Company.
6
<PAGE> 7
7. No Mitigation: No Offset. In no event shall the Executive be
obligated to seek other employment by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. Any amounts
that may be earned by the Executive other than from the Company after the Date
of Termination shall not reduce the Company's obligation to make any payments
hereunder. The amounts payable by the Company hereunder shall not be subject
to any right of set-off that the Company may assert against the Executive.
8. Noncompetition.
(a) Scope. In the case of the Executive's termination of
employment, including due to the expiration of the Employment Period, the
Executive shall not, for one year following the Date of Termination, (a) divert
to any competitor of the Company in the business conducted by the Company (the
"Designated Industry") any active project of the Company; or (b) solicit or
encourage any officer, employee or consultant of the Company to leave their
employ for employment by or with any competitor of the Company in the
Designated Industry. If at any time the provisions of this Section 8 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 9 shall be
considered divisible and shall become and be immediately amended to apply only
to such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter; and the Executive agrees that this Section 8 as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein. Nothing in this Section 8 shall prevent or restrict the
Executive from engaging in any business or industry other than the Designated
Industry in any capacity.
(b) Irreparable Harm. The Executive agrees that the
remedy at law for any breach of this Section 8 shall be inadequate and that the
Company shall be entitled to injunctive relief.
9. Indemnification. The Company shall indemnify and hold
harmless the Executive, his heirs and personal representatives to the fullest
extent permitted by applicable law, as now or hereafter in effect, with respect
to any acts, omissions or events that occurred while the Executive is or was an
employee of the Company or serves or served the Company or any other
corporation or other enterprise of any kind in any capacity at the request of
the Company (an "Enterprise"). Without limiting the generality of the
foregoing, the Company shall promptly pay, or reimburse the Executive for, or
advance to the Executive amounts for the payment of (a) all of the Executive's
reasonable expenses, including attorneys' fees and court costs, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding, including any suit seeking recovery under any Company director's
and officer's liability policy, or in connection with any appeal thereof, to
which the Executive may be a party by reason of any action taken or failure to
act under or in connection with his service for the Company or an Enterprise;
and (b) all amounts required to be paid in settlement of or in satisfaction of
a judgment in connection with any such action, suit or proceeding; provided,
however, that the Company shall not be required to indemnify or hold harmless
the Executive, his heirs or personal representatives in any manner whatsoever
in the event and to the extent there is a final and nonappealable judgment by a
court of competent jurisdiction that the liability incurred by the Executive
resulted from his gross negligence, fraud or willful malfeasance.
10. Arbitration. If a dispute arises between the parties
respecting the terms of this Agreement or Executive's employment with the
Company, including, without limitation, any dispute with respect to the
validity of this Agreement or this arbitration clause, such dispute shall be
finally resolved by binding arbitration as follows. Any party may require that
the dispute be submitted to binding arbitration, and in such event the dispute
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. If a matter is submitted to
arbitration, each of the parties shall choose one arbitrator. The arbitrators
selected by the two parties shall choose a third arbitrator who shall act as
chairman and shall be
7
<PAGE> 8
an attorney and a member of the panel of the American Arbitration Association.
Each party shall agree to a speedy hearing upon the matter in dispute and the
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The place of arbitration shall be Los Angeles,
California. Notwithstanding anything to the contrary contained herein, no
discovery shall be permitted in the arbitration proceeding.
11. Successors.
(a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by an agreement in form and substance
reasonably satisfactory to the Executive, expressly to assume and agree to
perform this Agreement.
12. Weber Communications, Inc. The Company and Weber
Communications, Inc. ("WCI"), a company controlled by Employee agree to enter
into a good faith negotiation with the respect to the Company acquiring,
controlling, merging or consolidating its business with WCI. Notwithstanding,
nothing contained herein shall be affected in the event that the parties are
unable conclude such negotiation.
13. Miscellaneous.
(a) Withholding. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state
or local law and any additional withholding to which the Executive has agreed.
(b) Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of California, applied without
reference to principles of conflict of laws.
(c) Amendments. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(d) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or mailed to the other party by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Mr. Charles Weber
120 S. Carmelina Ave
Los Angeles, CA 90049
If to the Company:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
8
<PAGE> 9
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(e) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(f) Waiver. Waiver by any party hereto of any breach or
default by any other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
(g) Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
referred to herein other than the Stock Purchase Agreement between the
Executive and the Company dated as of the date hereof (the "Stock Purchase
Agreement"), and no other agreement, verbal or otherwise, shall be binding as
between the parties unless it is in writing and signed by the party against
whom enforcement is sought. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement other than the Stock Purchase Agreement are superseded by this
Agreement.
(h) Survival. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
(i) Captions and References. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. References in this Agreement to a section number are references to
sections of the Agreement unless otherwise specified.
(j) Consent to Jurisdiction. Each of the parties to this
Agreement hereby submits to the exclusive jurisdiction of the courts of the
State of California and the Federal courts of the United States of America
located in such state solely in respect of the interpretation and enforcement
of the provisions of this Agreement, and hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding for the interpretation
and enforcement of this Agreement, that it is not subject thereto; that such
action, suit or proceeding may not be brought or is not maintainable in said
courts; that this Agreement may not be enforced in or by said courts; that its
property is exempt or immune from execution; that the suit, action or
proceeding is brought in an inconvenient forum; or that the venue of the suit,
action or proceeding is improper. Each of the parties agrees that service of
process in any such action, suit or proceeding shall be deemed in every respect
effective service of process upon it if given in the manner set forth in
Section 13(d).
(k) Legal Fees. The Executive shall be entitled to
reimbursement by the Company for all reasonable legal fees and expenses
incurred by him in connection with the initial review of this Agreement. Such
payments, which shall be made on an ongoing basis after the Executive submits
an invoice or other reasonably appropriate documentation relating thereto to
the Company.
9
<PAGE> 10
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: _________________________________
Its: ________________________________
CHARLES WEBER
_____________________________________
10
<PAGE> 1
Exhibit 10.23
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), by and
between (I) THE PRODUCERS ENTERTAINMENT GROUP LTD. (the "Company"), a Delaware
corporation, and (ii) MOUNTAINGATE PRODUCTIONS LLC (the "Purchaser"), dated as
of the __day of February, 1996.
WITNESSETH
WHEREAS, the Company desires to provide to the Purchaser the
opportunity to purchase shares of the Company's common stock, par value $.001
per share (the "Common Stock"), for good and valuable consideration as provided
herein; and
WHEREAS, the Purchaser desires to purchase Cretan shares of
Common Stock from the Company;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties agree as follows:
1. Sale And Purchase Of Common Stock. Subject to the
terms and conditions of this Agreement and the Note (as defined below), (i) the
Company hereby sells to the Purchaser two million (2,000,000) shares of Common
Stock (the "Shares") at a purchase price of $0.50 per Share, for a total
purchase price of $1,000,000.00 (the "Purchase Price"), and (ii) the Purchaser
hereby purchases such Shares from the Company for such Purchase Price. The
Purchaser shall pay the Purchase Price by issuing to the Company, concurrently
with the execution and delivery of this Agreement, a promissory note
substantially in the form attached as Exhibit A hereto (the "Note"), and the
Purchaser's sole liability to make payments to the Company under this Agreement
shall be satisfied by its liability under the Note. The Shares are duly
authorized, validly issued, fully paid and nonassessable, but the Shares are
subject to the terms and conditions of this Agreement. The Company issues
concurrently herewith a duly executed certificate evidencing the Shares
purchased hereunder, with the legends provided herein, in exchange for the
delivery by the Purchaser of the duly executed Note.
2. Pledge.
(a) As security for the fulfillment of its
obligations under the Note, the Purchaser hereby pledges, hypothecates,
assigns, transfers, sets over, delivers and grants to the Company a security
interest in (i) the Shares, (ii) all dividends, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Shares, (iii) subject to the
provisions of Section 4 hereof, all rights and privileges of the Purchaser with
respect to the Shares and the other property referred to in clause (ii) and
(iv) subject to the provisions of Section 4 hereof, all proceeds of any of the
foregoing and any property of any character whatsoever into which any of the
foregoing may be converted (all items referred to in clauses (i) through (iv)
above being hereinafter collectively called the "Pledged Collateral")
<PAGE> 2
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Company, its successors and assigns, forever,
subject, however, to the terms, covenants and conditions hereinafter set forth;
and provided that such Pledged Collateral or a proportional amount thereof
(based on the ratio of the payments of principal on the Note to the total
Purchase Price) shall be released by the Company and returned to the Purchaser,
without representation or recourse, as the Purchaser shall make the payments
required to be made under the Note.
(b) The Purchaser hereby delivers, and agrees
promptly to deliver, to the Company any and all Pledged Collateral, and any and
all certificates or other instruments or documents representing any of the
Pledged Collateral, which shall be in or come into the Purchaser's possession
during the term of this Agreement.
(c) If the Purchaser shall not make any payment
required to be made on the Note at the time such payment is due, the Company
may sell, assign, transfer, endorse and deliver all, or from time to time, any
part of the Pledged Collateral to any third party or to the Company at a price
per Share equal to $0.50 or, if less than $0.50 per share, at the fair market
value of a Share as determined in good faith by the Company. The proceeds of
the sale of all or any part of the Pledged Collateral shall be applied by the
Company first to accrued interest then to the then-outstanding principal amount
of the Note. Any remaining amount from such sale shall be paid over to the
Purchaser.
3. Purchaser's Representations: Sources of Funds
(a) The Purchaser represents to the Company that
it is purchasing the Shares being purchased hereunder for its own account and
not as nominee or agent for any other person and not with a view to, or for
offer or sale in connection with, any distribution thereof (within the meaning
of the Securities Act of 1933 (the "Securities Act") which would be in
violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to its rights at all times to sell or
otherwise dispose of all or any part of said Shares under an effective
registration statement under the Securities Act, or under an exemption from
such registration available under the Securities Act and subject, nevertheless,
to the disposition of its property being at all times within its control
(subject to the restrictions of this Agreement.).
(b) The Purchaser further represents that it is
knowledgeable, sophisticated and experienced in business and financial matter;
that it fully understands the limitations on transfer described herein; that it
is able to bear the economic risks of its investment in the Shares and is
presently able to afford the complete loss of such investment; and that it has
been afforded access to information about the Company, the Company's financial
condition, results of operations, business, property, management and prospects
sufficient to enable it to evaluate its investment in the Shares.
(c) The Purchaser further represents that it is
an "accredited investor" as such term is defined in Rule 501 (a) of Regulation
D under the Securities Act.
<PAGE> 3
(d) The Purchaser will not Transfer the Shares in
violation of any federal or state securities law. For purposes of this
Agreement, "Transfer" shall mean any transfer, sale, assignment, pledge or
other disposition. If the Purchaser desires to sell or otherwise dispose of
all or any part of the Shares (other than a Transfer to the Company or a
Transfer pursuant to an effective registration statement under the Securities
Act and pursuant to registration or qualification under any applicable state
securities laws), if requested by the Company, it will deliver to the Company
an opinion of counsel, reasonably satisfactory in form and substance to the
Company, that an exemption from registration is available. The stock
certificate for the Shares shall bear an appropriate legend reflecting such
restriction.
4. Restrictions Applicable to the Shares.
(a) Unless vested earlier upon the happening of
certain events, as provided in section 4(c) hereof, the Purchaser's rights to
retain the Shares free of any rights of the Company with respect to the Shares
(other than the Company's rights to such portion of the Shares that is pledged
as security for the Note) shall vest in accordance with the following schedule
if the Purchaser is engaged to render services to the Company pursuant to the
Production Agreement between the Purchaser and the Company (the "Production
Agreement") as of such date:
<TABLE>
<CAPTION>
Cumulative Percentage of Shares Date of Vesting
------------------------------- ---------------
<S> <C>
50% April 1, 1996
75% June 30, 1996
100% June 30, 1997
</TABLE>
Until the Shares have vested, the Purchaser may not Transfer the Shares and the
stock certificate representing the Shares shall bear an appropriate legend to
that effect.
(b) All cash dividends payable with respect to
the Shares will be paid directly to the Purchaser at the same time that
dividends are paid with respect to all other shares of Common Stock. The
Purchaser will have the right to vote the Shares.
(c) The Shares will be subject to the following
provisions upon a Change in Control of the Company or upon any other
termination of the Purchaser's engagement by the Company under the Production
Agreement which may occur before the Shares have vested in accordance with
Section 4(a).
(i) Change in Control. Upon a Change in
Control during the Purchaser's engagement by
the Company, all of the Shares which have not
vested in, and shall not be subject to
forfeiture by, the Purchaser. For purposes
of this Agreement, a Change in Control shall
have the meaning provided in the Production
Agreement.
(ii) Death or Disability. If the
purchaser's engagement by the Company is
terminated by reason of the death or
Disability of Irwin Meyer, all of the Shares
which have not
<PAGE> 4
previously vested in accordance with Section
4(a) or Section 4(c)(i) shall immediately
vest in, and shall not be subject to
forfeiture by, the Purchaser. For purposes
of this Agreement, "Disability" shall have
the meaning provided in the Production
Agreement.
(iii) Termination by the Company without
Cause or by the Purchaser for Good Reason or
upon the Retirement of Irwin Meyer. If the
Company terminates the Purchaser's engagement
without Cause or if the Purchaser terminates
its engagement for Good Reason or upon
Retirement of Irwin Meyer, all of the Shares
which have not vested in accordance with
section 4(a) or Section 4(c)(i) shall
immediately vest in, and shall not be subject
to forfeiture by, the Purchaser. For
purposes of this Agreement, "Cause" and "Good
Reason" shall have the meanings provided in
the Production Agreement and "Retirement"
shall mean retirement in accordance with any
retirement plan or policy of the Company.
(iv) Other Termination of Employment. If
the Purchaser's engagement terminates before
a Change in Control shall have occurred for
any reason other than death, disability,
termination by the Company other than for
Cause or termination by the Purchaser for
Good Reason or upon the Retirement of Irwin
Meyer, then the Purchaser shall forfeit to
the Company the Shares which have not
previously vested in accordance with Section
4(a), and the Purchaser's obligation under
the Note with respect to the payment of the
Purchase Price (at $0.50 per share plus
interest accrued thereon in accordance with
the terms of the Note) for the number of
Shares so forfeited shall be forgiven by the
Company and the Purchaser shall have no
further liability under the Note with respect
to the amount so forgiven.
5. Successors.
Without the prior written consent of the Company, this
Agreement shall not be assignable by the Purchaser. This Agreement shall inure
to the benefit of and be enforceable by the Purchaser, the Company and their
successors.
6. Miscellaneous.
(a) Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of New York, applied
without reference to principles of conflict of laws.
<PAGE> 5
(b) Amendments. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(c) Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered or mailed to the other party by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Purchaser:
Moutaingate Productions LLC
12610 Promontory Road
Los Angeles, CA 90049
If to the Company:
The Producers Entertainment Group Ltd.
9150 Wilshire Blvd., Suite 205
Los Angeles, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(d) Severability. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of the Agreement.
(e) Waiver. Waiver by any party hereto of any
breach or default by any other party of any of the terms of this Agreement
shall not operate as a waiver of any other breach or default, whether similar
to or different from the breach or default waived.
(f) Entire Agreement. This Agreement constitutes
the entire agreement between the parties hereto with respect to the matters
referred to herein other than the Production Agreement, and no other agreement,
verbal or otherwise, shall be binding as between the parties unless it is in
writing and signed by the party against whom enforcement is sought. All prior
and contemporaneous agreements and understandings between the parties with
respect to the subject matter of this Agreement other than the Production
Agreement are superseded by this Agreement.
(g) Survival. The respective rights and obligations
of the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
(h) Captions and References. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. References in this
<PAGE> 6
Agreement to a section number are references to sections of the Agreement
unless otherwise specified.
IN WITNESS WHEREOF, the Purchaser of the Company have
each caused this Agreement to be duly executed in its name on its behalf all as
of the day and year first above written.
THE PRODUCERS ENTERTAINMENT
GROUP LTD.
By:______________________________
Its:_____________________________
MOUNTAINGATE PRODUCTIONS
LLC
By:______________________________
Its:_____________________________
<PAGE> 7
EXHIBIT A
PROMISSORY NOTE
$1,000,000.00
Los Angeles, California
February __,1996
FOR VALUE RECEIVED, the undersigned, MOUNTAINGATE PRODUCTIONS
LLC (the "Promissor"), hereby promises to pay to the order of THE PRODUCERS
ENTERTAINMENT GROUP LTD., a Delaware corporation or its successors (the
"Holder"), the principal sum of ONE MILLION DOLLARS ($1,000,000.00) or such
lesser amount as may then be the unpaid principal balance hereof (the
"Principal Amount"), together with interest thereon, payable by certified or
official bank check or wire transfer of immediately available funds to an
account designated by the Holder in accordance with the following schedule:
twelve and one-half percent (12-1/2%) of the Principal Amount plus all accrued
but unpaid interest thereon will be payable on April 1, 1997, twelve and
one-half percent (12-1/2%) of the Principal Amount (as calculated without
regard to any prior payments thereof) plus all accrued but unpaid interest
thereon will be payable on October 1, 1998, and the balance of the Principal
Amount plus all accrued but unpaid interest thereon will be payable on October
1, 2000.
The Promissor promises to pay interest on the Principal Amount
of this promissory note (this "Note") from the date hereof until such Principal
Amount is paid in full at the fixed rate of 7% per annum compounded
semiannually, such interest payable in accordance with the foregoing schedule;
provided, however, that any Principal Amount hereof not paid when due and, to
the fullest extent permitted by applicable law, any overdue interest shall bear
interest at a rate per annum equal to 10% (after, as well as before, any
judgment), payable on demand. Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
This Note is issued in connection with the transaction
contemplated by the Stock Purchase Agreement, dated as of the date hereof,
between the Promissor and the Holder.
This Note shall be binding upon the Promissor and its
successors and shall inure to the benefit of the Promissor and its successors;
provided, however, that the Promissor shall be liable to the Holder only with
respect to twenty-five percent (25%) of the portion of the Principal Amount
which shall remain unpaid at any time, plus accrued but unpaid interest
thereon. The Promissor shall not have any liability to the Company with
respect to the payment of the remaining portion of the Principal Amount or
accrued but unpaid interest thereon.
<PAGE> 8
The Promissor hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
The provisions of this Note may be amended, modified, changed
or terminated only by an agreement in writing signed by the Promissor and the
Holder.
If at any time the indebtedness evidenced by this Note is
collected through legal proceedings or this Note is placed in the hands of
attorneys for collection, the Promissor hereby agrees to pay all costs and
expenses (including attorneys' fees) incurred by the Holder in collecting or
attempting to collect such indebtedness.
If any payment on this Note becomes due and payable on a day
other than a Business Day (as hereinafter defined), the maturity thereof shall
be extended to the immediately following Business Day and interest shall
continue to accrue during such extension. "Business Day" means any day other
than a Saturday or Sunday or any other day on which commercial banks in New
York, New York are authorized or obligated by law to close.
This Note is non-transferable except to a person or entity
that succeeds (by transfer of assets, other reorganization or otherwise) to all
or substantially all of the business of Holder.
THE PROMISSOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OR ANY DISPUTE ARISING UNDER OR
RELATING TO THIS NOTE AND AGREES THAT ANY SUCH DISPUTES SHALL BE TRIED BEFORE A
JUDGE SITTING WITHOUT A JURY.
THIS NOTE IS GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
MOUNTAINGATE PRODUCTIONS LLC
By:______________________________
Its:______________________________
<PAGE> 1
Exhibit 10.24
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), by and
between THE PRODUCERS ENTERTAINMENT GROUP LTD. (the "Company"), a Delaware
corporation, and Charles Weber (the "Executive"), dated as of the 14th day of
November, 1995.
W I T N E S S E T H
WHEREAS, the Company employs the Executive and desires to
provide to the Executive the opportunity to purchase shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), in consideration
of the past services rendered by the Executive, and other good and valuable
consideration as provided herein; and
WHEREAS, the Executive desires to purchase certain shares of
Common Stock from the Company;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties agree as follows:
1. Sale And Purchase Of Common Stock. Subject to the
terms and conditions of this Agreement and the Note (as defined below), (i) the
Company hereby sells to the Executive One Hundred Thousand (100,000) shares of
Common Stock (the "Purchase Price"), (ii) and the Executive hereby purchases
such Shares from the Company for such Purchase Price. The Executive shall pay
the Purchase Price by issuing to the Company, concurrently with the execution
and delivery of this Agreement, a promissory note substantially in the form
attached as Exhibit A hereto (the "Note"), and the Executive's sole liability
to make payments to the Company under this Agreement shall be his liability
under the Note. The Shares are duly authorized, validly issued, fully paid and
nonassessable, but the Shares are subject to the terms and conditions of this
Agreement. The Company issues concurrently herewith a duly executed
certificate evidencing the Shares purchased hereunder, with the legends
provided for herein, in exchange for the delivery by the Executive of the duly
executed Note.
2. Pledge.
(a) As security for the fulfillment of his
obligations under the Note, the Executive hereby pledges, hypothecates,
assigns, transfers, sets over, delivers and grants to the Company a security
interest in (i) the Shares, (ii) all dividends, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Shares, (iii) subject to the
provisions of Section 4 hereof, all rights and privileges of the Executive with
respect to the Shares and the other property referred to in clause (ii), and
(iv) subject to the provisions of Section 4 hereof, all proceeds of any of the
foregoing and any property of any character whatsoever into which any of the
foregoing may be converted (all items referred to in clauses (i) through (iv)
above being hereinafter collectively called the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, title, interests, powers, privileges and preferences pertaining or
incidental thereto, unto the Company, its successors and assigns, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth;
and provided that such Pledged Collateral or a proportional amount thereof
(based on the ratio of the payments of principal on the Note to the total
Purchase Price) shall be released by the Company and returned to the Executive,
without representation or recourse, as the Executive shall make the payments
required to be made under the Note.
(b) The Executive hereby delivers, and agrees
promptly to deliver, to the Company any and all Pledged Collateral, and any and
all certificates or other instruments or documents
<PAGE> 2
representing any of the Pledged Collateral, which shall be in or come into the
Executive's possession during the term of this Agreement.
(c) If the Executive shall not make any payment
required to be made on the Note at the time such payment is due, the Company
may sell, assign, transfer, endorse and deliver all, from time to time, any
part of the Pledged Collateral to any third party or to the Company at a price
per Share equal to $50,000.00 or, if less than $0.50 per share, at the fair
market value of a Share as determined in good faith by the Company. The
proceeds of the sale of all or any part of the Pledged Collateral shall be
applied by the Company first to accrued interest then to the then-outstanding
principal amount of the Note. Any remaining amount from such sale shall be
paid over to the Executive.
3. Executive's Representations; Sources of Funds.
(a) The Executive represents to the Company that
he is purchasing the Shares being purchased hereunder for his own account and
not as nominee or agent for any other person and not with a view to, or for
offer or sale in connection with, any distribution thereof (within the meaning
of the Securities Act of 1933 (the "Securities Act") which would be in
violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to his rights at all times to sell or
otherwise dispose of all or any part of said Shares under an effective
registration statement under the Securities Act, or under an exemption from
such registration available under the Securities Act and subject, nevertheless,
to the disposition of his property being at all times within his control
(subject to the restrictions of this Agreement).
(b) The Executive further represents that he is
knowledgeable, sophisticated and experienced in business and financial matters;
that he fully understands the limitations on transfer described herein; that he
is able to bear the economic risks of his investment in the Shares and is
presently able to afford the complete loss of such investment; and that he has
been afforded access to information about the Company, the Company's financial
condition, results of operations, business, property, management and prospects
sufficient to enable him to evaluate his investment in the Shares.
(c) The Executive further represents that he is
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
under the Securities Act.
(d) The Purchaser will not Transfer the Shares in
violation of any federal or state securities law. For purposes of this
Agreement, "Transfer" shall mean any transfer, sale, assignment, pledge or
other disposition. If the Purchaser desires to sell or otherwise dispose of
all or any part of the Shares (other than a Transfer to the Company or a
Transfer pursuant to an effective registration statement under the Securities
Act and pursuant to registration or qualification under any applicable state
securities laws), if requested by the Company, it will deliver to the Company
an opinion of counsel, reasonably satisfactory in form and substance to the
Company, that an exemption from registration is available. The stock
certificate for the Shares shall bear an appropriate legend reflecting such
restriction.
4. Restrictions Applicable to the Shares.
(a) Unless vested earlier upon the happening of
certain events, as provided in section 4(c) hereof, the Purchaser's rights to
retain the Shares free of any rights of the Company with respect to the Shares
(other than the Company's rights to such portion of the Shares that is pledged
as security for the Note) shall vest immediately.
(b) All cash dividends payable with respect to
the Shares will be paid directly to the Purchaser at the same time that
dividends are paid with respect to all other shares of Common Stock. The
Purchaser will have the right to vote the Shares.
<PAGE> 3
(c) The Shares will be subject to the following
provisions upon a Change in Control of the Company or upon any other
termination of the Purchaser's engagement by the Company under the Production
Agreement which may occur before the Shares have vested in accordance with
Section 4(a).
(i) Change in Control. Upon a Change in Control during
the Purchaser's engagement by the company, all of the
Shares which have not vested in accordance with
Section 4(a) shall immediately vest in, and shall not
be subject to forfeiture by, the Purchaser. For
purposes of this Agreement, a Change in Control shall
have the meaning provided in the Production
Agreement.
(ii) Death or Disability. If the Executive's employment
by the Company is terminated by reason of his death
or Disability, all of the Shares which have not
previously vested in accordance with Section 4(a) or
Section 4(c)(i) shall immediately vest in, and shall
not be subject to forfeiture by, the Executive. For
purposes of this Agreement, "Disability" shall have
the meaning provided in the Employment Agreement.
(iii) Termination by the Company without Cause or by the
Executive for Good Reason or upon Retirement. If the
Company terminates the Executive's employment without
Cause or if the Executive terminates his employment
for Good Reason or upon Retirement, all of the Shares
which have not vested in accordance with Section 4(a)
or Section 4(c)(i) shall immediately vest in, and
shall not be subject to forfeiture by, the Executive.
For purposes of this Agreement, "Cause" and "Good
Reason" shall have the meanings provided in the
Employment Agreement and "Retirement" shall mean
retirement in accordance with any retirement plan or
policy of the Company.
(iv) Other Termination of Employment. If the Executive's
employment terminates before a Change in Control
shall have occurred for any reason other than death,
Disability, termination by the Company other than for
Cause or termination by the Executive for Good Reason
or upon Retirement, then the Executive shall forfeit
to the Company the Shares which have not previously
vested in accordance with Section 4(a), and the
Executive's obligation under the Note with respect to
the payment of the Purchase Price (at $0.50 per share
plus interest accrued thereon in accordance with the
terms of the Note) for the number of Shares so
forfeited shall be forgiven by the Company and the
Executive shall have no further liability under the
Note with respect to the amount so forgiven.
5. Successors.
This Agreement is personal to the Executive and, without the
prior written consent of the
<PAGE> 4
Company, shall not be assignable by the Executive otherwise than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representative. This Agreement
shall inure to the benefit of the Company and its successors.
6. Miscellaneous.
(a) Applicable Law. This Agreement shall be
governed by and construed in accordance with laws of New York, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(c) Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered or mailed to the other party by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Charles Weber
120 S. Carmelina Avenue
Los Angeles, CA 90049
IF TO THE COMPANY:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(d) Severability. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.
(e) Waiver. Waiver by any party hereto of any
breach or default by any other party of any of the terms of this Agreement
shall not operate as a waiver of any other breach or default, whether similar
to or different from the breach or default waived.
(f) Entire Agreement. This Agreement constitutes
the entire agreement between the parties hereto with respect to the matters
referred to herein other than the Employment Agreement, and no other agreement,
verbal or otherwise, shall be binding as between the parties unless it is in
writing and signed by the party against whom enforcement is sought. All prior
and contemporaneous agreements and understandings between the parties with
respect to the subject matter of this Agreement other than the Employment
Agreement are superseded by this Agreement.
(g) Survival. The respective rights and
obligations of the parties hereunder shall survive any termination of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations.
(h) Captions and References. The captions of
the Agreement are not part of the provisions hereof and shall have no force or
effect. References in this Agreement to a section number are
<PAGE> 5
references to sections of the Agreement unless otherwise specified.
IN WITNESS WHEREOF, the Executive has hereunto set
his hand and the Company has caused this Agreement to be duly executed in its
name on its behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT
GROUP LTD.
By: ____________________________
Its: ___________________________
EXECUTIVE
CHARLES WEBER
________________________________
<PAGE> 6
EXHIBIT A
PROMISSORY NOTE
$50,000.00 Los Angeles, California
November 14, 1995
FOR VALUE RECEIVED, the undersigned, CHARLES WEBER (the
"Promisor"), hereby promises to pay to the order of THE PRODUCERS ENTERTAINMENT
GROUP LTD., a Delaware corporation or its successors (the "Holder"), the
principal sum of FIFTY THOUSAND DOLLARS ($50,000.00) or such lesser amount as
may then be the unpaid principal balance hereof (the "Principal Amount"),
together with interest thereon, payable by certified or official bank check or
wire transfer of immediately available funds to an account designated by the
Holder in accordance with the following schedule: twelve and one-half percent
(12-1/2%) of the Principal Amount plus all accrued but unpaid interest thereon
will be payable on April 1, 1997, twelve and one-half percent (12-1/2%) of the
Principal Amount (as calculated without regard to any prior payments thereof)
plus all accrued but unpaid interest thereon will be payable on October 1,
1998, and the balance of the Principal Amount plus all accrued but unpaid
interest thereon will be payable on October 1, 2000.
The Promisor promises to pay interest on the Principal Amount
of this promissory note (this "Note") from the date hereof until such Principal
Amount is paid in full at the fixed rate of 7% per annum compounded
semiannually, such interest payable in accordance with the foregoing schedule;
provided, however, that any Principal Amount hereof not paid when due and, to
the fullest extent permitted by applicable law, any overdue interest shall bear
interest at a rate per annum equal to 10% (after, as well as before, any
judgment), payable on demand. Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
This Note is issued in connection with the transaction
contemplated by the Stock Purchase Agreement, dated as of the date hereof,
between the Promisor and the Holder.
This Note shall be binding upon the Promisor and his
successors and shall inure to the benefit of the Promisor and his successors;
provided, however, that the Promisor shall be personally liable to the Holder
only with respect to twenty-five percent (25%) of the portion of the Principal
Amount which shall remain unpaid at any time, plus accrued but unpaid interest
thereon. The Promisor shall not have any personal liability to the Company
with respect to the payment of the remaining portion of the Principal Amount or
accrued but unpaid interest thereon.
The Promisor hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
The provisions of this Note may be amended, modified, changed
or terminated only by an agreement in writing signed by the Promisor and the
Holder.
If at any time the indebtedness evidenced by this Note is
collected through legal proceedings or this Note is placed in the hands of
attorneys for collection, the Promisor hereby agrees to pay all costs and
expenses (including attorneys' fees) incurred by the Holder in collecting or
attempting to collect such indebtedness.
If any payment on this Note becomes due and payable on a day
other than a Business Day (as hereinafter defined), the maturity thereof shall
be extended to the immediately following Business Day and interest shall
continue to accrue during such extension. "Business Day" means any day other
than a Saturday or Sunday or any other day on which commercial banks in New
York, New York are authorized or obligated by law to close.
This Note is non-transferable except to a person or entity
that succeeds (by transfer of assets, other reorganization or otherwise) to all
or substantially all of the business of Holder.
THE PROMISOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT HE MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS NOTE AND AGREES THAT ANY SUCH DISPUTES SHALL BE TRIED BEFORE
A JUDGE SITTING WITHOUT A JURY.
<PAGE> 7
THIS NOTE IS GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
___________________________________
CHARLES WEBER
<PAGE> 8
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), by and
between THE PRODUCERS ENTERTAINMENT GROUP LTD. (the "Company"), a Delaware
corporation, and CHARLES WEBER (the "Executive"), dated as of the 25TH day of
JANUARY, 1996.
W I T N E S S E T H
WHEREAS, the Company employs the Executive and desires to
provide to the Executive the opportunity to purchase shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), in consideration
of the past services rendered by the Executive, and other good and valuable
consideration as provided herein; and
WHEREAS, the Executive desires to purchase certain shares of
Common Stock from the Company;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties agree as follows:
1. Sale And Purchase Of Common Stock. Subject to the
terms and conditions of this Agreement and the Note (as defined below), (i) the
Company hereby sells to the Executive One Million Four Hundred Thousand
(1,400,000) shares of Common Stock the "Shares") at a purchase price of $0.55
per share (the "Purchase Price"), (ii) and the Executive hereby purchases such
Shares from the Company for such Purchase Price. The Executive shall pay the
Purchase Price by issuing to the Company, concurrently with the execution and
delivery of this Agreement, a promissory note substantially in the form
attached as Exhibit A hereto (the "Note"), and the Executive's sole liability
to make payments to the Company under this Agreement shall be his liability
under the Note. The Shares are duly authorized, validly issued, fully paid and
nonassessable, but the Shares are subject to the terms and conditions of this
Agreement. The Company issues concurrently herewith a duly executed
certificate evidencing the Shares purchased hereunder, with the legends
provided for herein, in exchange for the delivery by the Executive of the duly
executed Note.
2. Pledge.
(a) As security for the fulfillment of his
obligations under the Note, the Executive hereby pledges, hypothecates,
assigns, transfers, sets over, delivers and grants to the Company a security
interest in (i) the Shares, (ii) all dividends, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Shares, (iii) subject to the
provisions of Section 4 hereof, all rights and privileges of the Executive with
respect to the Shares and the other property referred to in clause (ii), and
(iv) subject to the provisions of Section 4 hereof, all proceeds of any of the
foregoing and any property of any character whatsoever into which any of the
foregoing may be converted (all items referred to in clauses (i) through (iv)
above being hereinafter collectively called the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, title, interests, powers, privileges and preferences pertaining or
incidental thereto, unto the Company, its successors and assigns, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth;
and provided that such Pledged Collateral or a proportional amount thereof
(based on the ratio of the payments of principal on the Note to the total
Purchase Price) shall be released by the Company and returned to the Executive,
without representation or recourse, as the Executive shall make the payments
required to be made under the Note.
(b) The Executive hereby delivers, and agrees
promptly to deliver, to the Company any and all Pledged Collateral, and any and
all certificates or other instruments or documents
<PAGE> 9
representing any of the Pledged Collateral, which shall be in or come into the
Executive's possession during the term of this Agreement.
(c) If the Executive shall not make any payment
required to be made on the Note at the time such payment is due, the Company
may sell, assign, transfer, endorse and deliver all, from time to time, any
part of the Pledged Collateral to any third party or to the Company at a price
per Share equal to $770,000.00 or, if less than $0.55 per share, at the fair
market value of a Share as determined in good faith by the Company. The
proceeds of the sale of all or any part of the Pledged Collateral shall be
applied by the Company first to accrued interest then to the then-outstanding
principal amount of the Note. Any remaining amount from such sale shall be
paid over to the Executive.
3. Executive's Representations; Sources of Funds.
(a) The Executive represents to the Company that
he is purchasing the Shares being purchased hereunder for his own account and
not as nominee or agent for any other person and not with a view to, or for
offer or sale in connection with, any distribution thereof (within the meaning
of the Securities Act of 1933 (the "Securities Act") which would be in
violation of the securities laws of the United States of America or any state
thereof, without prejudice, however, to his rights at all times to sell or
otherwise dispose of all or any part of said Shares under an effective
registration statement under the Securities Act, or under an exemption from
such registration available under the Securities Act and subject, nevertheless,
to the disposition of his property being at all times within his control
(subject to the restrictions of this Agreement).
(b) The Executive further represents that he is
knowledgeable, sophisticated and experienced in business and financial matters;
that he fully understands the limitations on transfer described herein; that he
is able to bear the economic risks of his investment in the Shares and is
presently able to afford the complete loss of such investment; and that he has
been afforded access to information about the Company, the Company's financial
condition, results of operations, business, property, management and prospects
sufficient to enable him to evaluate his investment in the Shares.
(c) The Executive further represents that he is
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
under the Securities Act.
(d) The Purchaser will not Transfer the Shares in
violation of any federal or state securities law. For purposes of this
Agreement, "Transfer" shall mean any transfer, sale, assignment, pledge or
other disposition. If the Purchaser desires to sell or otherwise dispose of
all or any part of the Shares (other than a Transfer to the Company or a
Transfer pursuant to an effective registration statement under the Securities
Act and pursuant to registration or qualification under any applicable state
securities laws), if requested by the Company, it will deliver to the Company
an opinion of counsel, reasonably satisfactory in form and substance to the
Company, that an exemption from registration is available. The stock
certificate for the Shares shall bear an appropriate legend reflecting such
restriction.
4. Restrictions Applicable to the Shares.
(a) Unless vested earlier upon the happening of
certain events, as provided in section 4(c) hereof, the Purchaser's rights to
retain the Shares free of any rights of the Company with respect to the Shares
(other than the Company's rights to such portion of the Shares that is pledged
as security for the Note) shall vest in accordance with the following schedule
if the Purchaser is engaged to render services to the Company pursuant to the
Production Agreement between the Purchaser and Company (the "Production
Agreement") as of such date:
<PAGE> 10
<TABLE>
<CAPTION>
Cumulative Percentage of Shares Date of Vesting
------------------------------- ---------------
<S> <C>
50% April 1, 1996
75% June 30, 1996
100% June 30, 1997
</TABLE>
Until the Shares have vested, the Purchaser may not Transfer the Shares and the
stock certificate representing the Shares shall bear an appropriate legend to
that effect.
(b) All cash dividends payable with respect to
the Shares will be paid directly to the Purchaser at the same time that
dividends are paid with respect to all other shares of Common Stock. The
Purchaser will have the right to vote the Shares.
(c) The Shares will be subject to the following
provisions upon a Change in Control of the Company or upon any other
termination of the Purchaser's engagement by the Company under the Production
Agreement which may occur before the Shares have vested in accordance with
Section 4(a).
(i) Change in Control. Upon a Change in Control during
the Purchaser's engagement by the company, all of the
Shares which have not vested in accordance with
Section 4(a) shall immediately vest in, and shall not
be subject to forfeiture by, the Purchaser. For
purposes of this Agreement, a Change in Control shall
have the meaning provided in the Production
Agreement.
(ii) Death or Disability. If the Executive's employment
by the Company is terminated by reason of his death
or Disability, all of the Shares which have not
previously vested in accordance with Section 4(a) or
Section 4(c)(i) shall immediately vest in, and shall
not be subject to forfeiture by, the Executive. For
purposes of this Agreement, "Disability" shall have
the meaning provided in the Employment Agreement.
(iii) Termination by the Company without Cause or by the
Executive for Good Reason or upon Retirement. If the
Company terminates the Executive's employment without
Cause or if the Executive terminates his employment
for Good Reason or upon Retirement, all of the Shares
which have not vested in accordance with Section 4(a)
or Section 4(c)(i) shall immediately vest in, and
shall not be subject to forfeiture by, the Executive.
For purposes of this Agreement, "Cause" and "Good
Reason" shall have the meanings provided in the
Employment Agreement and "Retirement" shall mean
retirement in accordance with any retirement plan or
policy of the Company.
(iv) Other Termination of Employment. If the Executive's
employment terminates before a Change in Control
shall have occurred for any reason other than death,
Disability, termination by the Company other than for
Cause or termination by the Executive for Good Reason
or upon
<PAGE> 11
Retirement, then the Executive shall forfeit to the
Company the Shares which have not previously vested
in accordance with Section 4(a), and the Executive's
obligation under the Note with respect to the payment
of the Purchase Price (at $0.50 per share plus
interest accrued thereon in accordance with the terms
of the Note) for the number of Shares so forfeited
shall be forgiven by the Company and the Executive
shall have no further liability under the Note with
respect to the amount so forgiven.
5. Successors.
This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representative. This Agreement shall inure to the benefit of the Company and
its successors.
6. Miscellaneous.
(a) Applicable Law. This Agreement shall be
governed by and construed in accordance with laws of New York, applied without
reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(c) Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered or mailed to the other party by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Charles Weber
120 S. Carmelina Avenue
Los Angeles, CA 90049
IF TO THE COMPANY:
The Producers Entertainment Group Ltd.
9150 Wilshire Boulevard, Suite 205
Beverly Hills, CA 90212
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only when actually received by the addressee.
(d) Severability. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.
(e) Waiver. Waiver by any party hereto of any
breach or default by any other party of any of the terms of this Agreement
shall not operate as a waiver of any other breach or default, whether similar
to or different from the breach or default waived.
<PAGE> 12
(f) Entire Agreement. This Agreement constitutes
the entire agreement between the parties hereto with respect to the matters
referred to herein other than the Employment Agreement, and no other agreement,
verbal or otherwise, shall be binding as between the parties unless it is in
writing and signed by the party against whom enforcement is sought. All prior
and contemporaneous agreements and understandings between the parties with
respect to the subject matter of this Agreement other than the Employment
Agreement are superseded by this Agreement.
(g) Survival. The respective rights and
obligations of the parties hereunder shall survive any termination of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations.
(h) Captions and References. The captions of
the Agreement are not part of the provisions hereof and shall have no force or
effect. References in this Agreement to a section number are references to
sections of the Agreement unless otherwise specified.
IN WITNESS WHEREOF, the Executive has hereunto set
his hand and the Company has caused this Agreement to be duly executed in its
name on its behalf all as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT
GROUP LTD.
By: ____________________________
Its: ___________________________
EXECUTIVE
CHARLES WEBER
________________________________
<PAGE> 13
EXHIBIT A
PROMISSORY NOTE
$_______________ Los Angeles, California
___________ ____, 19___
FOR VALUE RECEIVED, the undersigned, CHARLES WEBER (the
"Promisor"), hereby promises to pay to the order of THE PRODUCERS ENTERTAINMENT
GROUP LTD., a Delaware corporation or its successors (the "Holder"), the
principal sum of SEVEN HUNDRED SEVENTY THOUSAND DOLLARS ($770,000.00) or such
lesser amount as may then be the unpaid principal balance hereof (the
"Principal Amount"), together with interest thereon, payable by certified or
official bank check or wire transfer of immediately available funds to an
account designated by the Holder in accordance with the following schedule:
twelve and one-half percent (12-1/2%) of the Principal Amount plus all accrued
but unpaid interest thereon will be payable on April 1, 1997, twelve and
one-half percent (12-1/2%) of the Principal Amount (as calculated without
regard to any prior payments thereof) plus all accrued but unpaid interest
thereon will be payable on October 1, 1998, and the balance of the Principal
Amount plus all accrued but unpaid interest thereon will be payable on October
1, 2000.
The Promisor promises to pay interest on the Principal Amount
of this promissory note (this "Note") from the date hereof until such Principal
Amount is paid in full at the fixed rate of 7% per annum compounded
semiannually, such interest payable in accordance with the foregoing schedule;
provided, however, that any Principal Amount hereof not paid when due and, to
the fullest extent permitted by applicable law, any overdue interest shall bear
interest at a rate per annum equal to 10% (after, as well as before, any
judgment), payable on demand. Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
This Note is issued in connection with the transaction
contemplated by the Stock Purchase Agreement, dated as of the date hereof,
between the Promisor and the Holder.
This Note shall be binding upon the Promisor and his
successors and shall inure to the benefit of the Promisor and his successors;
provided, however, that the Promisor shall be personally liable to the Holder
only with respect to twenty-five percent (25%) of the portion of the Principal
Amount which shall remain unpaid at any time, plus accrued but unpaid interest
thereon. The Promisor shall not have any personal liability to the Company
with respect to the payment of the remaining portion of the Principal Amount or
accrued but unpaid interest thereon.
The Promisor hereby waives presentment, demand, notice,
protest and all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
The provisions of this Note may be amended, modified, changed
or terminated only by an agreement in writing signed by the Promisor and the
Holder.
If at any time the indebtedness evidenced by this Note is
collected through legal proceedings or this Note is placed in the hands of
attorneys for collection, the Promisor hereby agrees to pay all costs and
expenses (including attorneys' fees) incurred by the Holder in collecting or
attempting to collect such indebtedness.
If any payment on this Note becomes due and payable on a day
other than a Business Day (as hereinafter defined), the maturity thereof shall
be extended to the immediately following Business Day and interest shall
continue to accrue during such extension. "Business Day" means any day other
than a Saturday or
<PAGE> 14
Sunday or any other day on which commercial banks in New York, New York are
authorized or obligated by law to close.
This Note is non-transferable except to a person or entity
that succeeds (by transfer of assets, other reorganization or otherwise) to all
or substantially all of the business of Holder.
THE PROMISOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT HE MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS NOTE AND AGREES THAT ANY SUCH DISPUTES SHALL BE TRIED BEFORE
A JUDGE SITTING WITHOUT A JURY.
THIS NOTE IS GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
___________________________________
CHARLES WEBER
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 188,282
<SECURITIES> 0
<RECEIVABLES> 806,300
<ALLOWANCES> 0
<INVENTORY> 1,045,840
<CURRENT-ASSETS> 0
<PP&E> 66,893
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,320,422
<CURRENT-LIABILITIES> 310,759
<BONDS> 0
0
1,000
<COMMON> 13,856
<OTHER-SE> 1,994,777
<TOTAL-LIABILITY-AND-EQUITY> 2,009,633
<SALES> 1,674,894
<TOTAL-REVENUES> 1,674,874
<CGS> 697,000
<TOTAL-COSTS> 697,000
<OTHER-EXPENSES> 1,784,035
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (563,704)
<INCOME-TAX> 0
<INCOME-CONTINUING> (563,704)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (563,704)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
