EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated September 30, 1998 ("Agreement"), is
entered into by and among VIDEO CITY, INC., a Delaware corporation ("Buyer"),
FAR WEST ENTERTAINMENT, INC., an Idaho corporation ("Seller"), and XXXXXXX X.
XXXXXX ("Shareholder"), with reference to the following facts:
A. Shareholder owns all of the outstanding shares of capital stock of
Seller.
B. Seller owns and operates two retail video rental and sales stores,
located in Clovis, California and Pocatello, Idaho (the "Stores"), operating
under the name "Video City."
C. Buyer wishes to purchase substantially all of the assets of Seller,
including without limitation, the assets which are located in the Stores and in
Buyer's facility in Bakersfield, California (the "Bakersfield Facility").
D. Seller and Shareholder wish to sell substantially all of the assets of
Seller to Buyer.
NOW, THEREFORE, in consideration of the representations, warranties,
agreements and covenants and subject to the terms and provisions contained
herein, the parties hereto agree as follows:
Article I
Purchase and Sale
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1.1 Purchase and Sale of Assets. Subject to the terms and conditions and
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on the basis of and in reliance upon the representations and warranties set
forth in this Agreement, Seller hereby sells, conveys, transfers and delivers to
Buyer, and Buyer hereby purchases from Seller, effective as of the Closing Date
(as hereinafter defined), the following assets, free and clear of all liens,
security interests and encumbrances:
(a) All of Seller's furniture, fixtures, signs, equipment, computer
hardware and software, supplies and other personal property, whether located
at the Stores or at the Bakersfield Facility (collectively, the "Equipment"),
and all of Seller's right, title and interest as tenant under the leases for
each of the Equipment (collectively, the "Equipment Leases");
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(b) Seller's business and customer records, manuals, computer data, books
and advertising materials, telephone and facsimile numbers, goodwill
(including the covenant not to compete from Seller and Shareholder set forth
in Article VII), Seller's trade name and logo, intellectual property, and all
other intangible assets of Seller applicable to each of the Stores since their
respective openings (the "Intangible Assets");
(c) All of Seller's right, title and interest as tenant under the leases
of real property for each of the Stores (the "Real Property Leases");
(d) Seller's video cassettes, video discs, video games, video players and
other items held for rent or sale, whether located at the Stores or at the
Bakersfield Facility (the "Inventory");
(e) All deferred charges, late fees, prepaid items, lease security
deposits, and credits of all kinds, including, without limitation, amounts
owed to Seller under rental agreements with Seller's customers that are past
due not more than 59 days as of the Closing Date (as hereinafter defined); and
(f) Claims previously vested in Seller under insurance policies applicable
to the Stores.
All of the foregoing items are sometimes referred to herein as the "Acquired
Assets."
1.2 Retained Assets. The Acquired Assets shall not include cash, claims
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of Seller for refunds of federal and state income taxes, and amounts owed to
Seller under rental agreements with Seller's customers that are past due 60 days
or more as of the Closing Date (as hereinafter defined).
1.3 Consideration and Payment. In full consideration for the transfer
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of the Acquired Assets, Buyer hereby delivers to Seller on the Closing Date, the
following (collectively, the "Purchase Price"):
(a) Cash in the amount of $20,000;
(b) The assumption by Buyer of certain of Seller's liabilities and
indebtedness to third parties in an amount not to exceed $242,000;
(c) The forgiveness by Buyer of Seller's indebtedness to Buyer in the
amount of $253,000;
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(d) A promissory note in the principal amount of $100,000 payable to
Seller or Shareholder, in the form attached hereto as Exhibit A; and
(e) 32,000 shares of Common Stock of Buyer.
Certificates representing the shares of Common Stock of Buyer will bear a legend
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE IN THE OPINION OF COUNSEL FOR THE ISSUER."
1.4 Closing. The Closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Xxxx & Xxxxx
Professional Corporation, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000. All actions set forth in this Agreement to be taken on the
Closing Date shall occur on September 30, 1998 (the "Closing Date"), or such
other date as the parties hereto may mutually agree. At the Closing, all
actions, each of which shall be conditioned on the occurrence of the others,
shall be deemed to take place simultaneously.
1.5 Instruments of Conveyance and Transfer. Seller shall deliver to
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Buyer on the Closing Date, in connection with the execution and delivery of this
Agreement:
(a) (i) lease Assignment and Assumption Agreements relating to the Real
Property Leases and the Equipment Leases, (ii) a xxxx of sale covering the
remainder of the Acquired Assets in form and substance satisfactory to Buyer,
and (iii) such other bills of sale, endorsements, assignments and other good
and sufficient instruments of conveyance and delivery as Buyer may reasonably
request.
(b) All of Seller's contracts and commitments, books, files and records
and other data relating to the Acquired Assets or to the operation of the
Stores. Seller agrees that on the Closing Date all steps shall be taken as may
be required to put Buyer in actual possession and operating control of the
Acquired Assets and the related business, to assure continuity of operation of
the Stores.
(c) Any releases from any creditor of Seller holding a security interest
in any of the Acquired Assets.
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1.6 Sales Taxes. Seller and Buyer shall execute and deliver to each other
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whatever documents may be required in order to exempt this transaction, to the
extent legally permissible, from the application of sales, use or transfer taxes
under the laws of the States of California and Idaho. To the extent this
transaction is not so exempt, Seller shall pay such taxes and provide upon
request evidence of payment of same to Buyer.
1.7 Assumption of Certain Liabilities and Obligations. The liabilities of
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Seller being assumed and to be paid, and the obligations of Seller to be
performed or discharged, by Buyer are those and only those set forth herein (the
"Assumed Obligations"):
(a) the assumption of the tenant's obligations under the Real Property
Leases and the Equipment Leases from and after the Closing Date; and
(b) the assumption of certain liabilities and indebtedness as provided in
Sections 1.3(b) and 1.3(c) of this Agreement.
Such assumption or assumptions shall not in any way limit Buyer's right of
recourse for any breach of covenants, representations or warranties contained
herein. Nothing contained herein shall preclude Buyer from contesting, in good
faith, the duties and liabilities of Seller and Buyer to third parties.
1.8 Limitations on Assumption of Liabilities. Except as provided in this
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Agreement, and whether or not reflected on Seller's books, Buyer does not assume
any liability or obligation of the Stores (a) to any of Seller's employees,
directors or shareholders; (b) not included in the Assumed Obligations; (c)
arising from any breach by Seller, or from any fact or transaction involving a
breach by Seller, of any covenant, agreement, representation or warranty
contained herein or incurred in connection with the transactions contemplated
hereby; (d) with respect to fees and expenses of Seller's counsel and other
experts employed by Seller; (e) involving the payment of any domestic (federal,
state or local) taxes on or measured by income, which are due or shall become
due as a result of the operation of the Stores through the Closing Date; or (f)
in respect of or arising out of Seller's express or implied warranties with
respect to products rented or sold by the Stores on or before the Closing Date.
1.9 Performance of Other Obligations. Seller shall
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perform, or cause to be performed, all of the obligations and pay and discharge
all of the liabilities of the Stores not assumed by Buyer pursuant to Section
1.8 when and as they become due and payable, except that Seller may contest, in
good faith, such obligations or liabilities. Seller shall, at its expense, take
any and all actions which may be necessary to prevent any person, firm or
governmental authority from having recourse against any of the Acquired Assets
or against Buyer.
1.10 Bulk Sales. Seller and Shareholder agree to indemnify Buyer and
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hold it harmless against any claims and demands of whatever nature, including
reasonable counsel fees and costs in contesting the same, asserted against Buyer
relative to the Acquired Assets, by any creditor of Seller for noncompliance by
Seller with bulk sales laws or similar laws, if any, which may be applicable to
the sale or transfer of the Acquired Assets hereunder.
1.11 Availability of Employees of the Business. Seller shall use its
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reasonable best efforts to keep available to Buyer for employment the services
of the employees of the Stores.
1.12 Expenses. Whether the transactions contemplated by this Agreement
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shall be consummated or not, each party shall pay its own expenses incident to
this Agreement.
Article II
Representations and Warranties
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of Seller and Shareholder
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Seller and Shareholder, jointly and severally, represent and warrant to
Buyer that:
2.1 Due Organization, etc. Seller is duly organized, validly existing
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and in good standing under the laws of the State of Idaho, and has full
corporate power to own its properties and conduct the business presently being
conducted by it.
2.2 Authority Relative to this Agreement; Consents. The execution,
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delivery and performance of this Agreement by Seller have been duly authorized
and approved by all requisite corporate action, and neither the execution nor
the delivery of this Agreement nor the consummation of the transactions
contemplated hereby by Seller, nor compliance with nor fulfillment of the terms
and provisions hereof, will, (a) conflict with or result in a breach of the
terms,
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conditions or provisions of or constitute a default under the Articles of
Incorporation or By-laws of Seller, or any material instrument, mortgage or deed
of trust evidencing or securing indebtedness for borrowed money, any financing
lease, judgment, order, award, decree or other restriction of any kind to which
Seller is a party or by which it is bound, (b) require the approval, consent,
authorization or other order or action of, or filing with, any court,
governmental authority or regulatory body, (c) require the consent, approval,
order or authorization of any person under any permit, license, agreement,
indenture or other instrument to which Seller is a party or by which any of its
properties are subject, except for the consent of the landlords and lessors
under the Real Property Leases and the Equipment Leases, or (d) require any
declaration, filing or registration with any governmental or regulatory
authority by Seller. Seller has full power and authority to do and perform all
acts and things required to be done pursuant to this Agreement. This Agreement
and each other agreement and instrument required to be delivered hereunder by
Seller, when duly executed and delivered by Seller, will constitute valid and
binding obligations of Seller and will be enforceable in accordance with their
respective terms.
2.3 Acquired Assets. Except as set out in Schedule 2.3, Seller is the
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sole owner of and has good title to all of the Acquired Assets and will transfer
the same to Buyer free and clear of all liens, encumbrances, claims and security
interests of any type or nature whatsoever. Each of the Equipment Leases and the
Real Property Leases are listed in Schedule 2.3. Seller has delivered to Buyer a
complete copy of each of the Equipment Leases and the Real Property Leases. As
of the date hereof, Seller has made all payments due under the Equipment Leases
and the Real Property Leases. The Equipment and other assets included in the
Acquired Assets are suitable for the uses in which they are currently employed,
are in good operating condition and are free from any defects, except such minor
defects as do not interfere with the continued use of such properties and the
Equipment in the conduct of the normal operations of the Stores, and the
Inventory is of merchantable quality and has been maintained in a commercially
reasonable condition. With respect to the Real Property Leases included in the
Acquired Assets, there is no notice of cancellation or termination under any
option or right reserved to the lessor under any Real Property Lease or any
notice of default under any Real Property Lease, and no event has occurred
which, with notice or lapse of time or both, would constitute a default under
any Real Property Lease. Seller has not assigned its interest under any Real
Property Lease or subleased the premises demised thereby. The present use of
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any leased premises pursuant to the Real Property Leases does not depend on any
variance, special exceptions or other special municipal approval of limited
duration for continuing legality. Since December 31, 1997, Seller and
Shareholder have not sold, assigned, transferred, conveyed, leased, mortgaged,
pledged or otherwise disposed of or encumbered any assets of Seller, or any
interests therein, other than in the ordinary course of its business and
consistent with its past practices.
2.4 Compliance with Laws. Seller is in material compliance, and there
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exists no alleged noncompliance, with all applicable statutes, orders, rules and
regulations promulgated by governmental authorities relating in any material
respect to the Acquired Assets or the operation or conduct of the business of
the Stores, including, without limitation, any applicable statute, order, rule
or regulation relating to (i) wages, hours, hiring, non-discrimination,
promotion, retirement, benefits, pensions and working conditions, (ii) air,
water, toxic substances or noise, (iii) health and safety or (iv) zoning and
building codes, and Seller has not received any notice of alleged violation of
any such statute, order, rule or regulation. Schedule 2.4 lists all material
governmental licenses, permits, filings, authorizations, approvals and indicia
of authority and any pending applications for any thereof (and indicates whether
each is freely transferable to Buyer) relating to the conduct of business of the
Stores held by Seller, and such licenses, permits, filings, authorizations,
approvals and indicia of authority are all the governmental licenses, permits,
filings, authorizations, approvals and indicia of authority necessary to conduct
the business of the Stores or to use the Acquired Assets as currently conducted
or used.
2.5 Employees. Seller is not a party to any employment, noncompetition,
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collective bargaining or other agreements of any nature whatsoever with Seller's
current or past employees at any of the Stores. Seller does not now have, and
has never maintained, any pension, profit sharing, fringe benefit or deferred
compensation plans covering any of its employees at any of the Stores; and all
of Seller's employees are "at will" employees, and Seller will have paid
Seller's employees all compensation and benefits of any type or nature earned by
them up to the Closing Date.
2.6 Trademarks, etc. Seller owns, or is licensed under, the trademarks,
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trade names and copyrights as are useful and necessary to conduct the business
as now operated at the Stores, and Seller is not currently in receipt of any
notice of conflict with the asserted right of others in such
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trademarks, trade names or copyrights or the use thereof, nor has Seller
licensed or otherwise authorized any other person to use the name "Video City."
2.7 Litigation. There is no litigation, arbitration proceeding or
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governmental investigation pending, or so far as is known to Seller threatened,
or any judgment, lien, award, order or decree outstanding against, or relating
to the Stores, the Acquired Assets or the transactions contemplated by this
Agreement, nor is there any basis known to Seller for any such litigation,
proceeding or investigation. Seller is not in default with respect to any order
of any court, governmental authority, or arbitration board or tribunal, with
respect to the Stores.
2.8 Tax Returns and Audit. Seller has filed all federal, state and local
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tax returns which are required to be filed with respect to the operations of the
Stores and has paid, or made provision for the payment of, all taxes which have
or may have been due pursuant to such returns or to assessments received
relative to operations of the Stores other than taxes on or measured by income.
All federal, state and local franchise, sales, use, occupation, property,
excise, or other taxes attributable to the Stores have been timely and fully
paid or adequately reserved. No deficiencies on any of Seller's tax returns or
reports attributable to or otherwise allocable to the Stores have been
threatened as of the date hereof.
2.9 Powers of Attorney. No person has any power of attorney to act on
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of the Stores in connection with its properties or business affairs.
2.10 Transactions with Management. Schedule 2.10 hereto includes a
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complete and correct list and description of the amounts and other essential
terms of all indebtedness and other fixed or contingent obligations, liabilities
or commitments existing on the date hereof of the Stores to or from any past or
current officer, director, employee or controlling shareholder of Seller or any
person related to, controlling, controlled by or under common control with
Seller. All transactions between such persons and the Stores have been on terms
equivalent to those available from unrelated third parties.
2.11 Accuracy of Supplemental Information. The disclosure schedules and
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Seller's representations in the Assignment and Assumption Agreements relating to
the Real Property Leases and the Equipment Leases are true, accurate and
complete in all material respects. All financial information that Seller has
provided or will provide to
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Buyer in connection with Buyer's evaluation of this asset purchase, including
without limitation, the balance sheets of Seller as of December 31, 1997, and
the statement of operations of Seller during the year ended December 31, 1997,
is or will be true, accurate, and complete in all material respects.
2.12 Inventory. The inventory of Seller reflected on the balance sheet of
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Seller as of December 31, 1997, as well as other inventory items acquired since
December 31, 1997 that are now the property of Seller, are of such quality and
held in such quantities as are being used and will be usable and salable or
rentable in the ordinary course of the business of Seller. Since December 31,
1997, Seller has continued to replenish its inventories in a normal and
customary manner consistent with practice prevailing in the retail video sales
and rental industry. Since December 31, 1997, Seller and Shareholder have not
sold, assigned, transferred, conveyed, leased, mortgaged, pledged or otherwise
disposed of or encumbered any inventory of Seller's video cassettes, video
discs, video games, video players and other items held for rent or sale, other
than in the ordinary course of its business and consistent with its past
practices.
2.13 Accuracy and Provision of Information. None of the documents or
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other information made available to Buyer or its affiliates, attorneys,
accountants, agents or representatives in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein not misleading. Seller has provided Buyer all material
information regarding its business and operations.
2.14 Investor Representations. Shareholder represents that (i) he is an
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accredited investor as defined in Regulation D under the Securities Act of 1933,
as amended (the "Securities Act"), or (ii) by reason of his business and
financial experience, and the business and financial experience of those persons
unaffiliated with Buyer retained by him, if any, to advise him with respect to
an investment in the shares of Common Stock of Buyer, Shareholder together with
such advisers have such knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risk of the
prospective investment, and that he is acquiring the shares of Common Stock of
Buyer for his own account or for one or more separate accounts maintained by
him, if any, for investment and not with a view to the distribution thereof
except in compliance with the Securities Act or an exemption available
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thereunder. Shareholder understands and agrees that the shares of Common Stock
of Buyer have not been registered under the Securities Act and may be resold
only if registered pursuant to the applicable provisions of the Securities Act
or if an exemption from registration is available.
Article III
Representations and Warranties of Buyer
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Buyer represents and warrants to Seller and Shareholder that (i) Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, (ii) the execution, delivery and performance of this
Agreement and of all documents or agreements referred to in or related to this
Agreement on the part of Buyer have been duly and effectively authorized by the
Board of Directors of Buyer, and (iii) this Agreement and each other agreement
and instrument required to be delivered hereunder by Buyer, when duly executed
and delivered by Buyer, will constitute valid and binding obligations of Buyer
and will be enforceable in accordance with their respective terms.
Article IV
Indemnification
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4.1 Indemnity by Seller and Shareholder. Seller and Shareholder, jointly
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and severally, shall indemnify, defend, and hold Buyer harmless from and after
the Closing Date against and in respect of:
(a) Any and all liabilities and obligations of, or claims against, Seller
and the Stores not expressly assumed by Buyer; and
(b) Any and all damage, loss, deficiency, costs, and expenses resulting
from any misrepresentation, breach of warranty, or nonfulfillment of any
obligation on the part of Seller or Shareholder under this Agreement or from
any misrepresentation in, omission from, or occasioned by, any certificate or
other instrument furnished or to be furnished to Buyer under this Agreement
prepared by or at the request of Seller or Shareholder; and
(c) Any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs and legal and other expenses incident to any of the
foregoing; provided, however, that if any claim shall be asserted against
Buyer
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in respect of which Buyer proposes to demand indemnification, Seller and
Shareholder shall be notified to that effect with reasonable promptness after
such assertion.
4.2 Indemnification for Personal Injury. Seller and Shareholder agree to
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defend, indemnify and hold harmless Buyer against and in respect of any claim
for personal injury or property damage, where such personal injury or property
damage arose out of Seller's use, ownership, or operation prior to the Closing
Date of the Acquired Assets or the Stores.
4.3 Indemnification by Buyer. Buyer agrees to defend, indemnify, and hold
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harmless Seller and Shareholder against and in respect of any claims arising out
of Buyer's use, ownership or operation from and after the Closing Date of the
Acquired Assets or the Stores, provided, however, if any claim shall be asserted
against Seller or Shareholder in respect of which Seller or Shareholder proposes
to demand indemnification, Buyer shall be notified to that effect with
reasonable promptness after such assertion.
Article V
Employee Relations and Benefits
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5.1 Pre-Closing Date Compensation and Benefits. Seller shall pay to or on
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behalf of its salaried and hourly employees who work at the Stores all
compensation and benefits of any nature whatsoever owing to them on account of
any and all work performed as Seller's employees as of the Closing Date. Buyer
shall have no liability for any compensation, severance payments or benefits
due, owing or payable on the Closing Date to employees who work at the Stores.
5.2 Termination and Rehiring. Seller shall terminate all of its employees
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at the Stores as of the Closing Date. Seller shall be solely responsible for
complying with any applicable state or federal laws pertaining to Seller's
termination of its employees in connection with the transactions contemplated by
this Agreement. Buyer may offer employment to any or all of Seller's employees
in its discretion commencing on the Closing Date. Buyer shall be permitted to
interview any or all of Seller's employees at any time for such purpose.
5.3 No Rights to Employees. Nothing herein expressed or implied shall
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confer upon any employee of
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either Seller or Buyer any rights or remedies, including, without
limitation, any right to employment or continued employment for any
specified period.
Article VI
Actions to be Taken Subsequent to the Closing Date
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6.1 Further Assurances. Following the Closing, Seller shall, upon
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request by Buyer, (a) do, execute and deliver, or cause to be done, executed,
and delivered, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances and (b) use its best efforts to
obtain all authorizations, approvals, consents and waivers that may be
reasonably required for the conveyance, transfer, assignment, delivery,
assurance and confirmation to Buyer, of any or all of the Acquired Assets.
Seller authorizes Buyer to apply for and obtain recordation as necessary of
the evidences of transfer to Buyer of the Acquired Assets under this Agreement.
Seller shall (at Seller's expense) promptly perform such lawful acts and execute
such documents as Buyer may reasonably request to obtain the full benefits of
the transfer of ownership of the Acquired Assets, and shall cooperate with Buyer
to obtain for Buyer all non-transferable governmental permits and licenses
necessary or appropriate to conduct the business and operations of the Stores.
6.2 Recent Business Records. Seller will deliver to Buyer all business
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and customer records for July and August 1998 and up to and including the day
preceding the Closing Date not later than seven days after the Closing Date.
6.3 Prorations. All rents and other charges under the Real Property
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Leases, the Equipment Leases, personal property taxes on the Acquired Assets,
utilities, and similar items shall be prorated between Buyer and Seller as of
the Closing Date. Seller and Buyer shall make such payments as may be required
in order to settle the prorations at the Closing if the information is available
to do so. Otherwise, Buyer and Seller shall settle the prorations between
themselves not later than 60 days after the Closing Date (except for those
percentage rent prorations which must await the expiration of a longer period of
time in order to compute) by submitting appropriate documentation and payments
to one another. If any of the Real Property Leases require the payment of
percentage rent, Seller and Buyer shall prorate the required payment based on
their respective sales during the period
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with respect to which percentage rent is payable.
Article VII
Covenant Not To Compete
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For a period commencing on the Closing Date and ending five years
thereafter, Seller and Shareholder jointly and severally agree that neither they
nor any of their affiliates shall own, operate, control, license, or have an
interest in any retail video store business located within a five mile radius of
any of the Stores. The parties agree that Buyer's damages for a violation of
this covenant will be difficult to ascertain with precision. Therefore, in
addition to whatever other relief may be available under applicable law, Buyer
shall be entitled to specifically enforce the provisions of this Article VII,
and Seller and Shareholder waive any defense based on a claim that Buyer has or
may have an adequate remedy at law for a violation of this Article.
For the purposes of this Article VII, the following words shall have the
following meanings:
(a) "affiliate" means any person managed or controlled by Seller or
Shareholder, any person in which Seller or Shareholder holds more than a five
percent interest, or any person who holds more than a five percent interest in
Seller or in any affiliate of Shareholder or Seller;
(b) "person" means any individual, corporation, partnership, limited
liability company, trust, proprietor-ship, or other entity; and
(c) "retail video store" means a retail business which engages in a
business which is the same as or similar to the business that Seller has engaged
in through the operation of the Stores.
Article VIII
Miscellaneous
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8.1 Entire Agreement. The entire agreement between the parties is
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incorporated into this Agreement and the documents referenced herein. This
Agreement supersedes any and all prior agreements and understandings between the
parties with respect to the subject matter hereof, including without limitation,
the Letter of Intent, dated May 26,
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1998, entered into by Seller and Buyer. This Agreement may not be modified or
amended except by a written document duly executed by the party against whom
such modification or amendment is sought to be enforced.
8.2 Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California.
8.3 Notices. All notices, requests, demands and other communications
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hereunder shall be in writing, including telegrams, and shall have been deemed
duly given if personally delivered, 24 hours after being sent by facsimile
transmission or by a nationally recognized overnight courier service (e.g.,
Federal Express) for next day delivery or 72 hours after being sent by
registered or certified mail, postage prepaid, return receipt requested:
If to Buyer: Video City, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
With a copy to: Xxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
If to Seller or
Shareholder: Far West Entertainment, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
With a copy to: Service, Xxxxxx & Xxxx
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxx
Any party may change its address for notices by written notice to the other
parties.
8.4 Survival of Representations and Warranties. All representations and
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warranties made by the parties in this Agreement or in any document, statement,
certificate, schedule or exhibit furnished or to be furnished pursuant hereto,
or in connection with the transactions contemplated hereby, shall survive the
Closing and any investigation made at any time with respect thereto.
8.5 Captions; Pronouns, Singular and Plural. The
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captions of Articles and Sections in this Agreement are for the convenience of
the parties and shall not affect the meaning or interpretation of this
Agreement. Each pronoun used herein includes the masculine, feminine, neuter,
singular and plural as required by the context in which used.
8.6 Taxes. The parties agree to comply with the provisions of Section
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1060 of the Internal Revenue Code of 1986, as amended, and to file applicable
reports and returns on a basis consistent with the allocations agreed upon by
the parties.
8.7 Broker. Neither Seller nor Shareholder has been represented by any
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business or other broker in connection with the sale and purchase covered by
this Agreement and no commissions of any kind shall become due as a result of
this sale and purchase. Any claimed commissions shall be paid by the party who
the broker proves engaged such party.
8.8 Waiver. No waiver of any provision of this Agreement shall be deemed,
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or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
8.9 Negotiations. This Agreement constitutes the product of negotiations
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of the parties hereto and enforcement hereof will be interpreted in a neutral
manner and not more strongly for or against any party based upon the source of
draftsmanship hereof.
8.10 Expenses. Each party hereto shall pay its own legal, accounting, out-
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of-pocket and other expenses incident to this Agreement and to any action taken
by such party in preparation for carrying this Agreement into effect.
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
BUYER:
VIDEO CITY, INC.
By /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Chief Executive Officer
SELLER:
FAR WEST ENTERTAINMENT, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
SHAREHOLDER:
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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