Exhibit 10(i)
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement"), dated as of June 9, 2000, is
entered into by and among Sunset Productions, Inc., a Colorado corporation
("Sunset"), SoundWorks International, Inc., a Nevada corporation ("SoundWorks"),
and Santa Fe Acquisitions, Inc., a Delaware corporation ("Santa Fe").
RECITALS
A. Sunset wishes to sell, and Santa Fe wishes to purchase, all of the
assets of Sunset.
B. Representatives of SoundWorks have previously executed a letter of
intent with respect to SoundWorks' acquisition of Santa Fe after Santa Fe has
concluded its purchase of the assets of Sunset pursuant to this Agreement. A
true and correct copy of SoundWorks' letter of intent is attached hereto as
Exhibit A.
C. Representatives of Sunset and Santa Fe have previously executed a
letter of intent with respect to Santa Fe's acquisition of Sunset's assets,
dated February 11, 2000 (the "Letter of Intent"), which Letter of Intent was
subsequently modified pursuant to an addendum dated February 17, 2000 (the
"Addendum"). True and correct copies of the Letter of Intent and Addendum are
attached hereto as Exhibits B and C, respectively.
D. Pursuant to the Letter of Intent and Addendum, the total purchase price
of approximately $348,000 was to be paid by Santa Fe on or before ninety (90)
days from February 11, 2000 (May 11, 2000). The parties have agreed to extend
the closing date until on or before October 1, 2000. The parties wish to provide
for transportation and care of Sunset's assets, and the payment of Sunset's
loans, during the period from the date hereof until October 1, 2000 or until
Santa Fe has paid the full purchase price for the acquisition of Sunset's
assets.
AGREEMENT
1. The terms of the Letter of Intent and Addendum are incorporated hertein
by reference and reconfirmed by the parties, except as modified below. By its
execution of this Agreement. SoundWorks hereby acknowledges its acceptance of
the terms and conditions of the letters of intent and addendum attached hereto
as Exhibits A, B and C.
2. The purchase price for Sunset's assets shall be comprised of the
following: principal and accrued interest on loan number 10778201 from Band of
America; Visa card debt of $40,000, together with interest accrued thereon in
the amount
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of approximately $4,000; and $86,500, representing a loan from Xxxxxx
Xxxxxx to Sunset (of which $20,000 is due to Xxxx Xxxxxxx and $66,500 is due to
Xxxxxx Xxxxxx).
3. The parties acknowledge and agree that it is impossible to determine
the amount of interest which will have accrued on the Bank of America loan and
the Visa card debt by the time the full purchase price is paid by Santa Fe
hereunder, but that the total purchase price payable pursuant to this Agreement
shall include the full amount of interest which accrues on such loan and credit
card debt through the date of payment in full to Sunset hereunder.
4. Santa Fe agrees to make monthly interest payments of approximately
$2,000 to Bank of America until Santa Fe has paid the full purchase price
hereunder.
5. At any time after the date of this Agreement, Santa Fe may take
possession of, and transport to another location, the assets of Sunset listed in
the Letter of Intent and the exhibit thereto (Eshibit B). The parties
acknowledge and agree that the audio book titles from Literature on Tape, Inc.
(42 unabridged classics) will not be conveyed by Sunset to Santa Fe hereunder,
as such inventory is intended to be reconveyed by Sunset to Literature on Tape,
Inc. pursuant to the Agreement to Reconvey Assets to Literature on Tape, Inc.
executed by representatives of Sunset. A copy of the Agreement to Reconvey
Assets is attached hereto as Exhibit D and incorporated by reference herein.
6. The parties acknowledge that Bank of America currently holds a security
interest in the assets to be transferred hereunder. Santa Fe agrees that all of
the assets to be transferred hereunder shall be fully insured, at full
replacement value, from the time that they are picked up from Americana
Publishing in Albuquerque, New Mexico, during the period of their
transportation, and until payment in full of the purchase price hereunder. Santa
Fe shall deliver proof of insurance to Sunset and to Bank of America prior to
transportation of any assets from Americana Publishing.
7. During the term of this Agreement, Santa Fe may sell some of the
inventory conveyed hereunder. The the extent such inventory is not replaced with
additional inventory, Santa Fe shall apply the net proceeds of all such sales to
repayment of the Bank of America loan referenced above, and shall provide Sunset
with immediate confirmation of all loan repayments.
8. The failure of Santa Fe and/or SoundWorks to procure the insurance
referenced in paragraph 6 above, to make loan repayments and provide immediate
documentation thereof to Sunset pursuant to paragraph 7 above, or to pay the
full purchase price hereunder on or before October 1, 2000, shall constitute a
breach of this Agreement. Upon such breach, sunset shall immediately be entitled
to retake possession of the assets described herein, together with all net
proceeds of sale of inventory by Santa Fe which were not paid to Bank of America
pursuant to paragraph 7 above. Such retaking of possessions by Sunset shall be
at Santa Fe's sole cost and expense.
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9. Should Santa Fe default in any of its obligations hereunder, SoundWorks
agrees to indemnify and hold harmless sunset, its officers, directors,
shareholders, employees and agents, from and against any liability which may
arise as a result of this Agreement.
10. All of the provisions of this Agreement are hereby declared to be
severable and a finding by any arbitrator of court of competent jurisdiction
that any provision of this Agreement is void, unlawful or unenforceable shall
not affect the validity or enforceability of any other provision of this
Agreement.
11. Any notice required to be given hereunder shall be in writing sent by
registered mail to Sunset at 000 Xxxxxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx
00000 and to the attention of Xxxxx Xxxxxx, 000 Xxxxxxxxx, Xxxxx 000, Xxxxx Xx,
Xxx Xxxxxx 00000; to SoundWorks and/or Santa Fe at Xxxx Xxxxxx Xxx 0000, Xxxxxxx
Xxx, Xxxxxxxxxx; and to Bank of America in care of Xxxxx Xxxxxx, Madison,
Harbor, Mror & Xxxxxx P.A., 000 Xxxxx Xxxxxx XX, Xxxxx 0000, Xxxxxxxxxxx, Xxx
Xxxxxx 00000, or to such changed address as the parties may designate by like
notice. The effective date of such notice shall be its mailing date.
12. This Agreement cannot be amended, modified or supplemented in any
respect except by a subsequent written agreement entered into by all parties.
13. No delay or failure by any party to exercise any right under this
Agreement, and no partial or single exercise under it shall constitute a waiver
of that or any other right.
14. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
15. this Agreement was entered into in the State of New Mexico, and shall
be construed in accordance with the laws of the State of New Mexico.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives, all as of the date first above
written.
SUNSET PRODUCTIONS, INC.
By:_____________________________________
President
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SOUNDWORKS INTERNATIONAL, INC.
By:_____________________________________
Its:
SANTA FE ACQUISITIONS, INC.
By:_____________________________________
Its:
________________________________________
Xxxxxx X. Xxxxxx, personal guarantor
of Bank of America loan to Sunset
Productions, Inc.
________________________________________
Xxxxxx Xxxx Xxxxxxx, personal
guarantor of Bank of America loan to
Sunset Productions, Inc.
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