SETTLEMENT AND MUTUAL RELEASE AGREEMENT
This Settlement and Mutual Release Agreement is made the thirty-first day
of August, 1996 between Out-Takes, Inc., a Delaware corporation ("Company"), and
Xxxxxx X. Xxxxxxx ("RHS") and Xxxx X. Xxxxxxxx Xxxxxxx ("LPS"), and Photo
Corporation Group Pty. Ltd., an Australian incorporated company ("PCG"),
Whereas, the parties have reached agreement in relation to the cessation
of employment of RHS and LPS with the Company from and effective September 1,
1996 and it is intended that this agreement detail the terms and conditions
related thereto.
Now, in consideration of the conditions, covenants and other obligations
set forth in this agreement and other good and valuable consideration the
receipt of which is hereby acknowledged, the Parties agree as follows:
1. Definitions and Interpretations.
1.1 In this agreement the following terms have the meanings stated:
a. "PCG Group" shall mean PCG and its subsidiaries and each and all
of their officers, directors, employees, shareholders, owners, representatives,
past employees, attorneys, agents, predecessors, successors, assigns, subsidiary
corporations, parent corporations, joint venturers, sibling corporations and
affiliates and each and all of their respective related or affiliated persons,
firms, corporations, associations, partnerships and/or other entities related
thereto of each and every kind or nature whatsoever, regardless of the name or
names under which any of them may now or in the future be known and/or do
business.
b. "Business Day" shall mean Monday to Friday inclusive,
excepting any public or bank holiday in Los Angeles, California.
c. "Claim" shall mean any and all claims, demands, rights, disputes,
controversies, causes of action, rights of actions, rights of subrogation,
rights of indemnity, rights to reimbursement, rights to payment, liens and
remedies of each and every kind or nature whether civil, at law, in equity,
vested, contingent, accrued or unaccrued, or known or unknown to the parties or
any of them.
d. "Company Group" shall mean the Company and each and all of their
officers, directors, employees, shareholders, owners, representatives, past
employees, attorneys, agents, predecessors, successors, insurers, assigns,
subsidiary corporations, parent corporations, joint venturers, sibling
corporations and affiliates and each and all of their respective related or
affiliated persons, firms, corporations, associations, partnerships and/or other
entities related thereto of each and every kind or nature whatsoever, regardless
of the name or names under which any of them may now or in the future be known
and/or do business.
e. "Default" shall mean:
(i) in respect to an obligation pursuant to this agreement to
pay money such amount due is not paid within five (5) Business Days of receipt
of a written notice from the Party to whom the amount is due detailing the
amount payable and requesting payment;
(ii) in respect to any other obligation, performance of such
obligation has not occurred within fifteen (15) Business Days of receipt of a
notice detailing the obligation not performed and requesting performance; and
(iii) in respect to the Company, an Event of Default (as that
expression is defined in the Security Agreement) has occurred by the Company
pursuant to the Security Agreement.
f. "De Nur" shall mean Mr. and Xxx. Xxxxx Xx Xxx and Xxxx X.
Xx Xxx.
g. "Employees" shall mean RHS and LPS, jointly and severally.
h. "Excluded Claims" shall mean any rights that may accrue to the
Employees based upon their status as stockholders of the Company or any claim
that is covered by workers compensation legislation to the extent only of the
amount payable to the Employees pursuant to such workers compensation
legislation.
i. "Irvine Studio" shall mean the photographic studio operated by
the Company at the Entertainment Center at Irvine Spectrum,Irvine, California.
j. "LPS Put Price" shall mean the LPS Remaining Shares multiplied
by twenty cents ($0.20) per share.
k. "LPS Put Notice" shall mean the notice referred to in
paragraph 11.1.
l. "LPS Remaining Shares" shall mean the number of Shares
beneficially owned by LPS less the number of Shares
purchased
by LPS after the date of this agreement.
m. "Month" shall mean calendar month.
n. "Obligation" shall mean any and all obligations, duties,
liabilities, damages, costs, fees, expenses and debts of each and every kind or
nature whatsoever, vested or contingent, accrued or unaccrued, whether known or
unknown to the parties or either of them.
o. "Option Window" shall mean
(i) the period September 1, 1998 to November 30, 1998;
(ii) at any time the Company is in Default and PCG is the
beneficial owner of twenty-five percent (25%) or more of the issued and
outstanding Shares;
(iii) for a period of three (3) months after PCG provides
written notice to the Employees that PCG has reduced its beneficial ownership of
Shares below twenty-five percent (25%) of the issued and outstanding Shares
provided that such disposal is at an average price equal to or in excess of
thirteen cents ($0.13) per Share;
(iv) for a period of three (3) months after PCG becomes
insolvent or makes an assignment for the
benefit of creditors; or
(v) for a period of three (3) months after any proceedings by
or against PCG is commenced under any bankruptcy, reorganization, management,
readjustment of debt or moratorium law or statute or for PCG dissolution or
liquidation and is not withdrawn or stayed within 28 days of commencement.
p. "Parties" shall mean RHS, LPS, the Company and PCG.
q. "Party" shall mean any of Employees, PCG or the Company.
r. "Prime Rate" shall mean the prime rate of interest announced
by the Bank of America applicable on the first Business Day of
each month.
s. "RHS Put Notice" shall mean the notice referred to in
paragraph 10.1.
t. "RHS Put Price" shall mean the RHS Remaining Shares
multiplied by twenty cents ($0.20) per share.
u. "RHS Remaining Shares" shall mean the number of Shares
beneficially owned by RHS and De Nur less the number of shares purchased by RHS
and/or De Nur after the date of this agreement.
v. "Security Agreement" shall mean the security
agreement as set out in the First Schedule attached
hereto and made a part hereof.
w. "Studios" shall mean the photographic studios operated
by the Company at Universal City Walk, Los
Angeles, California and the Irvine Studio.
x. "Shares" shall mean shares of common stock of the Company.
y. "Third Persons" means any and all persons, firms,
corporations, associations, partnerships and/or
other entities of each and every kind or nature whatsoever, other than the
Parties.
1.2 Reference to clauses, paragraphs and schedules shall mean references
to clauses, paragraphs and schedules of this agreement.
1.3 The singular shall include the plural and vice versa.
2. Termination of Employment and Payment to RHS.
2.1 The employment of RHS with the Company shall cease from and effective
September 1, 1996 and until such date the terms of the existing employment
agreement between RHS and the Company (including the obligation to pay
reimbursable expenses) shall remain in full force and effect.
2.2 The Company shall pay to RHS the sum of $198,654.86
("RHS Settlement Amount") representing:
a. Accrued but unpaid salary of $107,033.00;
b. Accrued but unutilized vacation salary of $23,076.00;
c. A voluntary severance payment of $60,000.00;
d. Interest on the after-tax amount referred in
sub-paragraph 2.2 a from July 29, 1995 to August 31,
1996 of $8,545.00.
2.3 The RHS Settlement Amount shall be paid to RHS by Company check in the
amounts and at the time set forth in the Third Schedule attached hereto and made
a part hereof.
2.4 If the Company is not in Default , the Company shall be entitled to
pay only the amounts listed as "Discounted Obligations" in the Third Schedule
and such amount shall be accepted in full satisfaction by RHS. For the purpose
of clarification if the Company is in Default after some of the amounts referred
to as Discounted Obligations in the Third Schedule have been paid, RHS shall not
be entitled to recover the difference between the Discounted Obligations and the
Contract Obligations as set out in the Third Schedule for any given period for
any of the payments made prior to Default.
2.5 The amounts payable pursuant to paragraph 2.3 shall be paid after tax
and the Company shall pay to the Internal Revenue Service ("IRS") and the
California Franchise Tax Board ("FTB") the amount of tax so deducted in
accordance with the Company's usual remittance and shall provide at the end of
each year the usual statement as to the gross amount received by RHS and the tax
paid to the IRS and the FTB.
2.6 RHS may advise the rate of deduction to be applied for the purpose of
clause 2.5 and in the absence of any such advice the rate of deduction shall be
35% for IRS purposes only.
2.7 Provided that the Company is not in Default interest calculated at
the Prime Rate on the after-tax portion of the Discounted Obligations as set out
in the Third Schedule (assuming a tax deduction rate of 35%) outstanding from
time to time from September 1, 1996 shall be paid to RHS by Company check on
each fourth Friday commencing on September 6, 1996 and if the Company is in
Default such calculation shall be made on the Contract Obligations as set out in
the Third Schedule from the time that the Company is in default.
3. Termination of Employment and Payment to LPS.
3.1 The employment of LPS with the Company shall cease from and effective
September 1, 1996 and until such date the terms of the existing employment
agreement with LPS (including the obligation to pay reimbursable expenses) shall
remain in full force and effect.
3.2 The Company shall pay to LPS the sum of $126,968.00
("LPS Settlement Amount") representing:
a. Accrued but unpaid salary of $62,513.00;
b. Accrued but unutilized vacation salary of $16,346.00;
c. A voluntary severance payment of $42,500.00;
d. Interest on the after-tax amount referred to in
sub-paragraph 3.2 a from July 29, 1995 to August 31,
1996 of $5,609.00.
3.3 The LPS Settlement Amount shall be paid to LPS by Company check in the
amounts and at the terms set forth in the Third Schedule attached hereto and
made a part hereof.
3.4 If the Company is not in Default the Company shall be entitled to pay
only the amounts listed as "Discount Obligations" in the Third Schedule and such
amount shall be accepted in full satisfaction by LPS. For the purpose of
clarification if the Company is in Default after some of the amounts referred to
as Discounted Obligations in the Third Schedule have been paid, LPS shall not be
entitled to recover the difference between the Discounted Obligations and the
Contract Obligations as set out in the Third Schedule for any given period for
any of the payments made prior to Default.
3.5 The amounts payable pursuant to paragraph 3.3 shall be paid net of
tax and the Company shall pay to the IRS and the FTB the amount of tax so
deducted in accordance with the Company's usual remittance and shall provide at
the end of each year the usual statement as to the gross amount received by RHS
and the tax paid to the IRS and the FTB.
3.6 LPS may advise the rate of deduction to be applied for the purpose of
clause 3.5 and in the absence of any such advice the rate of deduction shall be
35% for IRS purposes only.
3.7 Provided that the Company is not in Default interest calculated at
the Prime Rate on the after-tax portion of the Discounted Obligations as set out
in the Third Schedule (assuming a tax deduction rate of 35%) outstanding from
time to time from September 1, 1996 shall be paid to LPS by Company check on
each fourth Friday commencing on September 6, 1996 and if the Company is in
Default such calculation shall be made on the Contract Obligations as set out in
the Third Schedule from the time that the Company is in default.
4. Security to Employees.
4.1 Contemporaneously with the execution of this agreement by the Parties
the Company shall execute the Security Agreement and do all acts and things
necessary to register a UCC-1 filing in respect of the Security Agreement.
4.2 Forthwith upon payment of all amounts required pursuant to clauses 2
and 3 of this agreement, the Employees shall execute and deliver to the Company
a UCC-2 filing releasing in its entirety the UCC-1 filing referred to in
paragraph 4.1.
4.3 If the Employees default in the execution of the UCC-2 filing referred
to in paragraph 4.2, the Employees hereby grant to the Company their power of
attorney for the sole purpose of executing and filing such UCC-2 filing.
5. Non-Competition and Other Covenants.
5.1 The Employees shall not, until September 1, 1998 directly or
indirectly by ownership of securities or otherwise engage in any business which
is competitive with the Company or become associated with, or render services to
any person, business or enterprise so engaged. Mere ownership as an investor of
not more than five percent (5%) of the securities of a corporation or other
business enterprise which is not directly or indirectly involved in the portrait
photography industry shall not be deemed an association with such corporation or
enterprise.
5.2 For the purpose of clause 5.1 the term "engaged in any business
which is in competition with the Company" shall mean:
a. Negotiating or entering into agreements in relation to the
operation of a retail digital photographic portrait studio
with:
(i) any current landlord (or any of their related entities)
of the Company relating to the Studios;
(ii) any Third Person relative to the markets of Las Vegas,
Orlando or within a ten (10) mile radius
of the Studios;
b. Negotiating or entering into agreements with any current licensor
to the Company of photographic images for the purpose of incorporating such
images into the operation of a retail digital photographic portrait studio;
and/or
c. Development of computer programs or other processes which are
used by retail digital photographic portrait studios in the markets of Las
Vegas, Orlando or within a ten (10) mile radius of the Studios.
5.3 The Employees shall not, until September 1, 1998, directly or
indirectly employ, cause others to employ, or attempt to induce others to employ
any employees of the Company or attempt to induce said employees to gain or seek
other employment.
5.4 The Employees shall not at any time communicate or disclose, or use
for the Employees' own account, any of the data, information, written materials,
computer coding, records, notes, reports, letters, processes, equipment,
techniques or products of the Company, customer lists, or other information
concerning its business or affairs obtained during the Employees' employment
with the Company, provided that these obligations shall not apply in the event
and to the extent that such confidential information becomes generally known to
and available for use by the public other than by the Employees' act or
omission.
5.5 The Employees shall, to the extent requested by the Company, do all
things, including giving of evidence in suits and other proceedings, which the
Company reasonably deems necessary to obtain, maintain, defend or assert rights
accruing to the Company during the Employees' period of employment with the
Company and in connection with which the Employees have knowledge, information
and expertise. All reasonable expenses incurred by the Employees in fulfilling
the duties set forth in this paragraph, shall be reimbursed by the Company to
the full extent legally appropriate, including, without limitation, a reasonable
payment for the Employees' time unless the Employees' duties arise from his or
her prior actions which were not authorized by the Company and which were
outside the scope of his or her employment.
6. Medical Insurance.
6.1 At the request of the Employees, the Company shall execute all such
documents and use all reasonable endeavors to permit the Employees to remain a
participant under the Company's current health plan until March 31, 1998.
6.2 The Employees shall be responsible for all payments, fees, and dues
necessary to retain membership pursuant to the Company's current health plan.
6.3 The Company retains the right to modify its current health plan,
provided that such modification does not have a material adverse effect on the
Employees.
7. Consultancy.
7.1 To the extent requested by the Company and to the extent agreed by the
Employees, the Employees shall render such services and perform such duties for
the Company as it may reasonably request ("Consultancy Services").
7.2 Unless otherwise agreed in advance, the Company shall:
a. Reimburse the Employees for reasonable expenses incurred in
performing the Consultancy Services.
8.
(OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION)
(OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION)
9. Release.
9.1 The Employees release, acquit, and forever discharge the Company Group
and the PCG Group from any and all claims and obligations of each and every kind
whatsoever, that the Employees have or may hereafter obtain or accrue in
relation to their employment or cessation of their employment with the Company,
including, but without limiting the generality of the foregoing, any fact,
matter, incident, claim, injury, event, circumstance, happening, occurrence
and/or thing of any kind, or nature whatsoever which arose or occurred at any
time prior to the date of execution of this agreement including, but not limited
to claims for wrongful discharge, breach of implied or expressed employment
contract, negligent or intentional infliction of emotional distress, fraud,
malicious prosecution, abuse of process, unlawful discrimination based upon age,
race, sex, marital status, religion, national origin, medical condition,
disability, handicap or otherwise, breach of any implied covenants of good of
faith and fair dealing, violation of any section of the labor code of the State
of California, the California Fair Employment Housing Act ("FEHA"), Title VII of
the Civil Rights Act of 1964 ("Title VII"), the Age Discrimination in Employment
Act of 1967 as amended ("ADEA"), the Americans With Disabilities Act ("ADA"), or
any other federal, state or local laws or regulations, unpaid wages, salary,
bonuses, commissions, or other compensation, any damages of any nature,
including compensatory, general, special or punitive and/or costs, fees or other
expenses, including attorneys fees incurred in any of these matters.
9.2 The Employees specifically agree that this agreement is made by them
with their full, complete, unrestricted and informed knowledge and consent that
this agreement covers any and all possible Claim and Obligation relating to the
Employees' employment or cessation of employment with the Company; and that the
consideration stated in this agreement is all that the Employees and/or any of
their heirs, assigns, agents, attorneys, representatives and/or affiliates
and/or any other natural or fictitious person affiliated or in privity with them
in any manner are ever to receive from the Company Group and the PCG Group for
any and all Claim and Obligation of any kind or nature on account of the
employment and the cessation of employment with the Company and/or any fact,
matter, incident, claim, injury, event, circumstance, happening, occurrence
and/or thing of any kind or nature, which arose or occurred at any time prior to
the date of the Employees' execution of this agreement.
9.3 The Company and PCG hereby release, remise, acquit and forever
discharge the Employees of and from any and all Claim and Obligation of each and
every kind or nature whatsoever which the Company has or may hereafter obtain or
accrue on account of the employment, or cessation of employment of the Employees
with the Company and/or any fact, matter, incident, claim, injury, event,
circumstance, happening, occurrence and/or thing of any kind or nature
whatsoever which arose or occurred at any time prior to the date of the
Company's and PCG's execution of this agreement.
9.4 The Company specifically agrees that this agreement is made by it with
its full, complete, unrestricted and informed knowledge and consent that this
agreement covers any and all possible Claim and Obligation; and that the
consideration stated in this agreement is all that it and/or any of its assigns,
agents, attorneys, representatives and/or affiliates and/or any other natural or
fictitious person affiliated or in privity with it in any manner are ever to
receive from the Employees for any and all Claim and Obligation of any kind or
nature on account of the employment and cessation of employment by the Employees
with the Company, and/or any fact, matter, incident, claim, injury, event,
circumstance, happening, occurrence and/or thing of any kind or nature, which
arose or occurred at any time prior to the date of the Company's execution of
this agreement.
9.5 The Parties specifically agree that their release of the other set
forth in this agreement extends to all Claim and/or Obligation of any kind or
nature whatsoever, including but not limited to any and all Claims and/or
Obligations which might be cognizable before any federal and/or state agency
and/or federal and/or state court, and they expressly, knowingly and voluntarily
waive all rights under Section 1542 of the Civil Code of the State of
California. Said Section 1542 provides as follows:
1542. General Release - Claims Extinguished.
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.
For all purposes of this Agreement, the term "creditor" as used and
referred to in Section 1542 of the Civil Code of the State of California means
and refers to RHS, LPS, the Company, PCG and each of them.
9.6 For the consideration described in this agreement, the Parties agree
that they will not file against the other or permit to be filed on their behalf
against the other, any claim, grievance, charge, complaint, lawsuit, legal
action, or other process of any kind, including, without limitation,
discrimination in employment and/or for any benefits under any or all benefit
plans, whether formal or informal, with any court, board, panel, agency,
commission, department, organization or other entity concerning the employment,
or the termination of employment of the Employees with the Company and/or any
fact, matter, incident, claim, injury, event, circumstance, happening,
occurrence and/or thing of any kind or nature which arose or occurred at any
time prior to the date of the execution of this agreement.
9.7 Notwithstanding anything to the contrary in this agreement, the
provisions included in this clause 9 shall not apply to any Excluded Claims.
10. RHS Put Option.
10.1 At any time during the Option Window, RHS may require PCG to purchase
the RHS Remaining Shares at the time of the RHS Put Notice for the RHS Put Price
by providing written notice thereof to PCG ("RHS Put Option").
10.2 Within seven (7) Business Days of the receipt by PCG of the RHS Put
Notice, at a place in Los Angeles, California and time notified by PCG to RHS,
not less than 24 hours after such notification, PCG shall in exchange for the
stock certificates for the RHS Remaining Shares and a signed transfer by the
beneficial owner thereof (confirming inter alia that the RHS Remaining Shares
are not the subject of any mortgage, pledge, lien, hypothecation, change, option
or other encumbrance whatsoever) pay to RHS by bank check, the RHS Put Price.
10.3 RHS may not give an RHS Put Notice if at any time prior to
giving of the RHS Put Notice:
a. The bid price for the Company's Shares reflected on the share
market where the Shares are listed has equalled or exceeded twenty cents ($0.20)
for a period of one Business Day and RHS has not within five (5) Business Days
of receipt of a written notice from PCG advising of such occurrence given a
standing sell order to a stock broker requesting that the stock broker sell all
the RHS Remaining Shares for at least twenty cents ($0.20) per share; or
b. RHS does not accept and complete an unconditional offer to
purchase all the RHS Remaining Shares at a price equal to or exceeding twenty
cents ($0.20) per share with payment by bank check in exchange for the Share
certificates for the RHS Remaining Shares and a signed transfer by the
beneficial owner thereof (confirming inter alia that the RHS Remaining Shares
are not the subject of any mortgage, pledge, lien, hypothecation, change, option
or other encumbrance whatsoever) to occur within seven (7) Business Days of the
date of the offer at a stated time and place in Los Angeles, California.
10.4 RHS warrants that the RHS Remaining Shares at the date of this
agreement, does not exceed 692,889.
10.5 RHS shall have the right to pledge, sell, mortgage or otherwise
dispose of all or any part of the RHS Remaining Shares and/or the RHS Put Option
set forth in this clause.
11. LPS Put Option.
11.1 At any time during the Option Window LPS may require PCG to purchase
the LPS Remaining Shares at the time of the LPS Put Notice for the LPS Put Price
by providing written notice thereof to PCG ("LPS Put Option").
11.2 Within seven (7) Business Days of the receipt by PCG of the LPS Put
Notice, at a place in Los Angeles, California and time notified by PCG to LPS,
not less than 24 hours after such notification, PCG shall in exchange for the
stock certificates for the LPS Remaining Shares and a signed transfer by the
beneficial owner thereof (confirming inter alia that the LPS Remaining Shares
are not the subject of any mortgage, pledge, lien, hypothecation, change, option
or other encumbrance whatsoever) pay to LPS by bank check, the LPS Put Price.
11.3 LPS may not give an LPS Put Notice if at any time prior to giving
of the LPS Put Notice:
a. The bid price for the Company's Shares reflected on the Share
market where the Shares are listed has equalled or exceeded twenty cents ($0.20)
for a period of one Business Day and LPS has not within five (5) Business Days
of receipt of a written notice from PCG advising of such occurrence given a
standing sell order to a stock broker requesting that the stock broker sell all
the LPS Remaining Shares for at least twenty cents ($0.20) per share; or
b. LPS does not accept and complete an unconditional offer to
purchase all the LPS Remaining Shares at a price equal to or exceeding twenty
cents ($0.20) per share with payment by bank check in exchange for the stock
certificates for the LPS Remaining Shares and a signed transfer by the
beneficial owner thereof (confirming inter alia that the LPS Remaining Shares
are not the subject of any mortgage, pledge, lien, hypothecation, change, option
or other encumbrance whatsoever) to occur within seven (7) Business Days of the
date of the offer at a stated time and place in Los Angeles, California.
11.4 LPS warrants that the LPS Remaining Shares at the date of this
agreement, does not exceed 192,389.
11.5 LPS shall have the right to pledge, sell, mortgage or otherwise
dispose of all or any part of the LPS Remaining Shares and/or the LPS Put Option
set forth in this clause.
12. Directorship.
12.1 RHS shall, on or before the date of execution of this agreement,
resign as a director of the Company.
13. Attorneys' Fees and No Admission of Liability.
13.1 The Parties agree that each Party to this agreement shall bear his,
her or its own attorneys' fees and costs incurred in connection with the
preparation and negotiation of this agreement. The Parties agree that no Party
to this agreement shall have any Obligation whatsoever in connection with the
compensation of any other parties respective attorneys in connection with the
preparation and negotiation of this agreement. The Parties also agree that they
are solely responsible for compensating their respective attorneys and each of
them in connection with the preparation and negotiation of this agreement.
13.2 The Parties agree that neither this agreement, their participation in
this agreement, anything contained in this agreement, nor the fulfillment by the
Parties of their Obligation pursuant to this agreement shall ever be construed
to be an admission of any liability by any Party to any other Party and/or to
any Third Person.
13.3 The Parties and each of the them specifically agree that no Party
shall be considered, for any purpose whatsoever or by any person whomsoever, to
have been the "prevailing Party" with respect to any allegations, charges or
causes of action which could have been alleged in any Claim or Obligation
covered by this agreement within the meaning of any statute, rule, regulation,
judicial decision, ordinance or other provision of law or any other definition
or meaning of any kind or nature which is or may be in any manner applicable to
this agreement and/or any of the paragraphs, terms and/or provisions of this
agreement.
14. Indemnification.
14.1 Each Party agrees that they will indemnify, defend, protect and hold
the other parties harmless from and against any and all Claim and Obligation,
including without limitation, reasonable attorneys' fees and costs of suit, on
account of any breach by that Party and/or any agent, representative, attorney,
heir and/or assign of that Party of any paragraph, term or provision of this
agreement and/or in the event that it ever becomes necessary for any Party to
defend against any Claim of any kind or nature whatsoever released by any other
Party in this agreement.
14.2 The Company acknowledges that as a director RHS and LPS were entitled
to certain indemnification from the Company (pursuant to Delaware Law, the
articles of association or the by-laws of the Company or otherwise) in relation
to claims brought against RHS and LPS in their capacity as directors, officers
and employees of the Company.
14.3 The Company agrees to continue to provide to RHS and LPS after the
execution of this agreement the same indemnification for actions brought against
them in their capacity as directors, officers and employees of the Company as
specified in paragraph 23.1 for the period during which they were directors,
officers and employees of the Company notwithstanding that they are not
directors, officers or employees of the Company after the execution of this
Agreement.
15. Successors and Assigns.
15.1 All agreements and Obligation made and undertaken by the Parties
pursuant to this agreement apply to and bind the Parties and each and all of
his, her or its heirs, assigns, agents, attorneys and/or representatives.
15.2 PCG shall not without the written consent of the Employees (which
consent shall not be unreasonably be withheld), assign its obligations pursuant
to this agreement.
16. No Other Filings .
16.1 The Parties agree that there is not pending between them any
lawsuits, actions, grievances, Claim, complaints, petitions, appeals, or
accusatory pleadings against any of the other Parties with any court, other
governmental agency, or any other public or private tribunal or forum prior to
their respective execution of this agreement.
17. Taxes.
17.1 The Employees acknowledge that they are or may be liable to one or
more governmental taxing authorities or other entities for taxes and/or other
payments on the consideration to be paid by the Company and/or PCG under this
agreement. The Employees agree that they will pay any and all taxes and/or other
payments which may be or become due on account of the consideration to be
received pursuant to this agreement and that the Company and/or PCG are not and
shall never be liable for any portion of any of the taxes and/or other payments,
provided that the Company shall continue to be obligated to pay any portion of
social security taxes as required by law. Other than is provided in the previous
sentence, the Employees agree that they will indemnify, defend and hold the
Company and PCG harmless from and for any and all Claims and/or Obligation
assessed against either of them on account of any and all taxes and/or other
payments which may be due to any and all taxing authorities on account of the
consideration to be received pursuant to this agreement.
18. Arbitration.
18.1 Any Claim between the Parties on account of this agreement; the
meaning, application and/or interpretation of this agreement, employment or
cessation of employment by the Employees with the Company including any and all
Claims pursuant to the FEHA, ADEA, ADA and/or Title VII; and/or any breach or
claimed breach of this agreement shall be settled solely by binding arbitration
in accordance with the Employment Dispute Rules of the American Arbitration
Association and the Federal Arbitration Act, or as the Parties otherwise agree.
Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
18.2 It is further agreed that the hearing for the arbitration shall take
place in Los Angeles County, California. The provisions of this clause 20 are
intended by the Parties to be absolutely exclusive for any and all purposes and
fully applicable to each and every Claim.
19. Ownership of Claims.
19.1 Other than to the extent that the Employees have transferred
beneficial ownership of certain Shares to De Nur, the Parties agree that they
have not heretofore assigned or transferred any of the Claim released by them in
this agreement, or any portion thereof or interest therein, to any Third Person
and that they have the full, complete and unrestricted right to release each and
all of the Claim and Obligation released by them in this agreement. The Parties
agrees to indemnify, defend, and hold each other harmless from and for any and
all Claim released by them in this agreement, on account of any such transfer or
assignment of any such Claim or any portion thereof or interest therein.
20. Acknowledgments.
20.1 Each Party has at all pertinent times and for all purposes in
connection with their Claim and this agreement had the unrestricted right and
opportunity to have, the full and complete benefit and advice of independent and
competent legal counsel chosen and retained solely by them and has had, and/or
has had the unrestricted right and opportunity to have, such legal counsel fully
explain to them the meaning of each and every paragraph, term and/or provision
of this agreement and the entire meaning and each and all of the consequences of
execution of this agreement.
20.2 This agreement is entered into by the Parties without any reliance
upon any agreement, statement, representation, promise, covenant, understanding
and/or other inducement of any kind or nature other than the express terms of
this agreement, and this agreement contains the entire, full and complete
agreement of the Parties without any exceptions or limitations whatsoever.
20.3 Each and all of the clauses, paragraphs, terms and/or provisions of
this agreement are contractual and not mere recitals, and each and every such
clause, paragraph, term and/or provision is of the essence of the entire
agreement contained in this agreement.
20.4 This agreement shall not ever, in any manner or for any purpose, by
any person whomsoever or based upon any foreseen or unforeseen facts, events,
circumstances, occurrences, happenings or things of any kind or nature, be
subject to any claim of mistake of fact or mistake of law by the Parties.
20.5 The headings in this agreement are inserted for convenience only; are
not part of this agreement; shall not in any manner affect the meaning of this
agreement or any clause, paragraph, term and/or provision of this agreement; and
shall not be deemed or interpreted to be a part of this agreement for any
purpose.
20.6 This agreement shall be interpreted solely pursuant to the laws of
the State of California without any regard or consideration for any conflicts of
laws principles.
20.7 The language of this agreement shall, for any and all purposes, be
construed as a whole, according to its fair meaning, not strictly for or against
any Party and without regard to the identity or status of any person or persons
who drafted all or any part of this agreement.
20.8 If any provision of this agreement is declared invalid by any court
of competent jurisdiction or rendered invalid by any other process of federal or
state law, the remaining provisions of this agreement shall remain in full force
and effect.
20.9 No waiver of any breach or condition of this agreement shall be
construed for any purpose as a waiver of any other breach or condition of this
agreement, regardless of the similarity or dissimilarity of the breaches or
conditions involved.
20.10 This agreement may be executed in multiple copies and after all of
the Parties have executed their respective copies, each copy will have the
effect of an original.
20.11 This agreement constitutes the sole and entire agreement between the
Employees and the Company Group and the PCG Group concerning the employment, and
the cessation of employment by the Employees with the Company and each and every
other aspect of the employment relationship of each and every kind or nature
whatsoever between the Employees and the Company Group and the PCG Group. This
agreement supersedes any and all prior agreements, contracts, representations,
understandings, discussions and/or negotiations, if any, whether oral or
written, and cannot be modified, altered or amended in any manner or respect
whatsoever except in a subsequent writing executed by the Parties.
21. Company Property/Employee Property.
21.1 On or before August 31, 1996 the Employees shall return to the
Company all property of the Company in the care, custody or control of the
Employees or reimburse the Company a reasonable amount for any lost or damaged
property.
21.2 On or before August 31, 1996 the Company shall return to the
employees all property of the Employees in the care, custody or control of the
Company or reimburse the Employees a reasonable amount for any lost or damaged
property.
22. Older Worker Benefit Protection Act Disclosure.
22.1 Employees further agree that: (1) They have been advised to consult
with an attorney of their choice concerning their employment and their cessation
of employment with the Company, this agreement and each and all of the results
and consequences of their execution of this agreement; (2) they had ample time
to consult with an attorney entirely of their own choice, concerning their
employment and their cessation of employment with the Company, this agreement
and each and all of the results and consequences of their execution of this
agreement; (3) they had not less than twenty-one (21) calendar days, and/or have
had the full, complete and unrestricted opportunity to have at least twenty-one
(21) calendar days, in which to consider their employment and their cessation of
employment with the Company, this agreement and each and all of the results and
consequences of their execution of this agreement; and (4) this agreement shall
not be effective until seven (7) calendar days after the execution of this
agreement by the Employees, provided that the Employees have not within that
seven (7) calendar day period, exercised the right to revoke their Employees
consent to this agreement by giving notice to their decision to revoke.
23. Notices.
23.1 All notices, requests, demands, directions and other communications
provided for hereunder shall be in writing and mailed, certified mail, return
receipt requested, transmitted by telecopier, or personally delivered, as
elected by the Party giving such notice, to the applicable Party at the address
indicated below:
If to Out-Takes, Inc.:
Out-Takes, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attention: President
And with a copy to:
Xx. Xxxxxx X. Xxxx
Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier Number: (000) 000-0000
If to Xxxxxx X. Xxxxxxx and/or Xxxx X. Xxxxxxxx Xxxxxxx:
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx
00 Xxx Xxxxx
Xxx. X-000
Xxxxxx, Xxxxxxxxxx 00000
Telecopier Number: (000) 000-0000
And with a copy to:
Xx. Xxxxxxx X. Xxxxx
Xxxxxx Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier Number: (000) 000-0000
If to Photo Corporation Group Pty. Ltd.:
Photo Corporation Group Pty. Ltd.
Suite 1A Xxxxxx Centre
000-000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxx X0X 0000
Xxxxxxxxx
Attention: Chief Executive Officer
Telecopier Number: 000-0000-0000
And with a copy to:
Xx. Xxxxxx X. Xxxx
Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier Number: (000) 000-0000
or, as to each Party, at such other address as shall be designated by such Party
in a written notice to each other Party complying as to delivery with the terms
of this Paragraph. All such notices, requests, demands, directions and other
communications shall be effective (i) When mailed, five (5) days after being
deposited in the mails addressed as aforesaid with postage prepaid, (ii) when
delivered personally, upon delivery pursuant to this Paragraph, or (iii) on the
next business day after transmission if transmitted by telecopier (and
appropriate answerbacks have been received).
24.
(OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION)
25.
(OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION)
Executed this 28th day of August, 1996.
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Executed this 28th day of August, 1996.
/s/ Xxxx Xxxxxxxx-Xxxxxxx
Xxxx X. Xxxxxxxx-Xxxxxxx
SIGNATURE PAGE CONTINUED
Executed this 28th day of August, 1996.
/s/ Xxxxx X. Xxxx
Out-Takes, Inc.
Executed this 28th day of August, 1996.
/s/ Xxxxx X. Xxxx
Photo Corporation Group Pty., Ltd.
================================================================================
===============================================================================
-48-
FIRST SCHEDULE
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and entered into as of this __ day of
August, 1996 by and between OUT-TAKES, INC. (hereinafter called "Debtor"), a
Delaware corporation, with offices at 0000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, and Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx-Xxxxxxx
(hereinafter collectively called "Creditor"), both of 00 Xxx Xxxxx, Xxx. X-000,
Xxxxxx, Xxxxxxxxxx 00000.
1. As used herein, the following terms shall have the following meanings.
Terms not otherwise defined herein shall have the meanings ascribed to them, if
any, under the California Commercial Code.
a. "Accounts" shall mean any and all rights now existing or
hereafter arising to payment for merchandise, goods, or commodities sold or
leased or to be sold or leased or for services rendered or to be rendered, no
matter how evidenced, including accounts, accounts receivable, general
intangibles, instruments, documents, purchase orders, notes, drafts,
acceptances, chattel paper and other forms of obligations owing to Debtor, all
guaranties and security therefor, all merchandise, goods, or commodities
returned to or reclaimed by Debtor and all of Debtor's Books (as that term is
defined below) relating to any of the foregoing.
b. "Books" shall mean all of Debtor's books and records, including,
without limitation: ledgers; records indicating, summarizing, or evidencing
Debtor's assets, Accounts, business operations or financial condition; computer
programs; computer discs or tape files; computer runs and other computer
printouts; and any other computer prepared information of any kind.
c. "Chattel Paper" shall mean a writing or writings of whatever
sort which evidence a monetary obligation and a security interest in or lease
of specific goods.
d. "Collateral" shall mean those items in which a security
interest is granted hereunder pursuant to
Paragraph 2 below.
e. "Deposit Accounts" shall mean any demand, time, savings, passbook
or like accounts maintained with a bank, savings and loan association, credit
union or like organization and any renewals, extensions and/or replacements
thereof, and all proceeds and accretions, including, without limitation,
interest and other property at any time and from time to time receivable or
otherwise entitled to be received on account thereof.
f. "Documents" shall mean any and all documents of title, bills of
lading, dock warrants, dock receipts, and warehouse receipts and shall include,
without limitation, other documents which purport to be issued by a bailee and
purport to cover goods in the bailee's possession which are either identified or
are fungible portions of an identified mass.
g. "Equipment" shall mean any and all things moveable or which are
fixtures which are used or bought for use primarily in the business of Debtor,
wherever located, now or hereafter existing, including, but not limited to all
software applications, photography rigs, computer network systems, computer
hardware, printers, and office furniture and all parts thereof and all additions
and accessions thereto and replacements thereof.
h. "Event of Default" shall mean any of those events described
in Paragraph 9 below.
i. "Fixtures" shall mean all plant fixtures, business fixtures, and
other fixtures and storage, office facilities, wherever located, now or
hereafter existing, and all additions and accessions thereto and replacements
therefor and products thereof.
j. "Instruments" shall mean any and all negotiable instruments,
securities (certificated and uncertificated) and every other
writing which evidences a right to the payment of money.
k. "Insurance" shall mean any and all policies of Insurance and
the proceeds thereof on or covering any or all of the Collateral.
l. "Inventory" shall mean any and all of Debtor's goods, merchandise
and other personal property, wherever located, now or hereafter existing,
including, without limitation, those held for display or demonstration or out on
lease or consignment or to be furnished under a contract of service or are raw
materials, work in process, finished materials, or materials used or consumed,
or to be used or consumed, in Debtor's business, and shall include, without
limitation, all packing and shipping materials, wherever located; and all other
items hereafter acquired by Debtor by way of substitution, replacement, return,
repossession or otherwise, and all additions and accessions thereto, and the
resulting product or mass, and any documents of title representing any of the
above.
m. "Obligations" shall mean any and all liabilities, debts, and
obligations of Debtor to Creditor pursuant to clauses 2 and 3 of the Settlement
and Mutual Release Agreement between the Debtor, the Creditor and Photo
Corporation Group Pty., Ltd. dated August __, 1996.
n. "Other Property" shall mean all of Debtor's personal property
other than Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment,
Instruments and Inventory, including, without limitation, patents, service
marks, trademarks, trade names, copyrights and proprietary rights, and general
intangibles.
2. As security for the payment by Debtor to Creditor of the Obligations,
Debtor hereby grants to Creditor a continuing security interest in all of the
following: Inventory, Accounts, Documents, Equipment, Deposit Accounts,
Instruments, Fixtures, Chattel Paper, Other Property, and goods and commodities,
whether now held or hereafter acquired (including all returns, rejections and
repossessions and whether raw materials, work in progress, or materials used or
consumed in Debtor's business), whether or not such be in the actual or
constructive possession of Debtor, and together with all proceeds arising from
any of the foregoing, and all Insurance proceeds of any and all of the
foregoing.
3. Debtor represents and warrants to Creditor that:
a. Debtor is duly organized and existing in good standing in the
jurisdiction of its incorporation without limit as to the duration of its
existence, and is duly qualified and in good standing in each jurisdiction in
which the character of the properties owned by it therein or in which the
transaction of its business makes such qualification necessary;
b. The execution, delivery and performance of this Security
Agreement are within Debtor's powers, have been duly authorized and are not in
conflict with applicable law or the terms of any charter, bylaws or other
incorporation papers;
c. Any and all financial information, including any and all Books,
records, Documents and other information relating to the Collateral, submitted
by Debtor to Creditor, whether previously or in the future, is or will be
genuine, true and correct and prepared in accordance with generally accepted
accounting principles, consistently applied, and no such financial information
omits or will omit any material facts necessary to make such information not
misleading;
d. All Accounts are and will, at all times pertinent hereto, be bona
fide existing obligations created by sale and delivery of merchandise or
rendition of services to customers in the ordinary course of business, free of
liens and security interests and unconditionally owed to Debtor without
defenses, disputes, offsets, counterclaims, rights of return or cancellation,
and Debtor has no knowledge of any fact, including, without limitation, any
imminent or threatened bankruptcy, insolvency, or financial embarrassment of any
account debtor, which would impair the validity or collectibility of any of the
Accounts or Instruments, and each obligor liable upon the Accounts or
Instruments has and will have capacity to contract;
e. Debtor shall keep Inventory at locations under its control.
f. Debtor's federal taxpayer number is 00-0000000;
g. The name of Debtor appearing in the first paragraph of this
Security Agreement is the true, complete and correct name of Debtor; and Debtor
conducts business only under the following trade names and styles:
Out-Takes
h. Debtor will not, without the prior written consent of Creditor
(which consent shall not be unreasonably withheld), sell, lease, or otherwise
dispose of, move or transfer, any of Debtor's assets, including, without
limitation, the Collateral, except in the ordinary course of business;
i. Debtor will not, without the prior written consent of Creditor
(which consent shall not be unreasonably withheld), change its name, business
structure, corporate identity or structure; add any new fictitious or trade
names; liquidate; merge or consolidate with or into any other business
organization;
j. Debtor will not, without the prior written consent of Creditor,
incur any debts outside the ordinary course of business, except renewals or
extensions of existing debts and interest thereon, nor make any advances or
loans except in the ordinary course of business as presently conducted;
k. Debtor does now keep and hereafter at all times shall keep and
furnish to Creditor on demand upon an Event of Default correct and accurate
records itemizing and describing the kind, type, quality and quantity of the
Inventory and Accounts, including, without limitation, the age and amount of
each account, the name and address of each account debtor, and the merchandise
giving rise to such account;
l. Inventory is not now and hereafter shall not be, without the
prior written consent of Creditor, stored with a bailee, warehouseman or similar
party, or in the event of such storage, Debtor will concurrently therewith cause
any such bailee, warehouseman or similar party to issue and deliver to Creditor,
in form and substance acceptable to Creditor, warehouse receipts in Creditor's
name evidencing the storage of such inventory;
m. There are no actions or proceedings pending by or against Debtor
or any guarantor of Debtor before any court or administrative agency, and Debtor
has no knowledge of any pending, threatened, or imminent litigation,
governmental investigations or claims, complaints, actions or prosecutions
involving Debtor or any guarantor of Debtor, except as heretofore specifically
disclosed in writing to Creditor or reflected in the Books.
n. The Debtor shall not allow any UCC-1 financing statement
whether now existing or hereafter filed to have priority over the
UCC-1 financing statement contemplated by the terms of the Settlement and
Mutual Release Agreement between the Debtor, the Creditor and Photo
Corporation Group Pty. Ltd. dated August __, 1996.
4. Until Creditor exercises its rights to collect proceeds and amounts
with respect to the Collateral, Debtor will collect with diligence any and all
proceeds with respect to the Collateral, at its own expense. Upon the occurrence
and continuance of any Event of Default, upon Creditor's written request, any
collection of proceeds with respect to the Collateral by Debtor, whether in the
form of cash, checks, notes or other instruments for the payment of money
(properly endorsed or assigned where required to enable Creditor to collect
same) or otherwise, shall be in trust for Creditor, and Debtor shall keep all
such collections separate and apart from all other funds and property so as to
be capable of identification as the property of Creditor and shall deliver them
together with the proceeds of all cash sales, daily to Creditor in the identical
form received.
5. Until Creditor exercises its rights to collect the Accounts, Inventory
and Instrument proceeds pursuant to Xxxxxxxxx 0, Xxxxxx may continue its
respective present policies with respect to returned merchandise and
adjustments. However upon an Event of Default and, upon request by Creditor,
Debtor shall immediately notify Creditor of all cases involving returns,
rejections, repossessions and loss or damage of or to merchandise represented by
the Accounts or Instruments or constituting Inventory and of any credits,
adjustments or disputes arising in connection with the goods or services
represented by the Accounts or Instruments or constituting Inventory in excess
of $5,000 and, in any of such events, Debtor will immediately pay to Creditor
from its own funds (and not from the proceeds of Accounts, Inventory or
Instruments) for application to any Obligation, the amount of any credit for
such returned or repossessed merchandise and adjustments made.
6. Anything herein to the contrary notwithstanding:
a. Debtor shall remain liable under the contracts and agreements
included in the Collateral to perform all of its duties and obligations
thereunder to the same extent as if this Security Agreement had not been
executed.
b. The exercise by Creditor of any of the rights hereunder shall
not release Debtor from any of its duties or obligations under the contracts
and agreements included in the Collateral; and
c. Creditor shall not have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this Security
Agreement, nor shall Creditor be obligated to perform any of the obligations or
duties of Debtor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
7. Debtor shall upon an Event of Default (i) permit representatives of
Creditor to inspect the Collateral and the respective Books and records relating
to the Collateral and make extracts therefrom at any reasonable time and to
arrange for verification of the Accounts, under reasonable procedures,
acceptable to Creditor, directly with the account debtors or otherwise at
Debtor's expense; (ii) promptly notify Creditor of any attachment or other legal
process levied against any of the Collateral and any information received by
Debtor relative to the Collateral, the account debtors or other persons
obligated in connection therewith, which may in any way affect the value of the
Collateral or the rights and remedies of Creditor in respect thereto; (iii)
reimburse Creditor upon demand for any and all legal costs, including reasonable
attorney's fees and accountants' fees, and other expenses incurred in collecting
any sums payable by Debtor under any Obligation secured hereby, enforcing any
term or provision of this Security Agreement or otherwise or in the checking,
handling and collection of the Collateral and the preparation and enforcement of
any agreement relating thereto, whether by nonjudicial or judicial action; (iv)
promptly notify Creditor of each location at which the Collateral is or will be
kept, other than for temporary processing, storage or similar purposes, and of
any removal thereof to a new location, including, without limitation, each
office of Debtor at which Books or records relating to the Accounts are kept;
(v) maintain policies of Insurance insuring the Collateral against loss or
damage by such risks and in such amounts and forms as are reasonably determined
prudent by the Debtor; (vi) do all acts necessary to maintain, preserve and
protect all Collateral, keep all Collateral in good condition and repair and
prevent any waste or unusual or unreasonable depreciation thereof; and (vii)
execute and deliver to Creditor further documents and instruments and such other
acts and things as Creditor may reasonably request in order to effectuate fully
the purpose and intent of this Security Agreement. In the event of a failure by
the Debtor so to do, the Debtor hereby irrevocably makes and appoints Creditor
(and any of Creditor's officers, employees, or agents) as Debtor's true and
lawful attorney-in-fact with power to sign on behalf of Debtor on any financing
statements, continuation statements, security agreement, mortgage, assignment,
certificate of title, affidavit, letter of authority, notice or similar document
which must be executed and/or filed in order to perfect or continue perfected
Creditor's security interest in the Collateral. Debtor hereby recognizes and
agrees that the power of attorney herein granted is coupled with an interest and
shall not be revocable until the Obligations are fully repaid at which time such
Power of Attorney shall immediately cease.
8. Creditor may at any time, without prior notice to Debtor, collect
proceeds and amounts in respect of the Collateral and may give notice of
assignment to any and all account debtors, and Debtor hereby irrevocably
constitutes and appoints Creditor (and any of Creditor's officers, employees or
agents) its irrevocable, true and lawful attorney-in-fact to enforce in Debtor's
name or in Creditor's name or otherwise all rights of Debtor in the Collateral
and to do any and all things necessary and proper to carry out the purpose of
this Security Agreement, provided, however, that Creditor may exercise said
collection rights and its rights and powers as said attorney-in-fact only upon
the occurrence and continuance of an Event of Default. Debtor hereby recognizes
and agrees that the power of attorney herein granted is coupled with an interest
and shall not be revocable until the Obligations are fully repaid at which time
such Power of Attorney shall immediately cease.
9. Any one or more of the following events shall constitute an Event
of Default under this Security Agreement;
a. If any representation, statement, report or certificate made
or delivered by Debtor or any of its officers, directors, employees, or
agents or any guarantor of Debtor to Creditor is not materially true and
correct;
b. If Debtor fails to pay when due and payable, or within seven (7)
calendar days of receipt of a written notice from the Creditor to the Debtor
detailing the amount payable and requesting payment, or otherwise fails to
perform when due, any of the Obligations;
c. If Debtor becomes insolvent or makes an assignment for the
benefit of creditors (whether with respect to Creditor or otherwise);
d. If any proceeding by or against Debtor or any guarantor of Debtor
is commenced under any bankruptcy, reorganization, arrangement, readjustment of
debt or moratorium law or statute, or for Debtor's dissolution or liquidation
and is not withdrawn or stayed within 28 days of commencement;
e. Other than in respect of those accounts payable referred to in
Appendix 1, if any writ of attachment, garnishment, execution or other legal
process is issued against any property of Debtor or any guarantor of the
Obligations and is not timely and diligently contested, provided that (i) such
contest is permitted by law, (ii) such contest has the effect of staying any
further action against any property of Debtor or any guarantor of the
Obligations, (iii) Debtor posts any security required by law which security
shall be reasonably satisfactory to Creditor, and (iv) said contest does not
subject Creditor to civil or criminal penalties;
f. Other than in respect of those accounts payable referred to in
Appendix 1, if any assessment is made against Debtor or any guarantor of Debtor
for any taxes, other than on real property, by any federal or state government,
or any department thereof, and is not timely and diligently contested, provided
that such contest is permitted by law, has the effect of staying any further
action against Debtor or any guarantor of the Obligations, Debtor posts any
security required by law which security shall be reasonably satisfactory to
Creditor, and said contest does not subject Creditor to civil or criminal
penalties;
g. If Debtor is enjoined, restrained or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs, and Debtor does not timely and diligently contest the same, provided
that (i) such contest is permitted by law, (ii) such contest has the effect of
staying any further action against the Debtor's business affairs, (iii) Debtor
posts any security required by law which security shall be reasonably
satisfactory to Creditor, and (iv) said contest does not subject Creditor to
civil or criminal penalties;
h. Other than in respect of those accounts payable referred to in
Appendix 1, if there is a default in any agreement between Debtor and third
parties and such third parties accelerate the maturity of any of Debtor's
indebtedness;
i. If Debtor makes any payment on account of indebtedness which has
been subordinated to Debtor's Obligations to Creditor other than pay accounts
payable arising in the ordinary course of business consistent with past
practices; and
j. Unless otherwise specified above in this Paragraph 9, if Debtor
otherwise fails or neglects to perform, keep or observe in any material respect,
any term, condition, agreement, warranty or representation contained in this
Security Agreement or any other presently existing or future agreement between
Debtor and Creditor, within twenty one (21) days after written notice from
Creditor of such failure or neglect.
10. Upon the occurrence of any Event of Default, Creditor may, at its
election, without notice of its election and without demand, do any one or more
of the following, successively or concurrently, all of which are authorized by
Debtor:
a. Declare all of Debtor's Obligations for payment of money, whether
evidenced by installment notes, demand notes or otherwise, immediately due and
payable.
b. Cease advancing money or extending credit to Debtor under any
agreement between Debtor and Creditor, and terminate any agreement for financial
accommodation to or for the benefit of Debtor.
c. Immediately or from time to time enter the premises where the
Collateral is located, take possession of all or any part of the Collateral,
wherever it may be found, using all necessary force to do so, and Debtor waives
all claims for damages due to or arising from or connected with any such taking.
d. Require Debtor to assemble the Collateral, or any part of it,
at a place designated by Creditor which is reasonably convenient to Debtor
and Creditor.
e. Pay, purchase, contest or compromise any encumbrance, charge or
lien which in the opinion of Creditor appears to be prior or superior to its
security interest and to pay all expenses incurred therewith. Any payment or
expense so incurred shall become part of Debtor's Obligations to Creditor,
payable on demand, and secured hereby.
f. Do such other acts as Creditor deems reasonable to protect its
interest in the Collateral, including, without limitation, repairing or
reconditioning, finishing, maintaining, preparing for sale, or storing such
Collateral. Any expenses thereof shall become part of Debtor's Obligations,
payable on demand, and secured hereby.
g. From time to time, by way of one or more contracts or
transactions, proceed in the foreclosure of Creditor's security interest and
sale of the Collateral or any part of it, in any manner permitted by law or
provided for herein.
h. Sell, lease, or otherwise dispose of the Collateral or any part
of it, with or without having the Collateral, or any part of it, at the place of
sale, upon terms and in such manner as Creditor may determine, and Creditor may
purchase same at any such sale. Any notice of sale, disposition or other
intended action sent to Debtor at least fourteen (14) days prior to such action
shall constitute reasonable notice.
i. Apply to a court of competent jurisdiction for appointment of
a receiver of Debtor to take possession of, operate, manage, maintain, and
preserve Debtor's business and assets for the benefit of Creditor;
j. Apply to a court of competent jurisdiction for a writ of
possession or attachment against any of Debtor's assets notwithstanding the
existence or value of any security for the Obligations.
k. Exercise any remedies of a secured party under the California
Commercial Code, and any other remedies available at law, in equity, or by
separate agreement with the Debtor.
11. If sufficient sums are not realized upon any disposition of the
Collateral to pay all Obligations to Creditor and any expenses, including
reasonable attorneys' fees, of such disposition, Debtor hereby promises to pay
immediately any resulting deficiency.
12. Creditor shall in no way or manner be liable or responsible for: (a)
the safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in value
thereof; or (d) any act of default of any carrier, warehouseman, bailee,
forwarding agency, or any other person whomsoever. All risk or loss, damage or
destruction of inventory shall be borne by Debtor.
13. No failure or delay on the part of Creditor in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law, in equity, or by separate agreement with Debtor.
14. No amendment, modification, termination, or waiver of any provision of
this Security Agreement nor consent to any departure by Debtor therefrom shall
in any event be effective unless the same shall be in writing and signed by
Creditor and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand on
Debtor in any case shall entitle Debtor to any other or further notice or demand
in similar or other circumstances.
15. All notices, requests, demands, directions and other communications
provided for hereunder shall be in writing and mailed, certified mail return
receipt requested, transmitted by telecopier, or personally delivered, as
elected by the party giving such notice, to the applicable party at the address
indicated below:
If to Debtor:
Out-Takes, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier Number: (000) 000-0000
Attn: President
And with a copy to:
Xx. Xxxxxx X. Xxxx
Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier Number: (000) 000-0000
If to Creditor:
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx
00 Xxx Xxxxx,
Xxx. X-000, Xxxxxx, Xxxxxxxxxx 00000
Telecopier Number: (000) 000-0000
and with a copy to:
Xxxxxxx X. Xxxxx
Xxxxxx Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier Number: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Paragraph. All such notices, requests, demands, directions and other
communications shall be effective (i), when mailed, five (5) days after being
deposited in the mails addressed as aforesaid with postage prepaid, (ii) when
delivered personally, upon delivery pursuant to this Paragraph, or (iii) on the
next business day after transmission if transmitted by telecopier (and
appropriate answerbacks have been received).
16. Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
17. Debtor waives the right to plead the statute of limitations as a
defense to any and all obligations contained in this Security Agreement or
secured by it to the full extent permissible by law. Time and exactitude of each
of the terms, obligations, covenants and conditions are declared to be of the
essence of this Security Agreement.
18. This Security Agreement shall take effect immediately upon the
execution by Debtor, and the execution hereof by Creditor shall not be required
as a condition to the effectiveness of this Security Agreement. The provision
for execution of this Security Agreement by Creditor is only for purposes of
filing a Memorandum of this Security Agreement under the Uniform Commercial
Code, if execution hereof by Creditor is required for purposes of such filing.
19. Nothing herein shall in any way limit the effect of the conditions set
forth in any other security or other agreement executed by Debtor, but each and
every condition hereof shall be in addition thereof.
20. This Security Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties. Creditor may assign
this Security Agreement and its rights and duties hereunder without prior notice
to or consent of the Debtor.
21. DEBTOR AND CREDITOR HEREBY AGREE TO WAIVE THEIR RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY
AGREEMENT. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this Security Agreement, including, without limitation, contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Debtor and Creditor each acknowledge that this waiver is a
material inducement to enter into a business relationship, that each has already
relied on the waiver in entering into this Security Agreement and that each will
continue to rely on the waiver in their related future dealings. Debtor and
Creditor further warrant and represent that each has reviewed this waiver with
its legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS SECURITY AGREEMENT. In the event of litigation, this Security Agreement
may be filed as a written consent to a trial by the court.
22. This Security Agreement is and shall be governed by and construed in
accordance with the laws of the state of California, except to the extent that
the validity or perfection of the security interests hereunder or remedies
hereunder in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the state of California.
23. Creditor and Debtor agree to file any action arising out of, or
relating to, this Security Agreement with the Superior Court of the State of
California for the County of Los Angeles, Central District (the "Court") and
waive all objections to personal jurisdiction and venue of the Court for such
purposes, except that Creditor and Debtor may file any action relating to the
disposition of any Collateral located beyond the territorial jurisdiction of the
Court with any court of competent jurisdiction.
24. Debtor hereby consents to service of process in any action, wherever
filed, arising out of, or relating to, this Security Agreement by first class
United States mail, postage prepaid, to the address of Debtor set forth in, or
that which Debtor designates pursuant to, Paragraph 15 of this Security
Agreement.
25. In the event either party files an action to enforce or interpret the
terms of this Security Agreement, the prevailing party shall be entitled to
receive its reasonable attorneys' fees and costs from the losing party.
IN WITNESS WHEREOF, the parties have executed this Security Agreement,
effective as of the date first written above.
==============================================================================
DEBTOR:
==============================================================================
Out-Takes, Inc.
By:
Name:
Title:
CREDITOR:
Xxxxxx X. Xxxxxxx and
Xxxx X. Xxxxxxxx-Xxxxxxx
----------------- --------------
================================================================================
APPENDIX 1
================================================================================
Nil
===============================================================================
================================================================================
ATTACHMENT TO UCC-1 FINANCING STATEMENT
Debtor's Name: OUT-TAKES, INC.
Continuation of Item 6: DESCRIPTION OF COLLATERAL
This financing statement covers all right, title and interest in, to and
under the following, in each case whether now or hereafter existing and whether
now owned or hereafter acquired and regardless of where located (all of which
being hereinafter collectively called the "Collateral"):
Inventory, Accounts, Documents, Equipment, Deposit Accounts,
Instruments, Fixtures, Chattel Paper, Other Property, and goods and commodities,
whether now held or hereafter acquired (including all returns, rejections and
repossessions and whether raw materials, work in progress, or materials used or
consumed in Debtor's business), whether or not such be in the actual or
constructive possession of Debtor, and together with all proceeds arising from
any of the foregoing, and all Insurance proceeds of any and all of the
foregoing.
As used herein, the following terms shall have the following meanings.
Terms not otherwise defined herein shall have the meanings ascribed to them, if
any, under the California Commercial Code.
a. "Accounts" shall mean any and all rights now existing or hereafter
arising to payment for merchandise, goods, or commodities sold or leased or to
be sold or leased or for services rendered or to be rendered, no matter how
evidenced, including accounts, accounts receivable, general intangibles,
instruments, documents, purchase orders, notes, drafts, acceptances, chattel
paper and other forms of obligations owing to Debtor, all guaranties and
security therefor, all merchandise, goods, or commodities returned to or
reclaimed by Debtor and all of Debtor's Books (as that term is defined below)
relating to any of the foregoing.
b. "Books" shall mean all of Debtor's books and records,
including, without limitation: ledgers; records indicating, summarizing, or
evidencing Debtor's assets, Accounts, business operations or financial
condition; computer programs; computer discs or tape files; computer runs and
other computer printouts; and any other computer prepared information of any
kind.
==============================================================================
===============================================================================
-54-
c. "Chattel Paper" shall mean a writing or writings of whatever
sort which evidence a monetary obligation and a security
interest in or lease of specific goods.
d. "Collateral" shall mean those items in which a security
interest is granted hereunder pursuant to Paragraph 2 of
the Security Agreement.
e. "Deposit Accounts" shall mean any demand, time, savings,
passbook or like accounts maintained with a bank, savings and loan association,
credit union or like organization and any renewals, extensions and/or
replacements thereof, and all proceeds and accretions, including, without
limitation, interest and other property at any time and from time to time
receivable or otherwise entitled to be received on account thereof.
f. "Documents" shall mean any and all documents of title, bills of
lading, dock warrants, dock receipts, and warehouse receipts and shall include,
without limitation, other documents which purport to be issued by a bailee and
purport to cover goods in the bailee's possession which are either identified or
are fungible portions of an identified mass.
g. "Equipment" shall mean any and all things moveable or which are
fixtures which are used or bought for use primarily in the business of Debtor,
wherever located, now or hereafter existing, including, but not limited to all
software applications, photography rigs, computer network systems, computer
hardware, printers, and office furniture and all parts thereof and all additions
and accessions thereto and replacements thereof,
h. "Fixtures" shall mean all plant fixtures, business fixtures,
and other fixtures and storage, office facilities, wherever located, now or
hereafter existing, and all additions and accessions thereto and replacements
therefor and products thereof.
i. "Instruments" shall mean any and all negotiable
instruments, securities (certificated and uncertificated) and every other
writing which evidences a right to the payment of money.
j. "Insurance" shall mean any and all policies of Insurance
and the proceeds thereof on or covering any or all of the Collateral.
k. "Inventory" shall mean any and all of Debtor's goods,
merchandise and other personal property, wherever located, now or hereafter
existing, including, without limitation, those held for display or demonstration
or out on lease or consignment or to be furnished under a contract of service or
are raw materials, work in process, finished materials, or materials used or
consumed, or to be used or consumed, in Debtor's business, and shall include,
without limitation, all packing and shipping materials, wherever located; and
all other items hereafter acquired by Debtor by way of substitution,
replacement, return, repossession or otherwise, and all additions and accessions
thereto, and the resulting product or mass, and any documents of title
representing any of the above.
l. "Obligations" shall mean any and all liabilities, debts,
and obligations of Debtor to Creditor pursuant to clauses 2 and 3 of the
Settlement and Mutual Release Agreement between the Debtor, the
Creditor and Photo Corporation Group Pty. Ltd. dated August __, 1996.
m. "Other Property" shall mean all of Debtor's personal property
other than Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment,
Instruments and Inventory, including, without limitation, patents, service
marks, copyrights, proprietary rights, and general intangibles.
SECOND SCHEDULE
(OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION)
============================================================================
================================================================================
THIRD SCHEDULE
------------------------------------------------------------------------------
Payment Date _________________________ _________________________
Contract Obligations Discounts Obligations
-------------------------------------------------------------------------------
----- --------------------------------------------------------------------------
Contractual Pmt (Excludes benefit of discount available if there RHS LRS
Date Due # has been no Default) 15.1020% 16.7365% Total Cum Total
RHS LRS Total CUM TOTAL
--------------------------------------------------------------------------------
6-Sep-96 1 29,447.10 18,015.10 47,462.20 47,462.20 25,000.00 15,000.00 40,000.00 40,000.00
20-Sep-96 2 5,698.31 3,641.75 9,340.06 56,802.26 4,837.75 3,032.25 7,870.00 47,870.00
4-Oct-96 3 5,698.31 3,641.75 9,340.06 66,142.32 4,837.75 3,032.25 7,870.00 55,740.00
18-Oct-96 4 5,698.31 3,641.75 9,340.06 75,482.38 4,837.75 3,032.25 7,870.00 63,610.00
1-Nov-96 5 5,698.31 3,641.75 9,340.06 84,822.44 4,837.75 3,032.25 7,870.00 71,480.00
15-Nov-96 6 5,698.31 3,641.75 9,340.06 94,162.50 4,837.75 3,032.25 7,870.00 79,350.00
29-Nov-96 7 5,698.31 3,641.75 9,340.06 103,502.56 4,837.75 3,032.25 7,870.00 87,220.00
13-Dec-96 8 5,698.31 3,641.75 9,340.06 112,842.62 4,837.75 3,032.25 7,870.00 95,090.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
27-Dec-96 9 5,698.31 3,641.75 9,340.06 122,182.68 4,837.75 3,032.25 7,870.00 102,960.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
10-Jan-97 10 9,776.44 6,245.23 16,021.67 138,204.35 8,300.00 5,200.00 13,500.00 116,460.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
24-Jan-97 11 9,776.44 6,245.23 16,021.67 154,226.02 8,300.00 5,200.00 13,500.00 129,960.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
7-Feb-97 12 3,332.23 2,145.00 5,477.23 159,703.25 2,829.00 1,786.00 4,615.00 134,575.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
21-Feb-97 13 3,332.23 2,145.00 5,477.23 165,180.49 2,829.00 1,786.00 4,615.00 139,190.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
7-Mar-97 14 3,332.23 2,145.00 5,477.23 170,657.72 2,829.00 1,786.00 4,615.00 143,805.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
21-Mar-97 15 3,332.23 2,145.00 5,477.23 176,134.95 2,829.00 1,786.00 4,615.00 148,420.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
4-Apr-97 16 3,332.23 2,145.00 5,477.23 181,612.18 2,829.00 1,786.00 4,615.00 153,035.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
18-Apr-97 17 3,332.23 2,145.00 5,477.23 187,089.41 2,829.00 1,786.00 4,615.00 157,650.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
2-May-97 18 3,332.23 2,145.00 5,477.23 192,566.64 2,829.00 1,786.00 4,615.00 162,265.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
16-May-97 19 3,332.23 2,145.00 5,477.23 198,043.87 2,829.00 1,786.00 4,615.00 166,880.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
30-May-97 20 3,332.23 2,145.00 5,477.23 203,521.11 2,829.00 1,786.00 4,615.00 171,495.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
13-Jun-97 21 3,332.23 2,145.00 5,477.23 208,998.34 2,829.00 1,786.00 4,615.00 176,110.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
27-Jun-97 22 3,332.23 2,145.00 5,477.23 214,475.57 2,829.00 1,786.00 4,615.00 180,725.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
11-Jul-97 23 3,332.23 2,145.00 5,477.23 219,952.80 2,829.00 1,786.00 4,615.00 185,340.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
-56-
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Payment Date Contract Discounted
Obligations Obligations
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Contractual Pmt (Excludes benefit of discount available if there RHS LRS
Date Due # has been no Default 15.0000% 15.0000% Total Cum Total
RHS LRS Total CUM TOTAL
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
25-Jul-97 24 3,332.23 2,145.00 5,477.23 225,430.03 2,829.00 1,786.00 4,615.00 189,955.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
8-Aug-97 25 3,332.23 2,145.00 5,477.23 230,907.26 2,829.00 1,786.00 4,615.00 194,570.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
22-Aug-97 26 3,332.23 2,145.00 5,477.23 236,384.50 2,829.00 1,786.00 4,615.00 199,185.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
5-Sep-97 27 3,332.23 2,145.00 5,477.23 241,861.73 2,829.00 1,786.00 4,615.00 203,800.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
19-Sep-97 28 3,332.23 2,145.00 5,477.23 247,338.96 2,829.00 1,786.00 4,615.00 208,415.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
3-Oct-97 29 3,332.23 2,145.00 5,477.23 252,816.19 2,829.00 1,786.00 4,615.00 213,030.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
17-Oct-97 30 3,332.23 2,145.00 5,477.23 258,293.42 2,829.00 1,786.00 4,615.00 217,645.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
31-Oct-97 31 3,332.23 2,145.00 5,477.23 263,770.65 2,829.00 1,786.00 4,615.00 222,260.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
14-Nov-97 32 3,332.23 2,145.00 5,477.23 269,247.88 2,829.00 1,786.00 4,615.00 226,875.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
28-Nov-97 33 3,332.23 2,145.00 5,477.23 274,725.12 2,829.00 1,786.00 4,615.00 231,490.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
12-Dec-97 34 3,332.23 2,145.00 5,477.23 280,202.35 2,829.00 1,786.00 4,615.00 236,105.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
26-Dec-97 35 3,332.23 2,145.00 5,477.23 285,679.58 2,829.00 1,786.00 4,615.00 240,720.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
9-Jan-98 36 3,332.23 2,145.00 5,477.23 291,156.81 2,829.00 1,786.00 4,615.00 245,335.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
23-Jan-98 37 3,332.23 2,145.00 5,477.23 296,634.04 2,829.00 1,786.00 4,615.00 249,950.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
6-Feb-98 38 3,332.23 2,145.00 5,477.23 302,111.27 2,829.00 1,786.00 4,615.00 254,565.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
20-Feb-98 39 3,332.23 2,145.00 5,477.23 307,588.50 2,829.00 1,786.00 4,615.00 259,180.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
6-Mar-98 40 3,332.23 2,145.00 5,477.23 313,065.74 2,829.00 1,786.00 4,615.00 263,795.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
20-Mar-98 41 3,332.23 2,145.00 5,477.23 318,542.97 2,829.00 1,786.00 4,615.00 268,410.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
3-Apr-98 42 3,332.23 2,145.00 5,477.23 324,020.20 2,829.00 1,786.00 4,615.00 273,025.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
17-Apr-98 43 769.16 833.50 1,602.66 325,622.86 653.00 694.00 1,347.00 274,372.00
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Total of 198,654.86 126,968.00 325,622.86 168,654.00 105,718.00 274,372.00
Above
------------------------------------------------------------------------------------------------------------------
NOTE: All amounts shown exclude interest and payroll tax withholdings, which will be computed as provided for in the
Settlement Agreement.
------------------------------------------------------------------------------------------------------------------------------
-
------------------------------------------------------------------------------------------------------------------------------
THIRD SCHEDULE
----------------------------------------------------------------------------------------------------------
Payment Date Contract Obligations (Required if any payment is ever in default)
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
(Excludes benefit of discount available Total
Contractual Pmt if there has been no Default) Withholdings Interest Interest Anticipated
Date Due # Tax @ at Payment Payment
35% 8.25%
-------------------------------------------
-------------------------------------------
RHS LRS Pre-Tax Cum Total
Total
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
6-Sep-96 1 29,447.10 18,015.10 47,462.20 47,462.20 16,611.77 204.33 204.33 31,054.76
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
20-Sep-96 2 5,698.31 3,641.75 9,340.06 56,802.26 3,269.02 552.92 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
4-Oct-96 3 5,698.31 3,641.75 9,340.06 66,142.32 3,269.02 533.71 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
18-Oct-96 4 5,698.31 3,641.75 9,340.06 75,482.38 3,269.02 514.50 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
1-Nov-96 5 5,698.31 3,641.75 9,340.06 84,822.44 3,269.02 495.29 2,096.43 8,167.47
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
15-Nov-96 6 5,698.31 3,641.75 9,340.06 94,162.50 3,269.02 476.08 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
29-Nov-96 7 5,698.31 3,641.75 9,340.06 103,502.56 3,269.02 456.87 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
13-Dec-96 8 5,698.31 3,641.75 9,340.06 112,842.62 3,269.02 437.66 6,071.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
27-Dec-96 9 5,698.31 3,641.75 9,340.06 122,182.68 3,269.02 418.45 1,789.05 7,860.09
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
10-Jan-97 10 9,776.44 6,245.23 16,021.67 138,204.35 5,607.58 385.49 10,414.09
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
24-Jan-97 11 9,776.44 6,245.23 16,021.67 154,226.02 5,607.58 352.54 10,414.09
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
7-Feb-97 12 3,332.23 2,145.00 5,477.23 159,703.25 1,917.03 341.27 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
21-Feb-97 13 3,332.23 2,145.00 5,477.23 165,180.49 1,917.03 330.01 1,409.31 4,969.51
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
7-Mar-97 14 3,332.23 2,145.00 5,477.23 170,657.72 1,917.03 318.74 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
21-Mar-97 15 3,332.23 2,145.00 5,477.23 176,134.95 1,917.03 307.47 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
4-Apr-97 16 3,332.23 2,145.00 5,477.23 181,612.18 1,917.03 296.21 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
18-Apr-97 17 3,332.23 2,145.00 5,477.23 187,089.41 1,917.03 284.94 1,207.36 4,767.57
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
2-May-97 18 3,332.23 2,145.00 5,477.23 192,566.64 1,917.03 273.68 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
16-May-97 19 3,332.23 2,145.00 5,477.23 198,043.87 1,917.03 262.41 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
30-May-97 20 3,332.23 2,145.00 5,477.23 203,521.11 1,917.03 251.14 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
13-Jun-97 21 3,332.23 2,145.00 5,477.23 208,998.34 1,917.03 239.88 1,027.11 4,587.31
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Payment Date
Contract Obligations (continued from previous page)
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
(Excludes benefit of discount available Total
Contractual Pmt if there has been no Default) Withholdings Interest Interest Anticipated
Date Due # Tax @ at Payment Payment
35% 8.25%
-------------------------------------------
-------------------------------------------
RHS LRS Pre-Tax Cum Total
Total
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
27-Jun-97 22 3,332.23 2,145.00 5,477.23 214,475.57 1,917.03 228.61 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
11-Jul-97 23 3,332.23 2,145.00 5,477.23 219,952.80 1,917.03 217.35 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
25-Jul-97 24 3,332.23 2,145.00 5,477.23 225,430.03 1,917.03 206.08 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
8-Aug-97 25 3,332.23 2,145.00 5,477.23 230,907.26 1,917.03 194.82 846.86 4,407.06
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
22-Aug-97 26 3,332.23 2,145.00 5,477.23 236,384.50 1,917.03 183.55 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
5-Sep-97 27 3,332.23 2,145.00 5,477.23 241,861.73 1,917.03 172.28 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
19-Sep-97 28 3,332.23 2,145.00 5,477.23 247,338.96 1,917.03 161.02 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
3-Oct-97 29 3,332.23 2,145.00 5,477.23 252,816.19 1,917.03 149.75 666.60 4,226.80
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
17-Oct-97 30 3,332.23 2,145.00 5,477.23 258,293.42 1,917.03 138.49 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
31-Oct-97 31 3,332.23 2,145.00 5,477.23 263,770.65 1,917.03 127.22 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
14-Nov-97 32 3,332.23 2,145.00 5,477.23 269,247.88 1,917.03 115.95 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
28-Nov-97 33 3,332.23 2,145.00 5,477.23 274,725.12 1,917.03 104.69 486.35 4,046.55
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
12-Dec-97 34 3,332.23 2,145.00 5,477.23 280,202.35 1,917.03 93.42 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
26-Dec-97 35 3,332.23 2,145.00 5,477.23 285,679.58 1,917.03 82.16 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
9-Jan-98 36 3,332.23 2,145.00 5,477.23 291,156.81 1,917.03 70.89 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
23-Jan-98 37 3,332.23 2,145.00 5,477.23 296,634.04 1,917.03 59.63 306.10 3,866.30
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
6-Feb-98 38 3,332.23 2,145.00 5,477.23 302,111.27 1,917.03 48.36 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
20-Feb-98 39 3,332.23 2,145.00 5,477.23 307,588.50 1,917.03 37.09 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
6-Mar-98 40 3,332.23 2,145.00 5,477.23 313,065.74 1,917.03 25.83 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
20-Mar-98 41 3,332.23 2,145.00 5,477.23 318,542.97 1,917.03 14.56 125.84 3,686.04
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
3-Apr-98 42 3,332.23 2,145.00 5,477.23 324,020.20 1,917.03 3.30 3,560.20
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
17-Apr-98 43
769.16 833.50 1,602.66 325,622.86 560.93 0.0 1045.02
0.00
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Total of 198,654.86 126,968.00 325,622.86 113,968.00 10,168.64 10,168.64 221,823.50
Above
----------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Payment Date Discounted Obligations (Applicable so long as payments are made in a
timely manner)
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Contractual Pmt RHS LRS WithholdingsInterest Interest Total
Date Due # 15.1020% 16.7365% Total Cum Total Tax @ 35% at Payment Anticipated
8.25% Payment
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
6-Sep-96 1 25,000.00 15,000.00 40,000.00 40,000.00 14,000.00 172.17 172.17 26,172.17
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
20-Sep-96 2 4,837.75 3,032.25 7,870.00 47,870.00 2,754.50 465.88 5,115.50
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
4-Oct-96 3 3,032.25 7,870.00 2,754.50 5,115.50
4,837.75 55,740.00 449.69
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
18-Oct-96 4 3,032.25 7,870.00 2,754.50 5,115.50
4,837.75 63,610.00 433.51
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
1-Nov-96 5 3,032.25 7,870.00 2,754.50 1,766.40 6,881.90
4,837.75 71,480.00 417.32
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
15-Nov-96 6 3,032.25 7,870.00 2,754.50 5,115.50
4,837.75 79,350.00 401.13
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
29-Nov-96 7 3,032.25 7,870.00 2,754.50 5,115.50
4,837.75 87,220.00 384.94
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
13-Dec-96 8 3,032.25 7,870.00 2,754.50 5,115.50
4,837.75 95,090.00 368.76
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
27-Dec-96 9 3,032.25 7,870.00 102,960.00 2,754.50 1,507.40 6,622.90
4,837.75 352.57
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
10-Jan-97 10 5,200.00 13,500.00 116,460.00 4,725.00 8,775.00
8,300.00 324.80
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
24-Jan-97 11 5,200.00 13,500.00 129,960.00 4,725.00 8,775.00
8,300.00 297.03
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
7-Feb-97 12 1,786.00 4,615.00 134,575.00 1,615.25 2,999.75
2,829.00 287.54
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
21-Feb-97 13 1,786.00 4,615.00 139,190.00 1,615.25 1,187.43 4,187.18
2,829.00 278.05
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
7-Mar-97 14 1,786.00 4,615.00 143,805.00 1,615.25 2,999.75
2,829.00 268.56
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
21-Mar-97 15 1,786.00 4,615.00 148,420.00 1,615.25 2,999.75
2,829.00 259.06
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
4-Apr-97 16 1,786.00 4,615.00 153,035.00 1,615.25 2,999.75
2,829.00 249.57
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
18-Apr-97 17 1,786.00 4,615.00 157,650.00 1,615.25 1,017.27 4,017.02
2,829.00 240.08
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
2-May-97 18 1,786.00 4,615.00 162,265.00 1,615.25 2,999.75
2,829.00 230.59
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
16-May-97 19 1,786.00 4,615.00 166,880.00 1,615.25 2,999.75
2,829.00 221.09
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
30-May-97 20 1,786.00 4,615.00 171,495.00 1,615.25 2,999.75
2,829.00 211.60
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
13-Jun-97 21 1,786.00 4,615.00 176,110.00 1,615.25 865.39 3,865.14
2,829.00 202.11
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
27-Jun-97 22 1,786.00 4,615.00 180,725.00 1,615.25 2,999.75
2,829.00 192.62
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
11-Jul-97 23 1,786.00 4,615.00 185,340.00 1,615.25 2,999.75
2,829.00 183.13
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Payment Date Discounted Obligations (continued from previous page)
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Contractual Pmt RHS LRS WithholdingsInterest Interest Total
Date Due # 15.1020% 16.7365% Total Cum Total Tax @ 35% at Payment Anticipated
8.25% Payment
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
25-Jul-97 24 1,786.00 4,615.00 189,955.00 1,615.25 2,999.75
2,829.00 173.63
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
8-Aug-97 25 1,786.00 4,615.00 194,570.00 1,615.25 713.52 3,713.27
2,829.00 164.14
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
22-Aug-97 26 1,786.00 4,615.00 199,185.00 1,615.25 2,999.75
2,829.00 154.65
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
5-Sep-97 27 1,786.00 4,615.00 203,800.00 1,615.25 2,999.75
2,829.00 145.16
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
19-Sep-97 28 1,786.00 4,615.00 208,415.00 1,615.25 2,999.75
2,829.00 135.66
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
3-Oct-97 29 1,786.00 4,615.00 213,030.00 1,615.25 561.64 3,561.39
2,829.00 126.17
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
17-Oct-97 30 1,786.00 4,615.00 217,645.00 1,615.25 2,999.75
2,829.00 116.68
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
31-Oct-97 31 1,786.00 4,615.00 222,260.00 1,615.25 2,999.75
2,829.00 107.19
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
14-Nov-97 32 1,786.00 4,615.00 226,875.00 1,615.25 2,999.75
2,829.00 97.69
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
28-Nov-97 33 1,786.00 4,615.00 231,490.00 1,615.25 409.76 3,409.51
2,829.00 88.20
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
12-Dec-97 34 1,786.00 4,615.00 236,105.00 1,615.25 2,999.75
2,829.00 78.71
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
26-Dec-97 35 1,786.00 4,615.00 240,720.00 1,615.25 2,999.75
2,829.00 69.22
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
9-Jan-98 36 1,786.00 4,615.00 245,335.00 1,615.25 2,999.75
2,829.00 59.72
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
23-Jan-98 37 1,786.00 4,615.00 249,950.00 1,615.25 257.88 3,257.63
2,829.00 50.23
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
6-Feb-98 38 1,786.00 4,615.00 254,565.00 1,615.25 2,999.75
2,829.00 40.74
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
20-Feb-98 39 1,786.00 4,615.00 259,180.00 1,615.25 2,999.75
2,829.00 31.25
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
6-Mar-98 40 1,786.00 4,615.00 263,795.00 1,615.25 2,999.75
2,829.00 21.76
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
20-Mar-98 41 1,786.00 4,615.00 268,410.00 1,615.25 106.01 3,105.76
2,829.00 12.26
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
3-Apr-98 42 1,786.00 4,615.00 273,025.00 1,615.25 2,999.75
2,829.00 2.77
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
17-Apr-98 43 694.00 1,347.00 274,372.00 471.45 2.77 878.32
653.00 0.00
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Total of 168,654.00 105,718.00 274,372.00 96,030.20 8,567.63 8,567.63 186,909.43
Above
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