- 97 -
At some point thereafter, the TroMetro distribution
agreement and the Troma distribution agreement were terminated.
Both TroMetro and SMHC waived any rights under those agreements
to all royalties that had accrued between December 23, 1997, and
September 2, 1999.
E. Letter Agreement With TroMetro
On March 29, 2001, Mr. van Merkensteijn, on behalf of
TroMetro, and Mr. Lerner, on behalf of SMP, entered into a letter
agreement. Pursuant to this letter agreement, TroMetro deferred
its right to exercise the TroMetro stock option for no more than
6 months.
F. Troma Finance, LLC
As of December 12, 2001, Troma Finance, LLC (Troma Finance),
SMP, and TroMetro entered into an “Operating Agreement of Troma
Finance LLC”. Pursuant to this agreement, Troma Finance was
formed and TroMetro was designated as its manager.68
As of December 12, 2001, Troma Finance and TroMetro executed
a document entitled “Capital Contribution and Assignment and
68 Mr. Lerner testified that Troma Finance was formed with a
view of consolidating all the ownership interests in Troma into
one entity for purposes of making a sale of the company.
According to Mr. Lerner, Mr. van Merkensteijn was negotiating
with a certain party for the sale of Troma, and “he wanted to
make sure that all of the ownership interests were in one entity
so he wouldn’t have to keep going back around”.
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