STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the 30th day of December, 1996, by and between Xxxxxx Xxxxxx Xxxxxxxx
("Seller") and Cinergi Pictures Entertainment Inc., a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, pursuant to that certain Stock Sale and Repurchase Agreement
("Stock Agreement") dated as of January 1, 1994 by and between Purchaser and
Seller, Seller acquired six shares of the Purchaser's common stock;
WHEREAS, Seller paid for such shares by paying an amount in cash equal to
the aggregate par value of such shares and by issuing to Purchaser a Secured
Recourse Promissory Note (the "Old Note") in the principal amount of $450,000,
bearing interest at the rate of 6% per annum and secured in accordance with that
certain Security and Stock Pledge Agreement, dated as of January 1, 1994, by and
between Purchaser and Seller (the "Old Security Agreement");
WHEREAS, pursuant to a subsequent stock split (the "Stock Split"), the six
shares of Purchaser's common stock acquired by Seller were converted into
372,341 shares of Purchaser's common stock (the "Shares"), which continue to be
owned by Seller;
WHEREAS, Seller retired a portion of the Old Note by issuing a full
recourse note (the "New Note"; the Old Note and the New Note being sometimes
collectively referred to herein as the "Notes") in the principal amount of
$242,000, bearing interest at the rate of 6% per annum and secured in accordance
with that certain Security and Pledge Agreement, dated as of February 28, 1995,
by and between Purchaser and Seller which granted to Purchaser a security
interest in certain marketable securities (the "New Security Agreement");
WHEREAS, after the issuance of the New Note, the Old Security Agreement
only applied to 186,170 of the Shares;
WHEREAS, Seller resigned her employment with the Purchaser on August 15,
1996;
WHEREAS, pursuant to Section 4(a)(i) of the Stock Agreement, any non-vested
Shares (as described therein) are to be repurchased by the Purchaser if Seller
ceases to be employed by the Purchaser at the price originally paid ($1.20856953
per share after giving effect to the Stock Split) and such price is to be paid
by first applying such price to the balance due under the Notes;
WHEREAS, at the date of Seller's resignation, 51,714 Shares were not
considered vested; and
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WHEREAS, Seller desires to sell, and Purchaser desires to purchase all of
the Shares on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the representations, warranties, conditions and promises
hereinafter contained, the parties hereto hereby agree as follows:
A G R E E M E N T:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions set
forth herein, at the Closing (as hereinafter defined) Seller shall sell the
Shares to the Purchaser free and clear of all encumbrances (other than the
security interest granted to Purchaser pursuant to the Old Security Agreement),
and Purchaser shall purchase all of the Shares.
1.2 PURCHASE PRICE. Subject to and on the terms and conditions of this
Agreement, Purchaser shall pay Seller as follows:
1.2.1 NON-VESTED SHARES. Pursuant to Section 4(a)(i) of the Stock
Agreement, Purchaser shall pay to Seller for the purchase of 51,714 of the
Shares (constituting the non-vested Shares), the purchase price of $62,500. In
accordance with the Stock Agreement, such amount shall be paid by reducing the
balance due under the Notes.
1.2.2 VESTED SHARES. Purchaser shall pay to Seller for the
purchase of 320,627 of the Shares (constituting all of the Shares other than the
non-vested Shares), the purchase price of $468,426 (which constitutes the total
remaining amount due, principal and all accrued interest, under the Notes after
the reduction set forth in Section 1.2.1). Purchaser and Seller agree that such
purchase price shall be paid by delivering the Notes (marked canceled) to Seller
in exchange for the applicable Shares.
Collectively, the amounts due under Sections 1.2.1 and 1.2.2 shall be
referred to herein as the "Purchase Price", and payment of the Purchase Price in
accordance with Sections 1.2.1 and 1.2.2 shall constitute full consideration for
the sale of the Shares to Purchaser.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this Agreement, Seller
hereby makes the following representations and warranties to Purchaser, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date (as hereinafter defined).
2.1 OWNERSHIP. Seller is the record and beneficial owner of all of the
Shares and has good and marketable title to the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement).
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2.2 AUTHORIZATION AND ENFORCEABILITY.
(a) This Agreement (and all other documents, instruments and
agreements executed in connection herewith by Seller) has been duly executed and
delivered by Seller. This Agreement and all other documents, instruments and
agreements executed by Seller in connection herewith constitute Seller's legally
valid and binding agreements, enforceable against Seller in accordance with
their respective terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforceability of creditors' rights generally, or by
general equitable principles.
(b) Seller has the full and unqualified legal right, power and
authority to sell, transfer, assign and convey to Purchaser complete and
absolute legal and equitable title to all of the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement). On the Closing Date, upon consummation of the
transactions contemplated hereby, the Purchaser will acquire complete and
absolute legal, equitable, good, valid and marketable title to all of the
Shares, free and clear of all encumbrances.
2.3 NO VIOLATIONS. The execution, delivery and other performance by
Seller of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Seller of the
transactions contemplated hereby, do not and will not (i) constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) any provision of any material contract to which Seller is a party or by
which it may be bound; or (ii) result in the creation or imposition of any
encumbrance upon, or give to any third person any interest in or right to, any
of the Shares.
2.4 BROKERS. There is no person acting on behalf of Seller who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
2.5 ACCREDITED INVESTOR; INVESTOR KNOWLEDGE. Seller represents that she
is an "accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act of 1933, as amended. Seller represents that, by reason of her
business and financial experience, she has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risk of the sale of Shares contemplated by this Agreement.
2.6 ACCESS TO INFORMATION. Seller acknowledges that she has received all
the information that she has requested from Purchaser about Purchaser in order
to make an informed decision with respect to her sale of the Shares. Seller
represents and warrants that she and her accountants, counsel, financial
advisers and other representatives have been given reasonable access to all
relevant information and records of Purchaser and that she has been given
adequate opportunities to obtain any additional information and documents
relating to the sale of the Shares and to ask questions and receive answers
about all of the foregoing.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to Seller to enter into this Agreement, Purchaser
hereby makes the following representations and warranties to Seller, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date.
3.1 BROKERS. There is no person acting on behalf of Purchaser who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
3.2 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement (and all other documents, instruments and
agreements executed in connection herewith) by Purchaser has been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement and all other documents, instruments and agreements executed by
Purchaser in connection herewith constitute its valid and legally binding
agreements, enforceable against Purchaser in accordance with their respective
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforceability of creditors' rights generally, or by general
equitable principles.
3.3 NO VIOLATIONS. The execution, delivery and other performance by
Purchaser of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Purchaser of the
transactions contemplated hereby, do not and will not constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) its Certificate of Incorporation or Bylaws.
ARTICLE IV
CLOSING; OBLIGATIONS AT CLOSING
4.1 CLOSING. The closing for the consummation of the transactions
contemplated by this Agreement (the "Closing") shall occur at such date
("Closing Date") and time as may be mutually agreed upon by the parties;
provided, however, that the Closing shall take place on the date of this
Agreement or within fifteen (15) days thereafter, unless the parties shall
otherwise agree.
4.2 OBLIGATIONS AT CLOSING.
4.2.1 SELLER'S OBLIGATIONS. Seller shall deliver to Purchaser at
the Closing the following:
(a) Stock Certificate No. 2005 (the "Stock Certificate")
representing all of the Shares with a separate stock assignment executed in
blank, in form reasonably acceptable to the Purchaser, together with any
documentary stamps required in connection with such transfer or such other
appropriate documents and instruments of transfer as Purchaser may
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reasonably request. Purchaser hereby acknowledges that, pursuant to the
Security Agreement, it currently holds the Stock Certificate.
(b) All other agreements, certificates, instruments and
documents reasonably requested by Purchaser in order to fully consummate the
transactions contemplated hereby and carry out the purposes and intent of this
Agreement.
4.2.2 PURCHASER'S OBLIGATIONS TO SELLER AT CLOSING. Purchaser
shall deliver to Seller at the Closing the following:
(a) The Notes each marked canceled, which shall constitute
payment in full of the Purchase Price.
(b) A release of the security interest which had been granted
pursuant to the New Security Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 CONDITIONS PRECEDENT. The obligations of the Purchaser and the Seller
under this Agreement are subject to the satisfaction on or before the Closing
Date of the following conditions:
5.1.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Seller and Purchaser herein shall be true and correct on and
as of the Closing Date and shall not have been false or misleading in any manner
on the date hereof.
5.1.2 PERFORMANCE OF TERMS AND CONDITIONS. All of the terms and
conditions of this Agreement to be satisfied or performed by Seller and
Purchaser on or before the Closing, including the deliveries required to be made
at Closing, shall have been satisfied or performed.
5.1.3 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments and other documents delivered or in accordance with
this Agreement shall be reasonably satisfactory to the party or parties to whom
they are to be so delivered.
ARTICLE VI
TERMINATION AND WAIVER
6.1 TERMINATION GENERALLY. This Agreement may, by notice given prior to
the Closing, be terminated and abandoned by mutual written consent of the
parties hereto.
6.2 WAIVER OR MODIFICATION OF AGREEMENT. Notwithstanding any provision to
the contrary, any party hereto which is entitled to the benefits of this
Agreement may, and has the right to, waive in writing its rights or benefits of
any term or condition hereof at any time prior to, on or after the Closing Date.
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ARTICLE VII
INDEMNIFICATION AND RELEASE
7.1 SELLER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Seller shall indemnify and hold harmless Purchaser and its respective successors
and assigns, officers, directors, shareholders, employees, advisors and agents,
from and against any and all proceedings, judgments, obligations, losses,
damages, deficiencies, settlements, assessments, charges, costs and expenses
(including without limitation reasonable attorneys' fees, paralegals' fees,
investigation expenses, court costs, interest and penalties) arising out of or
in connection with, or caused by, directly or indirectly, any or all of the
following:
7.1.1 Any misrepresentation, breach or failure of any warranty or
representation made by Seller in this Agreement or pursuant hereto.
7.1.2 Any failure or refusal by Seller to satisfy or perform any
term or condition of this Agreement to be satisfied or performed by Seller.
7.2 PURCHASER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Purchaser shall indemnify and hold harmless Seller and her successors and
assigns, from and against any and all proceedings, judgments, obligations,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses (including without limitation reasonable attorneys' fees, paralegals'
fees, investigation expenses, court costs, interest and penalties) arising out
of or in connection with, or caused by, directly or indirectly, any or all of
the following:
7.2.1 Any misrepresentation, breach or failure of any warranty or
representation made by Purchaser in this Agreement or pursuant hereto.
7.2.2 Any failure or refusal by Purchaser to satisfy or perform
any term or condition of this Agreement to be satisfied or performed by
Purchaser.
ARTICLE VIII
MISCELLANEOUS
8.1 ASSIGNMENT. The respective rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent
of the other parties. This Agreement shall inure solely to the benefit of, and
be binding upon, the parties hereto.
8.2 NOTICES. All notices, consents, requests, claims, demands,
instructions or other communications given or made hereunder by the Purchaser or
Seller shall be in writing and personally delivered or transmitted by registered
or certified mail, postage prepaid, return receipt request, or by telex or
facsimile to the parties at the following addresses:
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If to Purchaser, to:
Cinergi Pictures Entertainment Inc.
0000 Xxxxxxxx
Xxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxxx
Fax No. (000) 000-0000
If to Seller, to:
Xxxxxx Xxxxxx Xxxxxxxx
00000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
or to such other person or address as any party may from time to time designate
by notice to the others. All such notices, consents, requests, claims, demands,
instructions and other communications shall be deemed to have been received on
the date of personal delivery, telex or facsimile or on the date of receipt if
mailed.
8.3 ENTIRE AGREEMENT. This Agreement and the other agreements and
documents referred to herein set forth the entire understanding of the parties
relating to the subject matter hereof and supersede all prior agreements and
understandings, whether oral or written.
8.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California regardless of the law of
choice of law, or conflicts of law, of that or any other jurisdiction.
8.5 FURTHER ASSURANCES. At any time and from time to time after the
Closing Date, at Purchaser's request and without further consideration, Seller
shall promptly execute and deliver all such further agreements, certificates,
instruments and documents and perform such further actions that the Purchaser
may reasonably request, in order to fully consummate the transactions
contemplated hereby and carry out the purposes and intent of this Agreement.
8.6 AMENDMENT; WAIVER. No attempted amendment, modification, termination,
discharge or change of this Agreement shall be valid and effective, unless the
parties shall unanimously agree in writing to such amendment. No waiver of any
provision of this Agreement shall be effective unless it is in writing and
signed by the party against whom it is asserted, and any such written waiver
shall only be applicable to the specific instance to which it relates and shall
not be deemed to be a continuing or future waiver.
8.7 SECURITY AGREEMENT. Effective as of the Closing Date, pursuant to
Section 10.1 of the Old Security Agreement, the Obligations (as such term is
defined in the Old Security Agreement) shall be deemed terminated and the Old
Security Agreement shall terminate. The New Security Agreement shall also be
deemed terminated as of the Closing Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PURCHASER:
CINERGI PICTURES
ENTERTAINMENT INC.
/s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Chief Financial Officer
SELLER:
XXXXXX XXXXXX XXXXXXXX
By: /s/ Xxxxxx Xxxxxx Xxxxxxxx
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By his signature below, the undersigned (i) acknowledges that he has read,
understands and agrees to the foregoing Agreement, (ii) agrees to waive any
rights he may have to purchase the Shares pursuant to that certain letter
agreement dated April 27, 1994 between Cinergi Pictures Entertainment Inc. and
Xxxxxx Xxxxxx Xxxxxxxx (the "Letter Agreement"), and (iii) agrees that the
Letter Agreement and any rights of the undersigned thereunder shall hereby
terminate.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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