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EXHIBIT 10.11
ASSET PURCHASE
AGREEMENT
By and Among:
Sierra Press
&
Panorama
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ASSET PURCHASE AGREEMENT
BY AND AMONG
PANORAMA INTERNATIONAL PRODUCTIONS, INC.,
SIERRA PRESS, INC.,
TELLURIAN PRESS, INC.,
XXXXX XXXXXX,
XXXX XXXXXX
AND
XXXXXXX X. XXXXXXXX
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TABLE OF CONTENTS
PAGE
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THE ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
Acquired Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1-
Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
ASSUMED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
Stock Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
Merger or Sale of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
Tax Treatment of the Sale of the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
REPRESENTATIONS AND WARRANTIES OF
SIERRA AND THE SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Existence and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Financial Statements and No Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
Tax Audits and Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
Restrictive Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
Authorization for Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
No Misleading Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Existence and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Capital Stock of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Financial Statements and No Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Tax Audits and Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Restrictive Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Authorization for Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -00-
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Xx Xxxxxxxxxx Xxxxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
FURTHER AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Commitments and Changes Prior to the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Consent to Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
By the Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
By the Buyer and the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Claims for Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Right to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
CONDITIONS TO OBLIGATIONS OF THE BUYER
AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Good Standing and Tax Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Truth of Representations, Warranties and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Non-Competition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Amendment of Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
CONDITIONS TO OBLIGATIONS OF THE
SHAREHOLDERS AND SIERRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Good Standing and Tax Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Truth of Representations, Warranties and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
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EXHIBITS
Description of Exhibit
Form of Non-Competition Agreement Exhibit A
Form of Employment Agreements Exhibit B
Form of Lease Agreement Exhibit C
SCHEDULES
Description of Schedules
Excluded Receivables Schedule 1(A)(ii)
Additional Fixed Assets Schedule 1(A)(v)
Leasehold Rights Schedule 1(A)(x)
Excluded Assets Schedule 1(B)(ii)
Immaterial Excluded Assets Schedule 1(B)(iv)
List of Jurisdiction where Sierra Conducts Business Schedule 4(A)
Description of Sierra Shareholders Debts/Loans Schedule 4(B)
Excluede Personal Property Schedule 4(C)
Description of Real Property Schedule 4(D)
List of Material Contracts of Sierra Schedule 4(E)
List of Employee Benefit Plans of Sierra Schedule 4(F)
Filing/Payment of Taxes due of Sierra Schedule 4(G)
List of Liabilities of Sierra Schedule 4(H)
Legal Proceedings of Sierra Schedule 4(J)
Accounts Receivable of Sierra Schedule 4(K)
Audited Financial Statements of the Company Schedule 5(C)
Description of Real Property of the Company Schedule 5(E)
Filing/Payment of Taxes due of the Company Schedule 5(F)
List of Liabilities of the Company Schedule 5(G)
Legal Proceedings of the Company Schedule 5(I)
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), is made and entered into
this 18th day of June, 1996, by and between PANORAMA INTERNATIONAL PRODUCTIONS,
INC., a Delaware corporation (the "Company"); TELLURIAN PRESS, INC., a
California corporation ("Buyer"), SIERRA PRESS, INC., a Delaware corporation
("Sierra"); and XXXXX XXXXXX, XXXX XXXXXX AND XXXXXXX X. XXXXXXXX
(collectively, the "Shareholders").
WHEREAS, the parties hereto propose to enter into this Agreement to
provide for the acquisition of substantially all of the assets of Sierra by the
Company through its wholly-owned subsidiary; and
WHEREAS, the Company is authorized to issue 6,000,000 shares of common
stock, $.001 par value per share, of which an aggregate of 4,760,799 will be
issued and outstanding on the Closing Date (as hereinafter defined); and
WHEREAS, the Buyer desires to acquire the assets of Sierra in exchange
for shares of Company common stock in a transaction that will not qualify as a
"tax free reorganization" pursuant to the provisions of Section 368(a)(1)(C) of
the Internal Revenue Code of 1986 (the "Code"); and
WHEREAS, the parties contemplate that the Company will be positioned
to make a public offering of its common stock at an early time, subject to
uncontrollable conditions, including the vagaries of the market for new issues,
the availability of an underwriter and the ability to achieve or exceed
business plans; and
WHEREAS, the parties desire to set forth in this Agreement certain
representations, warranties, agreements, and conditions with respect to the
acquisition of the Sierra assets;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
1. THE ASSETS.
A. ACQUIRED ASSETS.
Subject to the terms and conditions of this Agreement, on and
as of the "Closing Date" (as hereinafter defined), Sierra shall sell to the
Buyer, and the Buyer shall purchase from Sierra, all, and not less than all, of
the assets and properties of Sierra (other than the "Excluded Assets"
hereinafter defined) as set forth herein, and as same are constituted on the
Closing Date (collectively, the "Assets"). Without limiting the generality of
the foregoing, the Assets shall be comprised of all of the following:
(I) All (i) cash on hand, cash and cash
equivalent items held by or on behalf of Sierra, including without limitation
checking accounts, marketable securities, bank
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accounts and other cash items, (ii) the proceeds of accounts receivable
including uncashed checks in payment thereof received by Sierra on or prior to
the Closing Date, and (iii) related investments readily convertible into cash
of Sierra (collectively, the "Cash Items");
(II) All trade accounts receivable, notes
receivable and other rights to receive payment from customers of Sierra,
including therein all accrued accounts receivable representing amounts payable
in respect of products and services sold or otherwise provided to customers of
Sierra which have not been invoiced or billed as at the Closing Date
(collectively, the "Receivables"); provided, that the term Receivables shall
not include those specific accounts receivable, if any, which are set forth on
Schedule 1(A)(ii) annexed hereto;
(III) All inventories of raw materials,
work-in-process, finished goods, operating supplies and materials, factory and
maintenance supplies and related inventory items, which are owned by Sierra and
used in connection with its business (collectively, the "Inventories");
(IV) All assumable prepaid items of Sierra for
which the Company would receive an economic benefit following the Closing Date,
and appropriately pro-rated through the Closing Date (collectively, the
"Prepaid Items");
(V) All (i) machinery, equipment, molds, tooling,
jigs, dies, measuring and calibrating devices, automobiles and other vehicles,
files, systems, furniture, fixtures, office equipment and (subject to the terms
and conditions respecting ownership thereof as provided by the terms and
conditions of any lease and/or agreements with respect to the occupancy of Real
Property referred to in Section 1(A)(x) hereof) leasehold improvements of
Sierra which are owned by Sierra (collectively, the "Fixed Assets"); (ii) those
additional Fixed Assets listed on Schedule 1(A)(v) annexed hereto which have
been ordered for Sierra prior to the Closing Date, whether or not received as
at the Closing Date; and (iii) those leases of personal property listed on
Schedule 1(A)(v) annexed hereto;
(VI) All letters patent, patent applications,
trademarks, copyrights and trade names, trademarks, computers, computer
equipment, computer programs, computer software, and computer systems (other
than those listed on Schedule 1(B)(ii)), library of books, records, know-how,
trade secrets, technical information, brochures and other related assets of
Sierra pertaining to its business and owned by Sierra (collectively, the
"Intellectual Property");
(VII) All customer lists, trade secrets, licenses,
permits, franchises, whether or not listed on Schedules to this Agreement, and
related contract rights and other proprietary intangible assets of Sierra,
whether or not confidential, and all books, records, printouts, drawings, data,
files, notes, notebooks, accounts, invoices, correspondence and memoranda which
are owned or possessed by Sierra (collectively, the "Documents and Records");
(VIII) All tools categorized as small hand tools and
packaging and office supplies owned by Sierra, whether or not expensed
(collectively, the "Supplies");
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(IX) All rights and benefits of Sierra under all:
(i) purchase orders on hand and customer bids and quotations; and all other
contract rights, commitments and claims of Sierra which are specified under or
pursuant to all manufacturers' warranties and any licenses or license
agreements relating to any Intellectual Property used by Sierra for its
business; (ii) contracts and agreements, including orders and commitments
covering the purchase of Inventories and/or Supplies, the providing of services
and/or products to customers, and agency, consultant and distributorship
agreements; and (iii) all other contracts, orders and commitments which are not
required to be scheduled pursuant to this Agreement and (in the case of such
unscheduled contracts, orders and commitments) which have been entered into by
Sierra in the normal and ordinary course of its business prior to the Closing
Date and not in violation of the covenants contained in this Agreement
(collectively, the "Contract Rights");
(X) All leasehold rights, as lessee, in and to
those leases of real properties and improvements occupied by Sierra in
connection with its business as are set forth of Schedule 1(A)(x) annexed
hereto (the "Leased Real Estate");
(XI) The exclusive rights in and to the name
"Sierra Press", and all trade names and trademarks associated therewith,
whether alone or in conjunction with any other name or word, and all other
names used by Sierra in connection with the operation of its business as a
going concern;
(XII) Except as it may relate to Excluded Assets
and Excluded Liabilities, all rights, benefits and claims, including rights of
indemnification, monetary relief and/or replacement of Inventories, products or
supplies, which may be asserted against any vendor, manufacturer or supplier of
Inventories, Fixed Assets or Supplies included in the Assets;
(XIII) Except for the Excluded Assets referred to in
Section 1.2 hereof, all other rights and assets tangible or intangible, of
Sierra used by Sierra in connection with its business, except for such assets
which have been disposed of in the normal and ordinary course of the business
of Sierra and pursuant to this Agreement between the date hereof and the
Closing Date;
(XIV) All claims, recoveries, causes of action,
documents and records relating to pending proceedings, lawsuits and claims to
which Sierra is a party as of the Closing Date and relating to Sierra, the
Assets and/or to its business; and
(XV) All rights incident, directly or indirectly,
to insurance policies, proceeds, loss funds, claims, litigation and insurance
accounts in connection with the Assets, Sierra and the operation of the
business prior to the Closing Date.
B. Excluded Assets.
On the Closing Date, Sierra shall retain all right, title and
interest in and to, and the Buyer shall not purchase or acquire, any of the
following assets and properties of Sierra (hereinafter, the "Excluded Assets"):
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(I) all shares of capital stock and other
securities, the stock books and minute books of Sierra;
(II) All photographic equipment, light tables and
transparencies which are the personal property of the shareholders of Sierra,
which are specifically identified on Schedule 1(B)(ii) annexed hereto;
(III) The real estate owned by Sierra in Mariposa,
California; and
(IV) Those immaterial assets, if any, whether or
not used or held for use in connection with the conduct of the business of
Sierra, as agreed upon by the Buyer and Sierra, which are specifically
identified on Schedule 1(B)(iv) annexed hereto;
2. ASSUMED LIABILITIES
Subject to the terms and conditions of this Agreement, on and
as of the "Closing Date" (as hereinafter defined), except for the Excluded
Liabilities listed on Schedule 2, the Buyer shall assume and pay, perform and
discharge, as the case may be, all, and not less than all, of the liabilities
and obligations of Sierra, whether fixed or contingent, as disclosed on
Sierra's March 31, 1996 balance sheet or incurred by Sierra from the date
thereof to the Closing Date in the ordinary course of business. The Buyer
shall not assume any of Sierra's tax liabilities except those disclosed on
Sierra's March 31, 1996 balance sheet or incurred by Sierra from the date
thereof to the Closing Date in the ordinary course of business.
3. PURCHASE PRICE.
A. STOCK CONSIDERATION. In consideration for its
purchase of the Assets and in addition to its assumption or retention of the
Assumed Liabilities (as applicable), the Company shall issue to Sierra or its
designees an aggregate of 636,306 shares of Company Common Stock (the "Purchase
Price"), payable as follows:
(i) 336,306 upon Closing; and
(ii) the Company hereby agrees to issue to Sierra or
its designees, up to 300,000 additional shares of Company Common Stock as
follows:
(a) Calculation of Additional Shares.
Commencing with the Company's fiscal year January 1, 1996 and ending December
31, 1998 (each a "Fiscal Year" and collectively, the "Fiscal Years"), Sierra,
or its designees, shall be entitled to receive, on a pro rata basis, (i) an
aggregate of one (1) share of Company Common Stock for every $1.00 of pre-tax
net income of the Buyer for the 1996 Fiscal Year; an aggregate of one (1) share
of Company Common Stock for every $1.00 of pre-tax net income of the Buyer in
excess of $75,000 of pre-tax net income for the 1997 Fiscal Year; and an
aggregate of one (1) share for Company Common Stock for every $1.00 of pre-tax
net income of the Buyer in excess of $125,000 of pre-tax net income for the
1998 Fiscal Year and (ii) an aggregate of one (1) share of Company Common Stock
for every $1.00 of pre-tax net income of the Buyer in excess of the following:
$80,000 of pre-tax net income for the 1996 Fiscal Year; $145,000 of pre-tax net
income for the
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1997 Fiscal Year; and $280,000 of pre-tax net income for the 1998 Fiscal Year.
Such shares shall be issued to the Sierra, or its designess, within 120 days of
the end of the applicable Fiscal Year based upon the audited financial
statements of the Company for such year.
(b) Cumulative Adjustments.
(1) Notwithstanding the foregoing
formula, in no event shall the Company be obligated to issue in excess of Three
Hundred Thousand (300,000) Shares (the "Maximum Additional Shares).
(2) In the event that Sierra, or
its designees, shall not, pursuant to the above formula, have received the
Maximum Additional Shares in respect of any one Fiscal Year, the difference
between 100,000 shares and the actual aggregate amount of shares received in
earn-out payments in respect of such Fiscal Year shall be added to the Maximum
Additional Shares in the next succeeding Fiscal Year, on a cumulative basis,
and Sierra, or its designess, shall be entitled to receive such Maximum
Additional Shares, as so adjusted in the next immediately succeeding Fiscal
Year(s) until such time as the cumulative Maximum Additional Shares received in
respect of all such Fiscal Years shall have aggregated Three Hundred Thousand
(300,000) shares of Company Common Stock.
By way of example of the application of the foregoing, in the
event that the Sierra, or its designess, shall have been entitled to receive,
pursuant to the formula set forth above, an aggregate of 80,000 shares in
respect of Fiscal Year 1996, the Maximum Additional Shares which it shall be
entitled to receive pursuant to such formula in Fiscal Year 1997 shall be
adjusted to 120,000 shares, and if only 80,000 shares of the 120,000 Maximum
Additional Shares shall have been received by it pursuant to such formula in
Fiscal Year 1997, the Maximum Additional Shares which it shall be entitled to
receive in Fiscal 1998 shall be increased to 140,000 shares, so that, if
earned, the aggregate Maximum Additional Shares issued over the three Fiscal
Years ending 1998 shall have aggregated Three Hundred Thousand (300,000)
shares.
B. FURTHER ASSURANCES. From time to time from and after
the Closing, the parties shall execute and deliver, or cause to be executed and
delivered, any and all such further agreements, certificates and other
instruments, and shall take or cause to be taken any and all such further
action, as any of the parties may reasonably deem necessary or desirable in
order to carry out the intent and purposes of this Agreement.
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C. MERGER OR SALE OF THE COMPANY. In the event that the
Company shall be merged with or sold to another entity in a transaction in
which the Company is not the surviving entity, and the consideration to be
received by the Shareholders in such transaction is less than the consideration
paid them by the Company at that point in time ($1.00 multiplied by the number
of shares of Company Common Stock issued to them), the Shareholders shall have
the option, exercisable by written notice given to the Company within fifteen
(15) days, of repurchasing Sierra at a price equal to the value paid by the
Company for the Assets, the payment of any inter-company advances and the
assumption of or provision for any liabilities of Sierra for which the Company
may be liable. The closing of such transaction shall take place in a
commercially reasonable manner, at such time and place as shall be agreed upon
by the parties.
D. TAX TREATMENT OF THE SALE OF THE ASSETS. It is the
intention of the parties hereto that the sale by Sierra of the Assets to the
Buyer shall be treatable as a taxable event as to Sierra and Sierra has no
present intention of liquidating, dissolving or otherwise winding up its
affairs.
E. OFFICERS AND DIRECTORS. Upon the effectiveness of
this Agreement, Messrs. Xxxxxx and Xxxxxxxx shall enter into employment
agreements with the Buyer, substantially in the form annexed hereto as Exhibit
B, and shall have the right to designate one (1) member of the Company's Board
of Directors until the earlier of (i) an initial public offering of the
Company's Common Stock has been declared effective by the Securities and
Exchange Commission or (ii) the Company shall have been merged with or
otherwise sold in a transaction in which the Company is not the surviving
entity.
Upon the effectiveness of this Agreement, Messrs. Xxxxxx and
Xxxxxxxx shall become as officers and directors of the Buyer and the officers
and directors of Buyer shall be as follows:
Name Office
Xxxxxx X. Xxxxxxx Chairman of the Board and Director
Xxxxxxx X. Xxxxxxxx President and Director
Xxxxx Xxxxxx General Manager and Director
Xxxx Xxxxxx Director
4. REPRESENTATIONS AND WARRANTIES OF SIERRA AND THE SHAREHOLDERS.
Sierra and the Shareholders do hereby jointly and severally represent and
warrant to the Company as follows:
A. EXISTENCE AND GOOD STANDING. Sierra is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware; has the requisite corporate power and authority to own
property and to conduct business as now being conducted; and is duly qualified
to carry on its business and is in good standing in the jurisdictions indicated
on Schedule 4(A) attached hereto, which Schedule 4(A) lists all of the
jurisdictions in which Sierra conducts business, and the nature of the business
conducted.
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B. FINANCIAL STATEMENTS AND NO MATERIAL CHANGES. Sierra
has heretofore furnished the Buyer with a balance sheet of Sierra as of
December 31, 1995 and related statements of income and cash flows for the three
fiscal years then ended, all prepared by the accountants for Sierra (the
"Financial Statements"). Such Financial Statements, including the footnotes
thereto, have been prepared in accordance with principles consistently followed
throughout the periods indicated. Such balance sheet fairly presents the
financial condition of Sierra as of the date thereof and reflects all claims
against, and all debts and liabilities of Sierra, whether fixed, contingent, or
otherwise, as of the date thereof, and such statements of income fairly present
the results of the operations of Sierra for the period indicated. Such
Financial Statements, including the footnotes thereto, do not contain any
untrue statements of a material fact or omit any material fact necessary in
order to make the statements contained in this paragraph or therein not
misleading. Since January 1, 1996, there has been no material adverse change
in the assets or liabilities or in the business or condition, financial or
otherwise, of Sierra, except for the contribution to the capital of Sierra of
all Shareholder loans or other Shareholder debt, as described in Schedule 4(B),
or except as provided below, and to the knowledge of Sierra, no fact or
condition exists or is contemplated or threatened which might cause such a
material adverse change in the future.
C. PERSONAL PROPERTY. Sierra has and will have on the
Closing Date, good and marketable title to all personal and intangible property
reflected on Schedule 4(C) attached hereto, or as set forth in the unaudited
balance sheet of Sierra as of December 31, 1995, except as to changes made in
the ordinary course of business and except those excluded personal assets of
the Shareholders listed on Schedule 4(C).
D. REAL PROPERTY. Sierra owns the real property listed
on Schedule 4(D). Title to such real property is not an asset to be acquired
by Buyer in this transaction.
E. MATERIAL CONTRACTS. Set forth in Schedule 4(E),
attached hereto, is a list identifying all material outstanding contracts,
agreements, leases, and undertakings to which Sierra is a party or to which any
of its properties are subject, except those referred to in other exhibits
delivered pursuant to this Agreement; Sierra is not in default under any such
contract, agreement, lease, or undertaking and it does not know of any default
by any other party thereto, and no contract, agreement, lease, or undertaking
referred to therein or in the exhibits delivered pursuant to this Agreement
will be modified or changed prior to the Closing Date, without the prior
written consent of the Buyer. Except to the extent indicated in Schedule 4(E),
no consent or approval of other parties is required for the Buyer to succeed to
such material contracts, agreements, leases, and undertakings pursuant to the
sale of the Assets. Except for the contracts listed in Schedule 4(E) or
otherwise accepted hereunder, Sierra does not have any outstanding agreement or
arrangement with distributors, dealers, or other sales representatives in
connection with the distribution of any of its products; and Sierra will not
incur any further obligations or commitments, or make any further additions to
its property or further purchases of equipment, or inventory, unless in the
ordinary course of business or with the written consent of the Buyer.
F. EMPLOYMENT AGREEMENTS. Except for the contracts,
agreements, or plans referred to in Schedule 4(F), attached hereto, Sierra does
not have any obligation, contingent or otherwise, under any employment
contract, collective bargaining agreement, executive
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13
compensation agreement, pension plan, retirement plan, profit sharing plan,
stock purchase plan, stock option plan, or any other similar agreement or
employee benefit plan. Except as set forth in Schedule 4(F), prior to the
Closing Date, Sierra will not, without the prior written consent of the Buyer
and the Company, make or agree to make any increase in the rate of wages,
salaries, bonuses, or other remuneration of any of its officers or salaried
employees or become a party to any employment contract or arrangement with any
of its officers or employees providing for bonuses, profit sharing payments,
severance pay, or retirement benefits.
G. TAX AUDITS AND PAYMENT OF TAXES. Except as set forth
in Schedule 4(G), Sierra has properly completed and filed in correct form all
federal, state, information, and other tax returns of every nature required to
be filed by it, and no extensions of time in which to file any such returns are
in effect. Sierra has paid all taxes (whether or not requiring the filing of
returns), including all deficiency assessments, additions to tax, penalties,
and interest of which notice has been received, to the extent that such amounts
have become due. To the extent that tax liabilities have accrued but have not
become payable, such amounts have been adequately reflected as liabilities on
the balance sheet as at December 31, 1995.
H. LIABILITIES. Except as set forth on Schedule 4(H)
annexed hereto, Sierra has no outstanding material claims, liabilities, or
indebtedness, fixed, contingent, or otherwise, except as set forth in the
financial information referred to in Section 4(B) above, other than (i)
liabilities incurred in connection with this transaction; and (ii) liabilities
incurred in the ordinary course of business. Sierra is not in default in
respect to the terms or conditions of any indebtedness.
I. RESTRICTIVE DOCUMENTS. None of the Shareholders or
Sierra is subject to, or a party to, any charter, bylaw, mortgage, lien, lease,
agreement, contract, instrument, law, rule, regulation, order, judgment, or
decree, or any other restriction of any kind or character which materially and
adversely affects the business or financial condition of Sierra, or which would
prevent (i) the consummation of the transactions contemplated by this
Agreement; (ii) compliance by any of them with the terms, conditions, and
provisions hereof; or (iii) the continued operation of the businesses of Sierra
after the Closing Date on substantially the same basis as theretofore operated.
The performance of the obligations of the Shareholders and Sierra under this
Agreement do not on the date hereof, and will not hereafter, violate any of the
terms or provisions of any such leases, instruments, agreements, or other
documents binding upon the Shareholders or Sierra.
J. LITIGATION. Except as disclosed on Schedule 4(J)
attached hereto, Sierra is not engaged in or a party to, or, to the knowledge
of Sierra, threatened with, any legal action or other proceeding before any
court or administrative agency.
K. ACCOUNTS RECEIVABLE. Set forth in Schedule 4(K)
attached hereto are all accounts receivable and notes receivable of Sierra as
at the end of the month immediately preceding the date of execution of this
Agreement. All of such accounts receivable and notes receivable have arisen in
the ordinary and usual course of the business of Sierra. None of such accounts
and notes receivable are subject to any counterclaims or set-offs, except such
as arise
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in the ordinary course of business and in the aggregate are not material to the
business of Sierra.
L. INVENTORIES. All inventories held by Sierra are
owned by it, and consist solely of inventories of the kind and quality
regularly used and produced in its business, and such inventories, as of the
Closing Date, will be in amounts reasonably related to the normal requirements
of the business of Sierra, and will be good and merchantable and fit for the
purposes intended.
M. AUTHORIZATION FOR AGREEMENT. The execution,
delivery, and performance of this Agreement has been duly and validly approved
by the Board of Directors of Sierra and the Shareholders. This Agreement is
valid and binding on Sierra and the Shareholders in accordance with its terms.
N. NO MISLEADING STATEMENTS. The representations and
warranties of the Shareholders and Sierra contained in this Agreement, or any
Exhibit, list, or other document delivered to the Company pursuant hereto do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein or herein not
misleading. No information material to this transaction necessary to make any
of the representations and warranties herein contained not misleading has been
withheld from, or has not been disclosed in writing to the Company.
O. BROKERAGE. No brokers, finders or similar agents
acting on behalf of the Shareholders or Sierra are entitled to any brokerage
commission, finder's fee or any similar compensation, in connection with this
Agreement or the transactions contemplated by this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants, and agrees as follows:
A. EXISTENCE AND GOOD STANDING. The Company is duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and it has the requisite corporate power and authority to own
property and to conduct business as now being conducted.
B. CAPITAL STOCK OF THE COMPANY. The Company has an
authorized capitalization consisting of Six Million (6,000,000) shares of
common stock, $.001 par value, of which Four Million Seven Hundred Sixty
Thousand Seven Hundred Ninety-Nine (4,760,799) shares are issued and
outstanding as of this date. All of the Company's outstanding shares of
capital stock have been duly authorized and validly issued and are fully paid
and non-assessable. When issued in accordance with the terms of this
Agreement, the shares of Company Common Stock issuable hereby, including the
shares comprising the Additional Consideration, will be duly authorized and
validly issued and fully paid and non-assessable shares of Company Common
Stock.
C. FINANCIAL STATEMENTS AND NO MATERIAL CHANGES.
Schedule 5(C) annexed hereto sets forth (i) the audited balance sheets of the
Company as of December 31, 1995, and statements of operations, changes in
stockholders' equity (deficit) and cash flow for the fiscal
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year ended December 31, 1995, certified by Ernst & Young, LLP, independent
certified public accountants (the "Audited Company Financial Statements").
Such Audited Company Financial Statements, including the footnotes thereto,
have been prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods indicated. Also included in
Schedule 5(C) are the unaudited financial statements of the Company for the
three months ended March 31, 1996. The balance sheets included in the
foregoing financial statements fairly present the financial condition of the
Company as of the dates thereof and reflect all claims against, and all debts
and liabilities of the Company, whether fixed, contingent, or otherwise, as of
the dates thereof, and such statements of operations fairly present the results
of the operations of the Company for the periods indicated. Neither such
balance sheets nor such income statements, including the footnotes thereto,
contain any untrue statements of a material fact or omit any material fact
necessary in order to make the statements contained in this paragraph or
therein not misleading. Since March 31, 1996, there has been no material
adverse change in the assets or liabilities or in the business or condition,
financial or otherwise, of the Company, except in the ordinary course of
business, and to the Company's knowledge, no fact or condition exists or is
contemplated or threatened which might cause such a material adverse change in
the future.
D. PERSONAL PROPERTY. The Company has and will have on
the Closing Date good and marketable title to all its personal and intangible
property, except as to such changes in personal and intangible property as have
been made in the ordinary course of business.
E. REAL PROPERTY. The Company owns no real property,
except as listed on Schedule 5(E).
F. TAX AUDITS AND PAYMENT OF TAXES. Except as set forth
on Schedule 5(F) annexed hereto: (i) the Company has properly completed and
filed in correct form all federal, state, information, and other tax returns of
every nature required to be filed by it, and no extensions of time in which to
file any such returns are in effect; (ii) the Company has paid all taxes
(whether or not requiring the filing of returns), including all deficiency
assessments, additions to tax, penalties, and interest of which notice has been
received, to the extent that such amounts have become due; and (iii) to the
extent that tax liabilities have accrued but have not become payable, such
amounts have been adequately reflected as liabilities on the balance sheet as
of that date referred to in Section 5(C) above.
G. LIABILITIES. The Company has no outstanding claims,
liabilities, or indebtedness, fixed, contingent, or otherwise, except (i) as
set forth in the financial statements referred to in Section 5(C); (ii)
liabilities incurred in connection with this transaction; (iii) liabilities
incurred in the ordinary course of business; and (iv) liabilities listed on
Schedule 5(G) hereto. The Company is not in default in respect to the terms or
conditions of any indebtedness.
H. RESTRICTIVE DOCUMENTS. The Company is not subject
to, or a party to, any charter, bylaw, mortgage, lien, lease, agreement,
contract, instrument, law, rule, regulation, order, judgment, or decree, or any
other restriction of any kind or character which materially and adversely
affects the business or condition of the Company, or which would prevent (i)
the consummation of the transactions contemplated by this Agreement; (ii)
compliance by it with the terms, conditions, and provisions hereof; or (iii)
the continued operation of the business of the
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Company after the Closing Date on substantially the same basis as theretofore
operated. The performance of the obligations of the Company under this
Agreement does not on the date hereof, and will not hereafter, violate any of
the terms or provisions of any such leases, instruments, agreements, or other
documents of the Company.
I. LITIGATION. Except as disclosed on Schedule 5(I)
attached hereto, the Company is not engaged in or a party to, or, to the
knowledge of the Company, threatened with, any legal action or other proceeding
before any court or administrative agency.
J. AUTHORIZATION FOR AGREEMENT. The execution,
delivery, and performance of this Agreement has been duly and validly approved
by the Board of Directors of the Company. No authorization of the stockholders
of the Company is required to consummate the transactions contemplated by this
Agreement. This Agreement is valid and binding on the Company in accordance
with its terms.
K. NO MISLEADING STATEMENTS. The representations of the
Company in this Agreement, or any Exhibit, Schedule, list, or other document
delivered by the Company pursuant hereto do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading. No information material
to this transaction necessary to make any of the representations and warranties
herein contained not misleading has been withheld from, or has not been
disclosed in writing to Sierra.
L. BROKERAGE. No brokers, finders or similar agents
acting on behalf of the Company are entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this Agreement or
the transactions contemplated by this Agreement.
6. FURTHER AGREEMENTS OF THE PARTIES. The Shareholders, Sierra,
Buyer and the Company further covenant and agree as follows:
A. ACCESS TO INFORMATION. The Company and Sierra may,
prior to a period ending thirty (30) days after the signing of this Agreement,
through its representatives, make such investigation of the properties, books,
and records regarding the financial and legal condition as each of the Company
and Sierra deems necessary or advisable to familiarize itself with such
properties and other matters; any officers of Sierra and the Company will
furnish the other party with such financial and operating data and other
information with respect to the respective business and properties of Sierra
and the Company, as may be legally disclosed, as Sierra and the Company shall
from time to time reasonably request. Each party shall respond to a request
for information within one week of such request for information. In the event
that a party does not so respond, the due diligence period and the Closing Date
shall be extended one day for each day of delay.
B. COMMITMENTS AND CHANGES PRIOR TO THE CLOSING DATE.
Prior to the Closing Date and except as may be first approved by the Company or
Sierra or as is otherwise permitted or required by this Agreement, (i) the
business of Sierra and the Company shall be conducted only in the ordinary and
usual course; (ii) no change shall be made in the Company's
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or Sierra's Certificate of Incorporation or Bylaws, other than to change its
name; (iii) no contract or commitment shall be entered into by or on behalf of
the Company or Sierra, except contracts in the ordinary course of business or
contracts to maintain their properties; and (iv) no change shall be made
affecting any bank, safe deposit, or power of attorney arrangements of the
Company or Sierra.
C. CONSENT TO ASSIGNMENT. The Shareholders and Sierra
agree that with respect to any contracts and agreements which may not be
assignable pursuant to the sale of the Assets, they will use their collective
best efforts to obtain from the other parties thereto either consents to the
assignment thereof or new contracts running to the Buyer, containing
substantially the same terms and conditions. To the extent, despite such best
efforts, that any such contract is not so assigned, the Buyer shall, from and
after the Closing Date, perform all of the obligations under such contract and
agreement in the name of Sierra and shall be entitled to all of the privileges
and benefits of such contract and agreement; provided, that the Buyer shall
indemnify, defend and hold harmless the Shareholders from and against any
personal liability, cost or expenses which may arise under any such contract or
agreement, but only to the extent of actions taken or omitted to be taken by
the Buyer from and after the Closing Date.
D. FINANCIAL STATEMENTS. Sierra shall deliver to the
Company, as soon as they become available after the Closing Date, a balance
sheet as of December 31, 1995 together with statements of income, cash flows
and changes for the year then ended, accompanied by the unqualified opinion of
Sierra's certified public accountants.
E. INDEMNIFICATION.
(i) By the Shareholders. The Shareholders hereby
agree to indemnify, defend and hold harmless the Company, including interest,
penalties and reasonable attorneys' fees and disbursements, from and against:
(a) any and all liabilities of the Shareholders and Sierra arising by virtue of
the operation of Sierra prior to the Closing Date and not disclosed to the
Buyer and the Company prior to the Closing Date, including but not limited to,
any and all liabilities arising by virtue of failure of the Shareholders to
fully comply with all federal and state laws and regulations; and (b) any
material inaccuracy of any representation or any breach of any warranty,
covenant or agreement of Sierra or the Shareholders contained in this Agreement
or in any document, certificate or agreement of the Shareholders or Sierra
delivered pursuant to this Agreement.
(ii) By the Buyer and the Company. The Buyer and
the Company agree to indemnify, defend and hold harmless the Shareholders from
and against any and all liabilities, including, without limitation, interest,
penalties and reasonable attorneys' fees and disbursements, arising out of due
to or otherwise in respect of any inaccuracy of any representation or any
breach of any warranty, covenant or agreement of the Buyer or Company contained
in this Agreement or in any document, certificate or agreement delivered
thereby pursuant hereto.
(iii) Claims for Indemnity. Whenever a claim shall
arise for which any party shall be entitled to indemnification hereunder, the
indemnified party shall notify the indemnifying party in writing within thirty
(30) days after the earlier of (A) the indemnified
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party's first receipt of notice of, or (B) the indemnified party's obtaining
actual knowledge of, such claim, and in any event within such shorter period as
may be necessary for the indemnifying party or parties to take appropriate
action to resist such claim. Such notice shall specify all facts known to the
indemnified party giving rise to such indemnity rights and shall estimate (to
the extent reasonably possible) the amount of potential liability arising
therefrom.
(iv) Right to Defend. The indemnifying party shall
have the right, at its own expense and by its own counsel, to undertake to
compromise, settle or defend any such matter involving the asserted liability
of the party seeking such indemnification. If any indemnifying party shall
undertake to compromise, settle or defend any such asserted liability, it shall
within seven (7) days notify the indemnified party of its intention to do so.
In any event, the indemnified party shall have the right, at its own expense,
to participate in the defense of such asserted liability. If the indemnifying
party shall fail to compromise, settle or defend any such asserted liability
within a reasonable time after notice, the indemnified party shall have the
right, but not the obligation, to undertake the compromise, settlement or
defense thereof on behalf of, for the account of, and at the risk of the
indemnifying party.
F. EXPENSES. The Company and Sierra shall each pay all
of their respective legal fees and any accounting expenses in connection with
the transactions contemplated by this Agreement.
7. CONDITIONS TO OBLIGATIONS OF THE BUYER AND THE COMPANY. The
obligations of the Buyer and the Company to cause the sale of the Assets to
become effective are subject to the satisfaction on or prior to the Closing
Date of the following conditions, each of which may be waived in writing by the
Buyer and/or the Company:
A. CORPORATE ACTION. The Shareholders and Sierra shall
have furnished the Company with (i) certified copies of resolutions, duly
adopted by the holders of all outstanding shares of Sierra Stock approving this
Agreement, and authorizing the transactions provided for herein in accordance
with the terms hereof; (ii) certified copies of resolutions duly adopted by the
Board of Directors of Sierra, to the same effect and (iii) certificates
executed by the Shareholders to the effect that: (x) the Shareholders and
Sierra have full power and authority to make, execute, deliver, and perform
this Agreement; (y) such Agreement has been duly authorized and approved by
proper action of Sierra; (z) this Agreement constitutes valid and legally
binding obligations of the Shareholders and Sierra (as relevant) in accordance
with its terms; (aa) all actions and proceedings required by law, this
Agreement, or required to be taken by the Shareholders and Sierra and Sierra's
Board of Directors at or prior to the Closing Date in order to make the sale of
the Assets effective (as relevant), have been duly and validly taken; and (bb)
the consummation of this Agreement will not result in a breach of the
Certificate of Incorporation or the Bylaws of Sierra, or a default under the
terms of any material agreements, leases or other obligations to which Sierra
or any of the Shareholders is a party.
B. GOOD STANDING AND TAX CERTIFICATES. The Company
shall have received: (i) a copy of the Certificate of Incorporation of Sierra,
certified by the Delaware Corporations Department; and (ii) a good standing
certificate from the Delaware Secretary of State, to the effect that Sierra is
in good standing in such state.
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C. TRUTH OF REPRESENTATIONS, WARRANTIES AND SCHEDULES.
The representations and warranties of the Shareholders and Sierra contained in
this Agreement and all schedules, exhibits, instruments, agreements, or other
documents that may have been delivered to the Buyer and the Company pursuant to
this Agreement, shall be true and correct in all material respects on and as of
the Closing Date with the same effect as those such representations and
warranties had been made on and as of such date, or such schedules and
instruments had been delivered on such date, and the Buyer and the Company
shall have received on the Closing Date a certificate to that effect, dated the
Closing Date and executed by the Shareholders and by the President or Vice
President of Sierra.
D. PERFORMANCE OF AGREEMENTS. Each and all of the
agreements of the Shareholders and Sierra to be performed on or before the
Closing Date pursuant to the terms hereof shall have been substantially
performed, and the Buyer and the Company shall have received on the Closing
Date a certificate to that effect executed by the Shareholders and by the
President of Sierra.
E. NON-COMPETITION AGREEMENT. On the Closing Date, each
of the Shareholders shall have executed and delivered to the Company a
non-competition agreement in substantially the form of Exhibit A annexed hereto
and made a part hereof (the "Non-Competition Agreement").
F. EMPLOYMENT AGREEMENTS. On the Closing Date, Messrs.
Xxxxxx and Xxxxxxxx shall each enter into an employment agreement with the
Buyer, substantially in the form of Exhibit B annexed hereto and made a part
hereof (the "Employment Agreements").
G. AMENDMENT OF CHARTER. On the Closing Date, Sierra
shall deliver to the Company a Certificate of Amendment to its Certificate of
Incorporation and, if necessary, an Amended Certificate of Authority, for
filing with the Delaware and California Secretaries of State, respectively, in
order to change the corporate name of Sierra to a name which does not contain
the words "Sierra Press."
8. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS AND SIERRA. The
obligations of the Shareholders and Sierra to cause the sale of the Assets to
become effective are subject to the satisfaction on or prior to the Closing
Date of the following conditions of this Section 8, any one or more of which
may be waived in writing by the Shareholders:
A. CORPORATE ACTION. The Company shall have furnished
certified copies of resolutions duly adopted by the Board of Directors of the
Company, approving this Agreement and authorizing the transaction provided for
herein in accordance with the terms hereof.
B. [INTENTIONALLY OMITTED]
C. TRUTH OF REPRESENTATIONS, WARRANTIES AND SCHEDULES.
The representations and warranties of the Company contained in this Agreement
and all schedules, exhibits, instruments, agreements, or other documents that
have been delivered to the
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Shareholders and Sierra pursuant to this Agreement, shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties have been made on and as of such
date or such schedules and instruments have been delivered on such date and the
Shareholders and Sierra shall have received on the Closing Date a certificate
to that effect, dated the Closing Date and executed by the President of the
Company.
D. PERFORMANCE OF AGREEMENTS. Each and all of the
agreements of the Company to be performed on or before the Closing Date
pursuant to the terms hereof, shall have been substantially performed, and the
Shareholders and Sierra shall have received on the Closing Date a certificate
to the effect and executed by the President of the Company.
E. EMPLOYMENT AGREEMENTS. On the Closing Date, the
Buyer shall enter into the Employment Agreements.
F. LEASE AGREEMENT. On the Closing Date, the Buyer
shall enter into a Lease Agreement (the "Lease") with the Shareholders,
substantially in the form as annexed hereto as Exhibit C.
9. CLOSING. Subject to the terms and conditions of this
Agreement, unless this Agreement shall have been previously terminated as
herein provided, the closing of the transactions contemplated hereby (the
"Closing Date") shall take place at a location to be mutually agreed upon, not
later than thirty-five (35) days following execution of this Agreement.
Subject to the terms and conditions of this Agreement, each party agrees to use
best efforts to take or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable, to cause the Closing to be
consummated and to make effective the transactions herein contemplated prior to
June 30, 1996.
Notwithstanding the foregoing, in the event and to the extent
that (i) any party fails to perform its covenants and agreements as provided in
this Agreement, or (ii) any Exhibit, Schedule or other attachment hereto, or
this Agreement itself, contains a misrepresentation or inaccuracy or omits to
state information the absence of which makes this Agreement or any Exhibit,
Schedule or other attachment hereto misleading or inaccurate at any time on or
prior to the Closing Date, then either the other party may terminate this
Agreement upon giving written notice to that effect to the other parties
hereto.
10. MISCELLANEOUS.
A. NOTICES. Except as herein provided, any notice,
request, demand or other communication required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by overnight courier, or three (3) days after having been mailed by
certified mail, return receipt requested, addressed to a party as follows:
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If to Sierra or the Shareholders:
Sierra Press, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
And if to the Buyer or the Company:
Panorama International Productions, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Chairman
with a copy to its counsel:
Xxxxxxx & Xxxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: H. Xxxxx Xxxxxxx, Xx., Esq.
or such other address as shall be furnished in writing by the parties, and such
notice or communication shall be deemed to have been given as of the date so
mailed.
B. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and there respective
successors and assigns.
C. ENTIRE AGREEMENT. It is understood and agreed that
all understandings and agreements heretofore had between the parties hereto,
are superseded in their entirety and are merged into this Agreement, which,
together with the Exhibits and Schedules hereto, fully and completely express
the parties' agreement.
D. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument.
E. GOVERNING LAW. This Agreement shall be governed by
the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the date and year first above written.
PANORAMA INTERNATIONAL
PRODUCTIONS, INC.
BY:/S/ XXXXXX X. XXXXXXX
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XXXXXX X. XXXXXXX, CHAIRMAN
TELLURIAN PRESS, INC.
BY:/S/ XXXXXX X. XXXXXXX
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NAME: XXXXXX X. XXXXXXX
TITLE: CHAIRMAN
SIERRA PRESS, INC.
BY:/S/ XXXXX XXXXXX
------------------------------------------
NAME: XXXXX XXXXXX
TITLE: SECRETARY/TREASURER
THE SHAREHOLDERS:
/S/ XXXXXXX X. XXXXXXXX
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XXXXXXX X. XXXXXXXX
/S/ XXXXX XXXXXX
---------------------------------------------
XXXXX XXXXXX
/S/ XXXX XXXXXX
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XXXX XXXXXX
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