EXHIBIT 10.6 - AGREEMENT AND RELEASE DATED October 11, 1996 BETWEEN XXXXXXXX
XXXXXX XXXXXX, AS TRUSTEE OF THE ETHELMAN X. XXXXXX TRUST DATED
March 30, 1987, AND GALLERY OF HISTORY, INC.
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This Agreement and Release (hereafter, "Agreement") is made as of
October 11, 1996, between Xxxxxxxx Xxxxxx Xxxxxx, as Trustee of the Xxxxxxxx X.
Xxxxxx Trust dated 3/30/87 (hereafter, "Haldan"), and Gallery of History, Inc.,
a Nevada corporation (hereafter, "Company"), with reference to the following
facts:
A. Company proposes to purchase 2,659,720 shares of its common
stock (hereafter, the "Shares") from Haldan, and to satisfy the purchase
price therefor by transferring all of Company's right, title and interest
in and to all of the property listed on Exhibit "A" hereto (hereafter, the
"Property") to Haldan pursuant to a Xxxx of Sale in the form attached
hereto as Exhibit "B"; and
X. Xxxxxx is agreeable to Company's proposal, and desires to enter
into this Agreement with Company to set forth the parties' agreement
respecting said sale of the Property to Haldan in return for the transfer of
the Shares to Company and other matters related thereto.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto,
and based on the foregoing premises, each of Haldan and Company agree as
follows:
1. Mutual Agreement To Transfer. Company hereby agrees to sell,
transfer and convey the Property to Haldan, and Haldan hereby agrees to
transfer the Shares to Company, all on the terms and conditions as hereinafter
set forth.
2. Agreement As To Value Of Property. Company and Haldan agree
that the fair market value of the Property is $1,803,045.
3. Payment of Cash In Lieu of Delivery of Certain Items. Company
has heretofore sold, contracted to sell, or otherwise will be unable to deliver
certain items which would have otherwise constituted part of the Property, all
of which items are listed on Exhibit "C" hereto. In lieu of delivery of such
items, Haldan has agreed to accept the amount of $196,955, which amount shall
be paid to Haldan in immediately available funds on and as of the Closing (as
hereinafter defined) and as a condition precedent thereto.
4. Conditions And Deliveries. The Closing of the transaction
contemplated hereunder (hereafter, "Closing") shall occur not later than
October 18, 1996, upon the satisfaction of the following conditions and
delivery of the following items:
A. By Company:
(i) Company shall execute and deliver to Haldan the Xxxx
of Sale in the form attached hereto as Exhibit "B";
(ii) Company shall deliver to a carrier under the direct
supervision of Xx. Xxxxx Xxxxxx of Sotheby's or Xx. Xxxxxx'x designee
(hereafter, "Haldan's Representative") the Property for shipment to Sotheby's
in New York, New York, in the form inspected and found acceptable by Haldan's
Representative;
(iii) Company shall deliver to Haldan's Representative
(with copy by facsimile to Irell & Xxxxxxx LLP, at numbers (000) 000-0000, to
the attention of Xx. Xxx X. Xxxxxx) a certificate evidencing insurance in the
amount of at least $2,000,000 (with no deductibles) covering any loss that may
occur in the shipment of the Property to Sotheby's in New York, New York;
(iv) Company shall deliver to Haldan cash or other
immediately available funds in the amount of $196,955; and
(v) Company shall cause to be delivered to Haldan the
legal opinion of the firm of Christensen, White, Miller, Fink, Xxxxxx, Xxxxxx
and Xxxxxxx, LLP, and that of Nevada counsel, Xxxxx, Xxxxxxx & Day, as to
matters of Nevada law, that (a) Company has the corporate power and authority
to enter into this Agreement, (b) this Agreement and the Xxxx of Sale have
been duly executed and delivered by Company, (c) the Agreement and the Xxxx of
Sale constitute valid and binding obligations of Company, enforceable against
Company in accordance with the respective terms thereof, and (d) the sale of
the Property by Company and the redemption of the Shares in connection
therewith do not violate any federal or state laws applicable thereto
including, without limitation, federal and state securities laws.
B. By Haldan:
(i) Haldan shall deliver to Company's representative at
the offices of Irell & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx (a) certificates enumerated on Exhibit "D" hereto and
representing a total of 2,562,220 of the Shares, together with stock power(s)
as necessary to effect the transfer of the ownership of such Shares from
Haldan to Company, and (b) instructions to Xxxxxxx, Xxxxx & Co. (hereafter,
"Goldman") in the form heretofore prepared by Company and accepted by each of
Haldan and Goldman, instructing Goldman to transfer a total of 97,500 of the
Shares held by Haldan in "street name" to the Company (the foregoing items (a)
and (b) are hereinafter referred to as the "Assignment Documents"); and
(ii) Haldan shall cause to be delivered to Company the
legal opinion of the law firm of Irell & Xxxxxxx LLP, and that of Nevada
counsel to Haldan, Xxxxxxxxx & Xxxxxx, Ltd., as to matters of Nevada law, that
(a) Haldan has the power and authority to enter into this Agreement and
execute and deliver the Assignment Documents, and to sell the Shares pursuant
hereto, (b) this Agreement and the Assignment Documents have been duly
executed and delivered by Haldan, (c) this Agreement and the Assignment
Documents constitute valid and binding obligations of Haldan, enforceable
against Haldan in accordance with the respective terms thereof, and the
purchase of the Property by Haldan does not violate its trust instrument or
the trust and estate laws applicable to Haldan as a trust.
5. Closing. The Closing shall occur when Haldan's Representative
shall have confirmed to Haldan that it is ready and will accept delivery of
the Property, that the Property has been delivered to a carrier for shipment
to Sotheby's in New York, New York, and that such delivery to the carrier was
made under the direct supervision of Haldan's Representative. To facilitate
such determination by Haldan's Representative, Company shall assemble the
Property at its place of business set forth in paragraph 11.1 hereof, and
shall allow Haldan's Representative access thereto, commencing as from 6:00
a.m. on Friday, October 18, 1996, to inspect same for purposes of determining
(i) the authenticity of each item of Property, (ii) that the items of Property
presented for inspection are all of those set forth on Exhibit "A", and (iii)
that the condition of each such item of Property conforms to the description
thereof as heretofore provided to Haldan and/or Haldan's Representative for
purposes of the appraisal thereof. Haldan's Representative shall confirm to
Haldan when it has made such determination and whether based on such
determination it is ready to accept delivery of the Property on behalf of
Haldan in New York, New York. Company acknowledges and agrees that all of the
Property shall by delivered UNFRAMED, and that no item of Property will be
accepted for delivery if framed. Upon (a) confirmation to Haldan by Haldan's
Representative that (1) Haldan's Representative is ready to accept delivery of
the Property, and (2) the Property had been delivered to a carrier under the
direct supervision of Haldan's Representative, and (b) delivery to Haldan of
the other items to be delivered by Company as set forth in paragraph 4 A.
above, Haldan shall deliver the items required to be delivered by Haldan as
set forth in paragraph 4 B. The Closing shall be deemed to have occurred upon
the consummation of all of the foregoing deliveries by Company and Haldan.
6. Release. Concurrently with the Closing and effective as of the
date of the occurrence thereof, each of Company and Xx. Xxxx Xxxxxxx on the
one part, and Haldan on the other, hereby irrevocably waives, releases and
discharges the other from any and all claims, demands, rights, actions,
suites, causes of action, settlements, breaches, inaccuracies, obligations,
costs, expenses, damages, liabilities and indemnities of whatever nature
(collectively, "Claims"), and indemnification with respect to Claims
pertaining to, and/or arising from, the purchase and ownership of the Shares
by Xxxxx X. Xxxxxx and/or Haldan, the purported agreements between Xx. Xxxxx
X. Xxxxxx and Xx. Xxxx Xxxxxxx dated May 10, 1994 and May 12, 1994 (hereafter,
the "May Agreements"), and the foregoing persons' dealings with each other
with respect thereto. It is the intention of the parties that the release
affected hereby shall be a bar to each and every Claim with respect to the
matters covered by this release, whether known or unknown, asserted or
unasserted, or suspected or unsuspected. In furtherance of this intention,
each of Company and Xx. Xxxx Xxxxxxx on the one part, and Haldan on the other,
hereby expressly waives any and all rights and benefits conferred upon it by
the provisions of Section 1542 of the California Civil Code which provides
that:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially affected
his settlement with the debtor."
Each of Company and Xx. Xxxx Xxxxxxx understands, acknowledges and agrees that
the release effected hereby shall have absolutely no effect whatsoever on each
of their respective obligations under this Agreement, and the documents and/or
instruments executed pursuant hereto and/or in connection herewith including,
without limitation, its obligations respecting representations and warranties
made with respect to the Property transferred pursuant hereto, and Haldan
similarly acknowledges, understands and agrees that said release shall have
absolutely no effect on its obligations hereunder including, without
limitation, its representations and warranties respecting the Shares
transferred pursuant hereto.
7. Costs. Company shall be responsible for and shall pay for all
of the costs and expenses of delivery of the Property to Haldan's Representative
in New York, New York, including, without limitation, the costs of insurance
for the Property, it being acknowledged and agreed that Company shall bear the
risk of loss to the Property at all times prior to delivery thereof to
Haldan's Reprensentative4 in New York, New York.
8. Taxes. Company shall be responsible for and shall pay any
Nevada sales, use or other Nevada taxes applicable to the sale of the Property
to Haldan, and hereby agrees to indemnify and hold Haldan free and harmless from
and against any and all liability for such taxes, it being acknowledged and
agreed that Company shall not be responsible for any taxes measured by or
based on the income of Haldan, or sales, use or other taxes imposed on Haldan
and/or the Property by federal or any other state laws other than the laws of
Nevada and the governmental jurisdictions therein.
9. Indemnification. Company hereby agrees to indemnify, defend and
hold Haldan and its agents, assigns, successors and transferees free and
harmless from and against any liability, loss, claim, damage or cost
(including attorneys' fees and costs) relating to any breach or alleged breach
of Company's representations and/or warranties contained herein and/or in the
Xxxx of Sale respecting the Property and the transfer thereof to Haldan
pursuant hereto. Haldan shall allow Company to assume control of the defense
of any such action brought by a third party provided that (i) Company shall
deliver to Haldan an agreement in writing to defend such claim at its sole
cost and expense within five (5) business days of notice from Haldan and (ii)
Company is and remains financially capable for providing indemnification for
such claim. Such defense will be conducted by reputable attorneys (reasonably
approved by Haldan) retained by Company at Company's sole cost and expense.
Haldan will have the right to participate in such proceedings and to be
separately represented by attorneys of its own choosing, but will be
responsible for the costs of such separate representation unless the interest
of Haldan and Company in the action conflict in such a manner and to such an
extent as to require, consistent with applicable standards of professional
responsibility, the retention of separate counsel for Haldan, in which case
Company will pay for such separate representation by attorneys chosen by
Haldan. In connection with the foregoing indemnification, Haldan agrees that
with respect to any item of Property, Company shall not be required to pay
Haldan more that 110% of the Sotheby's high auction estimate for such item of
Property as set forth on Exhibit "A" hereto (but not including any costs
incurred by Haldan to enforce this indemnity, or costs incurred by Haldan or
Company to defend against any alleged breach) for any claim by Haldan of loss
or diminution in value of such item of Property resulting from Company's
breach of any representation or warranty contained herein and/or in the Xxxx
of Sale as to authenticity or ownership of such item of Property, or to pay
any amount respecting any such claim that arises after the fifth anniversary
of the date as of which the Closing occurs; it being acknowledged and agreed
by Company that the foregoing limitation shall not apply to limit (i) any
other claim by Haldan to the extent the same is not based on the authenticity
or ownership of the Property or any item thereof, or (ii) Haldan's claim based
on the authenticity or ownership of Property or any item thereof if breach of
the representation and/or warranty of authenticity or ownership resulted from
Company's willful misconduct.
10. Representations.
A. By Haldan: Haldan represents and warrants to Company that:
(i) Haldan is not a "foreign person" as such terms is
defined in 1445(f) of the Internal Revenue Code;
(ii) Haldan is the sole, rightful, legal and beneficial
owner of the Shares:
(iii) Haldan has the legal capacity to sell the Shares to
Company and to make the representations and warranties set forth in the
paragraph 10A.;
(iv) the Shares will be transferred to Company free of
any lien, encumbrance or claim of any kind whatsoever against the Shares or
title thereto;
(v) upon execution by Haldan and delivery thereof to
Company of this Agreement and the Assignment Documents, good title and right
to possession of the Shares will pass to Company; and
(vi) the execution, delivery and performance of this
Agreement by Haldan will not violate its trust instrument or the trust and
estate laws applicable to Haldan as a trust.
Haldan hereby agrees to indemnify Company and its directors,
officers, agents, assigns, successors and transferees against any breach of
Haldan's representations and warranties set forth in this paragraph 10A.
Company shall allow Haldan to assume control of the defense of any action
brought by any third party for which Haldan is obligated to indemnify Company
pursuant to the forgoing provided that (1) Haldan shall deliver to Company an
agreement in writing to defend such claim at its sole cost and expense within
five (5) business days of notice from Company and (2) Haldan is and remains
financially capable of providing indemnification for such claim. Such defense
shall be conducted by reputable attorneys (reasonably approved by Company)
retained by Haldan at Haldan's sole cost and expense. Company will have the
right to participate in such proceedings and to be separately represented by
attorneys of its own choosing, but will be responsible for the costs of such
separate representation unless the interest of Company and Haldan in the
action conflict in such a manner and to such an extent as to require,
consistent with applicable standards of professional responsibility, the
retention of separate counsel for Company, in which case Haldan will pay for
such representation by attorneys chosen by Company.
B. By Company: Company represents and warrants to Haldan that:
(i) it has the legal capacity to enter into this Agreement,
sell the Property to Haldan and make the representations and warranties herein
and in the Xxxx of Sale regarding such sale;
(ii) its execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action, the
person executing this Agreement has been duly authorized to do so by the
Company, and the Company has duly executed and delivered this Agreement;
(iii) its execution, delivery and performance of this
Agreement and its purchase of the Shares will not violate the Company's
constating instruments, and laws applicable to Company, or agreements binding
on the Company or its property;
(iv) it has filed as and when due (giving effect to
extensions obtained) all federal and state tax returns required to be filed by
Company, and has paid all taxes due and payable in such returns, and has paid
all sales, use, withholding and other taxes applicable to Company, other than,
in each of the foregoing instances, taxes being contested in good faith and
with respect to which Company has appropriately reserved for the payment
thereof in accordance with generally accepted accounting principles; the
Company has not received any notice of a deficiency or other claim for taxes
owing from any federal or state taxing authority, other than such as have been
paid, or settled with any settlement amount paid;
(v) Company has complied with all applicable provisions of
the Uniform Commercial Code as in effect in the State of Nevada respecting the
sale of the Property;
(vi) the Company is not qualified to conduct business in
the State of New York, and neither its business activities in said state nor
its ownership of property located therein would require that the Company
qualify to do business in the State of New York; and
(vii) other than the items set forth on Exhibit "A" and
Exhibit "C" hereto, the Company does not have any other item of inventory with
"raw" cost (that is excluding framing, research, translation, conservator
costs and the like) of $2,000 or more, except for approximately 121 items with
individual "raw" cost of $2,000 or more, which items aggregate less than
$415,000.
C. Each of Haldan's and Company's representations and
warranties herein shall survive the Closing and shall not be affected in any
manner whatsoever by any inspections conducted by or on behalf of such party
respecting the items covered by such representations and/or warranties, it
being acknowledged and agreed, however, that the representations and
warranties of Company respecting authenticity and/or ownership of the Property
shall not survive beyond the fifth anniversary of the date as of which the
Closing occurred.
11. Miscellaneous.
11.1 Notices. All notices, requests, demands to or upon,
or other communication with, the respective parties hereto to be effective
shall be in writing (including by facsimile transmission) and, unless
otherwise expressly provided herein, shall be deemed to have been duly given,
made or received (a) in the case of delivery by hand, when delivered, (b) in
the case of delivery by mail, three (3) days after being deposited in the
mails, postage prepaid, or (c) in the case of delivery by facsimile
transmission, when sent and receipt has been confirmed, addressed as follows:
If to Haldan:
Xxxxxx Xxxxxxxx, Esq.
Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
If to Company:
Gallery of History
0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopier: (000) 000-0000
11.2 Entire Agreement. This Agreement and the other
documents and instruments expressly referred to herein constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements of the parties with respect hereto. There are
no promises, undertakings, representations or warranties, whether oral or
written, by Haldan relative to the subject matter hereof which has not been
expressly set forth or referred to herein. The May Agreements are hereby
canceled and of no further force or effect.
11.3 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California.
11.4 Counterparts. This Agreement may be executed by one
or both parties to this Agreement on any number of separate counterparts
(including facsimile transmission), and all of said counterparts when taken
together shall be deemed to constitute one and the same instrument. A faxed
signature shall have the same validity as a manual signature.
11.5 Amendments: Successors and Assigns. This Agreement
may not be modified or amended without the prior written consent of the
parties hereto. This Agreement shall be binding on the parties hereto and
their respective successors and assigns.
11.6 Resolution of Disputes. Except for actions seeking
injunctive relief, which may be brought either in arbitration or in any court
having jurisdiction, any dispute on any matter regarding this Agreement shall
be submitted by the parties to binding arbitration in Los Angeles, California
in accordance with the rules of the American Arbitration Association. The
parties agree that all of the discovery rights available under Section 1283.05
of the California Code of Civil Procedures shall be available to the parties
in connection with any arbitration proceeding. The parties acknowledge that
in the event of any arbitration or other action to resolve disputes hereunder,
the prevailing party in such dispute shall be entitled and shall receive
(including, without limitation, as part of any award in an arbitration) the
fees and costs incurred by it in connection with such dispute including,
without limitation, the fees and costs of counsel engaged in connection
therewith. "In any arbitration proceeding hereunder, the parties hereto
hereby EXPRESSLY, KNOWINGLY AND VOLUNTARILY FULLY AND FINALLY WAIVE AND
RELINQUISH any and all provisions of, and rights and benefits that may arise
under, Section 1281.9 of the Code of Civil Procedure of the State of
California ("the statute"), and hereby DISCHARGE AND EXONERATE any person(s)
proposed for nomination as neutral arbitrator(s) from any duty to comply with
any of the provisions of the statute in any such arbitration proceeding
hereunder.
In connection with such waiver, relinquishment, exoneration and
discharge, the parties acknowledge that they have read and are familiar with
the provisions of the statute and have had adequate opportunity to consult
with legal counsel with respect thereto and with respect to any other
pertinent provisions of law. All parties, with the advice of their respective
legal counsel, agree that the statute is unnecessary and burdensome as to them
and that it is in their best interests to enter into this agreement, so that
the arbitration process provided for by this agreement shall proceed as if the
statute did not exist.
HOWEVER, this waiver, relinquishment, exoneration and discharge is
not intended to apply to any judicial appointment of arbitrators, nor is it
intended to discharge or exonerate any potential arbitrator from any other
duty imposed by law or equity.
12. Agreement Negotiated. The parties hereto are sophisticated
and have been represented by lawyers throughout this transaction who have
carefully negotiated the provisions hereof. As a consequence, the parties do
not believe that the presumptions of Civil Code Section 1654 and similar laws
or rules relating to the interpretation of contracts against the drafter of
any particular clause should be applied in this case and therefore waive their
effects. Only the final executed version of this Agreement may be admitted
into evidence or used for any purpose, and drafts of this Agreement shall be
disregarded for all purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first above written by the
person(s) duly authorized to do so.
Xxxxxxxx X. Xxxxxx Trust
Dated 3/30/87
By: /s/ Xxxxxxxx Xxxxxx Xxxxxx, Trustee
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Xxxxxxxx Xxxxxx Xxxxxx, as Trustee
Gallery of History, Inc.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx Xxxxxxx
Its: President
The undersigned, Xx. Xxxx Xxxxxxx, by execution hereof hereby
joins in the release effected in paragraph 6 hereof, and otherwise agrees to
the terms hereof and to be bound thereby.
By: /s/ Xxxx X. Xxxxxxx
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Xx. Xxxx Xxxxxxx
