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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
GLOBAL ONE DISTRIBUTION & MERCHANDISING INC.
(Name of Issuer)
Common Stock , $.01 Par Value
(Title of Class of Securities)
378927 10 7
(CUSIP Number)
Dru Gartside, Esq.
Samaha Grogin, LLC
911 East Colorado Boulevard, Third Floor
Pasadena, CA 91106-1700
(626) 584-1388
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 11, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
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SCHEDULE 13D
CUSIP No. 378927 10 7 Page 2 of 5 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael A. Malm
Social Security No. : ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable. (See response to Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) or 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
NUMBER OF 7 SOLE VOTING POWER
SHARES 905,248
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 905,248
PERSON 10 SHARED DISPOSITIVE POWER
WITH -0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
505,465
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.2%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 378927 10 7 Page 3 of 6 Pages
ITEM 1. SECURITY AND ISSUER
This statement of beneficial ownership on Schedule 13D (the "Statement")
relates to shares of Common stock, $.01 par value (the "Common Stock"), of
Global One Distribution & Merchandising Inc., a Delaware corporation (the
"Company"). The Company's principal executive offices are located at 5548
Lindbergh Lane, Bell, California 90201-6410.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Statement is filed by Michael A. Malm.
(b) 3730 Multiview Drive, Hollywood, CA 90068
(c) Mr. Malm served as the Chief Operating Officer of the Company until
May, 1997. Mr. Malm now serves as a consultant to the Company and is
involved in various entrepreneurial endeavors.
(d) During the past five years Mr. Malm has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years Mr. Malm has not been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) Mr. Malm is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Not Applicable.
ITEM 4. PURPOSE OF THE TRANSACTION
Not applicable.
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY
(a) Amount beneficially owned: 905,248 (1)
Percent of Class: 4.2% (2)
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CUSIP No. 378927 10 7 Page 4 of 6 Pages
(b) Number if shares as to which such person has:
(i) Sole power to vote or to
direct the vote: 905,248
(ii) Shared power to vote or to
direct the vote: 0
(iii) Sole power to dispose of or
direct the disposition of: 905,248
(iv) Shared power to dispose of
or direct disposition of: 0
_______________________
(1) Includes options to purchase 300,000 shares at $0.20 per share.
See Item 6.
(2) Based upon 21,011,947 shares outstanding.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Effective August 1, 1997, Global One Distribution & Merchandising Inc., a
Delaware corporation (the "Company"), entered into a Stock Purchase and
Consulting Agreement (the "Malm Agreement") with Michael Malm, a director
and a former officer of the Company ("Malm"), providing for, among other
things (i) Malm's execution of an agreement with Miller Johnson & Kuehn
Incorporated ("Miller Johnson") or its designee for Miller Johnson's
purchase of 1,200,000 shares of Common Stock held by Malm, (ii) the
termination of Malm's employment agreement with the Company and the mutual
release of claims by the Company and Malm, (iii) the Company's payment to
Malm of $2,000 per month for 10 months, (iv) Malm's consulting services to
the Company for up to 12 days per month for up to three months at the rate
of $1,000 per day, (v) the reinstatement and acceleration of Malm's options
to purchase Common Stock and the repricing thereof to $0.20 per share and
(vi) Malm's put option until February 11, 1998 to require the Company to
purchase, and the Company's call option exercisable for 30 days thereafter
to purchase, the assets of Image 2000, a graphic design firm held by Malm,
for a purchase price of 1,200,000 shares of Common Stock and additional
stock and cash amounts based on the net after tax earnings of such assets,
provided that Malm may rescind the purchase in the event that he
discontinues his employment with the Company and the Company's management
changes. Malm's 1,200,000 shares were sold November 11, 1997 at a price of
$0.125 per share.
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CUSIP No. 378927 10 7 Page 5 of 6 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
99.1 Stock Purchase and Consulting Agreement dated November 11, 1997
by and between Michael Malm and Global One Distribution &
Merchandising Inc.
99.2 Stock Purchase Agreement dated November 11, 1997 between Michael
Malm and the individuals listed on Schedule I thereto
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CUSIP No. 378927 10 7 Page 6 of 6 Pages
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: November 25, 1997
/s/ Michael Malm
-----------------
Michael Malm
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EXHIBIT 99.1
STOCK PURCHASE AND CONSULTING AGREEMENT
This Stock Purchase and Consulting Agreement (the "Agreement") is made
and entered into as of this 11th day of November, 1997, among Michael Malm,
an individual ("Malm"), and Global One Distribution & Merchandising Inc., a
Delaware corporation ("Global One" or the "Company").
WHEREAS, Malm and Global One desire to document the termination of Malm's
employment with Global One and its subsidiaries;
WHEREAS, Global One desires to retain Malm, and Malm desires to act, as a
consultant to Global One; and
WHEREAS, Miller Johnson & Kuehn Incorporated, or its designee (the
"Purchaser") and Malm are entering into as Stock Purchase Agreement
("Purchase Agreement") whereby Purchaser shall purchase and Malm shall sell
1,200,000 shares (the "Shares") of Global One's common stock, $.01 par value
per share ("Common Stock") held by Malm.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. PURCHASE OF STOCK. Simultaneously with the execution of this Agreement,
the Purchaser and Malm shall execute the Purchase Agreement.
2. TERMINATION OF EMPLOYMENT.
(a) Effective on or about May 10, 1997, Malm's employment with Global
One is terminated. Also effective as of such date, Malm's position as an
officer of Global One and its subsidiaries is terminated.
(b) Except for the grant of stock options specifically acknowledged as
being vested in this Agreement, Malm's Employment Agreement, dated August
28, 1996, with Global One and OSP Publishing, Inc. (the "Employment
Agreement") is hereby terminated and of no further force or effect. Malm
waives the right to any compensation or other renumeration set forth
therein except as otherwise set forth in this Agreement.
3. MALM RELEASE.
(a) Except as provided herein, Malm hereby releases, acquits and
forever discharges Global One, and each of its affiliates, directors,
officers, shareholders, employees, attorneys, representatives and agents
(collectively, the "Global Releasees"), from any and all claims,
liabilities, demands, actions or causes of action of any kind, nature or
description
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whatsoever, whether arising at law or in equity, or upon contract or tort,
or under any state or federal law or otherwise, which Malm may have had,
may now have or made claim to have, or may in the future have or claim to
have, howsoever arising or acquired, against the Global Releasees for or
by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date hereof, whether such
claims, liabilities, demands, actions or causes of action are matured or
unmatured, known or unknown, existing or not existing, asserted or
unasserted, presently held or acquired in the future, liquidated or
unliquidated, or absolute or contingent.
(b) In connection with the foregoing release, Malm hereby waives all
rights and benefits which may be afforded to him by or under California
Civil Code Section 1542, and further acknowledges that if Malm hereafter
discovers any facts different from or in addition to those which Malm now
knows or believes to be true with respect to any of the claims or other
matter so released, then Global One's foregoing release nonetheless shall
be and remain effective in all respects. Malm acknowledges that Section
1542 of the California Civil Code provides as follows:
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.
(c) Malm represents and warrants that he has not assigned,
transferred or hypothecated or set over to any person or entity any
interest in any of the claims that are the subject of this release.
4. GLOBAL ONE RELEASE.
(a) Except as provided herein, Global One and each of its affiliates,
directors, and officers hereby release, acquit and forever discharge Malm
from any and all claims, liabilities, demands, actions or causes of action
of any kind, nature or description whatsoever, whether arising at law or in
equity, or upon contract or tort, or under any state of federal law or
otherwise, which Global One or its affiliates, or any of them, may have
had, or may now have or made claim to have, or may in the future have or
claim to have howsoever arising or acquired, against Malm for or by reason
of any act, omission, matter, cause or thing whatsoever arising from the
beginning of time to and including the date hereof, whether such claims,
liabilities, demands, actions or causes of action are matured or unmatured,
known or unknown, existing or not existing, asserted or unasserted,
presently held or acquired in the future, liquidated or unliquidated, or
absolute or contingent.
(b) In connection with the foregoing release, Global One hereby
waives all rights and benefits which may be afforded to it by or under
California Civil Code Section 1542, and further acknowledge that if Global
One hereafter discovers any facts different from or in
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addition to those which Global One now knows or believes to be true with
respect to any of the claims or other matters so released, then Global
One's foregoing release nonetheless shall be and remain effective in all
respects. Global One acknowledges that Section 1542 of the California
Civil Code provides as follows:
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.
(c) Global One represents and warrants that it has not assigned,
transferred or hypothecated or set over to any person or entity any
interest in any of the claims that are the subject of this release.
5. INDEMNIFICATION. Global One hereby agrees to save, defend, indemnify and
hold harmless Malm against any and all claims, liabilities, demands,
losses, damages, actions and causes of action, including expenses, costs
and reasonable attorneys' fees, which Malm at any time may sustain or
incur in connection with carrying out his duties as an officer, director,
shareholder, employee or consultant of Global One or its affiliates,
whether arising before or after the date of this Agreement (i.e., this
Section 5 survives the termination of this Agreement), and including
without limitation against any shareholder derivative suits (to extent
permitted by law), debts or obligations of Global One and that
certain obligation of OSP to Inotrend, Inc. that Malm has personally
guaranteed. Unless required by legal process or applicable law, Malm will
not disclose this indemnification agreement to any creditor of Global One
or its affiliates.
6. CONSULTING AGREEMENT; PAYMENTS.
(a) Malm shall provide consulting services to Global One with respect
to the sale, marketing and licensing of Global One's products, shall meet
with Global One customers, distributors and licensees as necessary,
devoting a reasonable amount of time, up to 12 days per month, at Malm's
sole discretion for a period of three months from the date of this
Agreement. Either party may terminate the consulting agreement by
providing the other party with seven days' written notice of termination.
(b) For the services describe in paragraph (a) above, Malm shall
receive payment of One Thousand Dollars ($1,000.00) per single day for each
eight- to 10-hour day of consulting services provided to Global One (a
"Work Day"); provided, however, that Malm may combine hours over two or
more days to aggregate eight hours, or one Work Day. Three Thousand Dollars
($3,000.00) per week of the pay earned under the foregoing sentence shall
be paid in advance on Monday of each week for the three months following
the date of this Agreement; provided, however, that such amounts shall not
be due for any periods following termination of the consulting agreement in
accordance with the provisions of paragraph (a)
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hereof. The amount of any payments due in excess of such guaranteed $3,000
payment shall be paid to Malm within one week following the end of the work
week.
(c) Global One shall also reimburse Malm's reasonable expenses
incurred in the performance of his consulting duties under this Agreement
consistent with Global One policy in effect on the date of this Agreement,
and upon such other terms as Malm and Global One may agree upon. Malm may
require advance payment for air and hotel travel expenses.
(d) Global One shall pay Malm Two Thousand Dollars ($2,000.00) per
month for a period of 10 months commencing one month after the date of this
Agreement as and for consideration of his general release of claims against
Global One under his Employment Agreement, whether or not the consulting
portion of this Agreement is earlier terminated.
7. CONFIDENTIALITY. Malm recognizes that his positions with Global One
and/or its affiliates are ones of the highest trust and confidence by
reason of Malm's access to and contact with trade secrets and
confidential and proprietary information of the Company. Malm agrees to
use his best efforts and exercise utmost diligence to protect and
safeguard the trade secrets and confidential and proprietary information
of the Company, including, but not limited to, any information concerning
the Company's business, finances, investments, performance, productions,
works in progress or professional relationships, and further agrees that
he will not, during the duration of this Agreement or thereafter,
disclose, disseminate or distribute, any such trade secrets or
confidential and proprietary information of Global One and/or its
affiliates, directly or indirectly neither for Malm's own benefit or the
benefit of another, except as is required in the course of Malm's
consultations on behalf of Global One. The foregoing shall not apply to
information which becomes public other than as a result of a prohibited
act of Malm. All confidential information relating to the business of
the Company, whether prepared by Malm or otherwise coming into his
possession, shall remain the exclusive property of Global One and shall
not, except in the furtherance of the business of the Company, be removed
from the premises of Global One and/or its affiliates under any
circumstances without the prior written consent of Global One. The
obligations of Malm pursuant to this paragraph shall survive the
termination of Malm's employment and consulting services for the Company
and this Agreement.
8. OWNERSHIP AND AUTHORITY OF WORK. Malm acknowledges and agrees that
Global One and/or its affiliates are and shall be the owner and author
throughout the universe of all right, title, and interest in and to any
and all creative work or materials upon which Malm performs services
hereunder (a "Work"), as the author of a work made for hire and otherwise
as the context hereof demands. All elements of each work prepared by
Malm will at all times belong solely and exclusively to Global One and/or
its affiliates for use in any manner or media now known or hereafter
devised, throughout the universe and perpetuity. Each Work shall
include, but may not be limited to, any and all materials, ideas, or
other artistic, creative and literary property created or developed by
Malm pursuant to his services (whether alone or in conjunction with any
other person), or which Malm may have disclosed to Global One
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during the term of employment or consultation with Global One and/or its
affiliates. Global One shall have the exclusive right to copyright same
in the name of Global One as an author of a work made for hire and to
exercise throughout the universe all rights of the copyright proprietor
thereunder. To the extent that any Work is deemed not a work made for
hire, Malm hereby assigns to Global One any and all rights in such Work,
including but not limited to all copyrights therein and thereto and all
renewals and extensions throughout this universe and grants to Global One
a power of attorney, irrevocable and coupled with an interest to apply
for and obtain in Global One's name all such copyrights, renewals and
extensions thereof. Global One may use and authorize others to use
Malm's likeness and biographical materials on a nonexclusive basis for
program publicity, institutional promotional purposes and any other
exploitation of a Work through any media now known or hereafter devised.
For purposes of this Agreement, each Work shall be deemed to be a work
for hire pursuant to 17 U.S.C. Section 101(2), and all authorship and
ownership rights of each Work shall belong to Global One pursuant to 17
U.S.C.Section 201(b).
9. IMAGE 2000. Notwithstanding any limitations or restrictions contained in
Section 7 or 8 above or elsewhere in this Agreement, the parties
acknowledge that Malm owns and operates Image 2000, a California
corporation ("Image"). It is understood that Image is not in a business
which would provide primary competition to Global One or its
subsidiaries, but may from time to time compete in such a way which might
be considered to violate the terms of this Agreement and/or more
specifically Sections 7 and 8. It is further agreed that Global One and
its subsidiaries and their successors and assigns hereby waive any
restrictions or conflicts with respect to Image, Malm and their
affiliates unless such results from receipt of confidential information
by Malm only through his employment with Global One during the consulting
period set forth in Section 6 hereof, or any extension thereof. Malm,
Image and their affiliates are freely able to explore, develop,
commercialize and exploit any idea which might be competitive to Global
One and its subsidiaries subject to the limitations referenced
hereinabove. Malm confirms that he will not disclose or use Global One's
confidential information learned during his employment as a consultant.
10. STOCK OPTIONS. Effective as of the date hereof, Malm's options to
purchase Common Stock previously held by Malm shall be reinstated, shall
become fully vested and the exercise price therefor shall be twenty cents
($0.20) per share. Global One shall execute new nonqualified stock option
agreements in favor of Malm on the foregoing terms.
11. OPTIONS TO PURCHASE ASSETS. Whether or not the consulting portion of
this Agreement is earlier terminated, Malm shall have the right to
require Global One to purchase (the "Sale Option") and Global One shall
have the right to purchase (the "Purchase Option") the assets of Image
2000 (the "Assets") on the terms hereinafter set forth.
(a) Within the three-month period following the date hereof, Malm
shall have the option to either exercise the Sale Option or to terminate
Global One's Purchase Option by providing written notice to Global One
within such three-month period.
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(b) In the event that Malm has neither elected to exercise the Sale
Option or terminated Global One's Purchase Option within the three-month
period following the date of this Agreement, Global One may exercise the
Purchase Option by providing Malm written notice within 30 days following
the expiration of such three-month period.
(c) The purchase price for the Assets shall be as follows:
(i) 1,200,000 shares of Common Stock;
(ii) 50% of the net after tax earnings from the Assets for
calendar years 1998 and 1999, payable within 30 days following
the issuance of Global One's final audited financial report for
each such year; and
(iii) Shares of Common Stock equal in value to two times the net
after tax earnings from the Assets for calendar years 1998 and
1999 payable within 30 days following Global One's final audit
for each such year with shares of Common Stock valued at the
closing price on the date immediately preceding the date of
issuance of such audited financial report.
(d) Malm's or Global One's notice of exercise of their respective
options shall specify a closing date for the purchase, which in no event
shall be later than 15 calendar days after the date of the notice. The
closing shall be conditioned upon, among other things, obtaining any
required third party consents and compliance with any governmental
requirements including without limitation the Bulk Sales Act. At the
closing of the purchase, Malm shall execute such documentation and take
such actions as maybe required to effect the purchase, including, without
limitation, the execution of an asset purchase agreement or bill of sale
with respect to the Assets containing standard representations, including
title to the Assets, and other provisions reasonably requested by Global
One. Any such asset purchase agreement or bill of sale shall specifically
identify the Assets in reasonable detail so that the purchase price is
readily calculable in accordance with the provisions of paragraph (c)
above. Notwithstanding the options contained in this Section 11, in the
event Malm exercises the Sale Option and both (x) Malm discontinues
employment with Global One and (y) Global One's management changes from
that existing as of the date of hereof, then Malm shall be entitled, and
Global One agrees to accept: return of the purchase price set forth in
Sections 11(c)(i), 11(c)(ii) and 11(c)(iii) to Global One and Global
One shall transfer title to the Assets to Malm.
12. PARAGRAPH HEADINGS. Paragraph and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
13. COUNTERPART EXECUTION. This Agreement may be executed in one or more
counterparts, each of which shall constitute but one and the same
instrument.
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14. SEVERABILITY. Should any portion of this Agreement be determined to
be illegal or unenforceable, all other provisions shall nevertheless
remain effective.
15. PRIOR UNDERSTANDING. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof, is
intended as a final expression of such parties' agreement with respect to
such terms as are included in the Agreement, is intended as a complete
and exclusive statement of the terms of such Agreement, and supersedes
all negotiations, stipulations, understandings, agreements,
representations and warranties, if any, with respect to such subject
matter, which precede or accompany the execution of this agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to
conflict of laws principles.
17. ATTORNEYS FEES. In the event that any action, suit, or other proceeding
is instituted concerning or arising out of this Agreement, the prevailing
party shall recover all of such party's costs, and attorneys' fees
incurred in each and every such action, suit, or other proceeding,
including any and all appeals or petitions therefrom from the
non-prevailing party. As used herein, "attorneys' fees" shall mean the
full and actual costs of any legal services actually rendered in
connection with the matters involved, calculated on the basis of the
usual fee charged by the attorneys performing such services.
18. NOTICES. Notices shall be given in writing to the parties at their
addresses set forth below. Notices shall be sent either by overnight
mail or by certified or registered mail, return receipt requested, and
shall be deemed delivered upon receipt.
If to Global One, to: Global One Distribution & Merchandising Inc.
5542 Lindbergh Lane
Bell, CA 90201
If to Malm, to: Michael Malm
3730 Multiview Drive
Hollywood, CA 90068
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
GLOBAL ONE DISTRIBUTION & MERCHANDISING INC.
By: /s/ DOUGLASS E. COY
---------------------------------------
Douglass E. Coy
Its: Chief Executive Officer
/s/ MICHAEL MALM
---------------------------------------
Michael Malm
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EXHIBIT 99.2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 11th day of November
1997, by and among Michael Malm (the "Seller") and the individuals listed on
Schedule 1 hereto (individually, a "Buyer" and collectively, the "Buyers").
For purposes of Sections 5(a) and 5(b), Buyer and Buyers shall be deemed to
include Miller, Johnson & Kuehn, Incorporated.
WHEREAS, the Seller desires to sell 1,200,000 shares of Common Stock (the
"Shares") of Global One Distribution and Merchandising Inc., a Delaware
corporation (the "Company"), and each Buyer desires to purchase the number of
Shares set forth opposite his name on Schedule 1 hereto, subject to and on
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as
follows:
1. SALE AND PURCHASE OF SHARES. Upon and subject to the terms and
conditions hereinafter set forth, and in reliance on the representations and
warranties contained herein, the Seller agrees to sell, assign and transfer
the Shares to the Buyers, and each Buyer agrees to purchase the Shares set
forth opposite his name on Schedule 1 hereto for a price of $.125 per share.
2. PURCHASE PRICE. Contemporaneously with the execution and delivery of
this Agreement, each Buyer shall pay to the Seller the amount set forth
opposite his name on Schedule 1 hereto by check payable to Buyer, and the
Seller shall deliver a stock certificate, duly endorsed for transfer, to the
Buyers, together with a letter instructing the Company's transfer agent to
transfer the Shares to the Buyers.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Buyers as follows:
The Seller is the legal and beneficial owner of the Shares free and clear
of any agreements, pledges, liens, encumbrances, claims or other restrictions
(other than restrictions pursuant to federal and state securities laws), and
has full right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Shares hereunder, and the Buyers will each
acquire legal and beneficial ownership of the Shares they purchase, free and
clear of any agreements, pledges, liens, encumbrances, claims or other
restrictions (other than restrictions pursuant to federal and state
securities laws).
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4. REPRESENTATIONS AND WARRANTS OF THE BUYERS. Each Buyer individually
represents and warrants to the Seller as follows:
(a) Each of the Buyers has full right, power and authority to enter
into this Agreement and to purchase the Shares.
(b) Each Buyer is an accredited investor, as such term is defined in
Rule 501 under the Securities Act of 1933 and is a sophisticated
purchaser, experienced in making investments of this type. Each Buyer is
purchasing the Shares for investment and not with a view toward any
resale or distribution thereof.
5. (a) SELLER'S RELEASE.
(i) Except as provided herein, the Seller hereby releases, acquits
and forever discharges the Buyers, and each of their affiliates,
directors, officers, shareholders, employees, attorneys, representatives
and agents (collectively, the "Buyer Releases"), from any and all claims,
liabilities, demands, actions or causes of action of any kind, nature or
description whatsoever, whether arising at law or in equity, or upon
contract or tort, or under any state or federal law or otherwise, which
the Seller may have had, may now have or made claim to have, or may in
the future have or claim to have, howsoever arising or acquired, against
the Buyer Releases for or by reason of any act, omission, matter, cause
or thing whatsoever arising from the beginning of time to and including
the date hereof, whether such claims, liabilities, demands, actions or
causes of action are matured or unmatured, known or unknown, existing or
not existing, asserted or unasserted, presently held or acquired in the
future, liquidated or unliquidated, or absolute or contingent.
(ii) In connection with the foregoing release, the Seller hereby
waives all rights and benefits which may be afforded to him by or under
California Civil Code Section 1542, and further acknowledges that if the
Seller hereafter discovers any facts different from or in addition to
those which the Seller now knows or believes to be true with respect to
any of the claims or other matter so released, then the foregoing release
nonetheless shall be and remain effective in all respects. The Seller
acknowledges that Section 1542 of the California Civil Code provides as
follows:
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.
(iii) The Seller represents and warrants that he has not assigned,
transferred or hypothecated or set over to any person or entity any
interest in any of the claims that are the subject of this release.
2
<PAGE>
(b) BUYERS' RELEASE.
(i) Except as provided herein, the Buyers (and each of their
affiliates, directors, and officers (to the extent such additional
parties can be bound) hereby release, acquit and forever discharge the
Seller from any and all claims, liabilities, demands, actions or causes
of action of any kind, nature or description whatsoever, whether arising
at law or in equity, or upon contract or tort, or under any state of
federal law or otherwise, which the Buyers, the Seller or its affiliates,
or any of them, may have had, or may now have or made claim to have, or
may in the future have or claim to have howsoever arising or acquired,
against the Seller for or by reason of any act, omission, matter, cause
or thing whatsoever arising from the beginning of time to and including
the date hereof, whether such claims, liabilities, demands, actions or
causes of action are matured or unmatured, known or unknown, existing or
not existing, asserted or unasserted, presently held or acquired in the
future, liquidated or unliquidated, or absolute or contingent.
(ii) In connection with the foregoing release, the buyers hereby
waive all rights and benefits which may be afforded to them by or under
California Civil Code Section 1542, and further acknowledge that if they
hereafter discover any facts different from or in addition to those which
they now know or believe to be true with respect to any of the claims or
other matters so released, then the foregoing release nonetheless shall
be and remain effective in all respects. The Buyers acknowledge that
Section 1542 of the California Civil Code provides as follows:
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.
(iii) The Buyers represent and warrant that they have not assigned,
transferred or hypothecated or set over to any person or entity any
interest in any of the claims that are the subject of this release.
6. COMPLETE AGREEMENT; WAIVER AND AMENDMENT. This Agreement contains
the complete agreement between the parties hereto with respect to the
transactions contemplated hereby. Neither this Agreement nor any provision
hereof may be amended or waived orally, but only in a statement in writing
signed by the party against which enforcement of the amendment or waiver is
sought.
7. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.
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<PAGE>
8. COUNTERPARTS. This Agreement may be executed simultaneously 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above
written.
SELLER: BUYERS:
/s/ MICHAEL MALM /s/ AARON BOXER REV TRUST
- ------------------------------ -------------------------------------
Michael Malm Print Name: Aaron Boxer Rev Trust
dtd 08/01/89
Number of Shares: 650,000
/s/ JEFFREY D. RAHM / SUSAN D. RAHM
-------------------------------------
Print Name: Jeffrey & Susan Rahm
Number of Shares: 100,000
/s/ ELDON C. MILLER
-------------------------------------
Solely for Purposes of the Releases Set Print Name: Eldon C. Miller
Forth in Sections 5(a) and 5(b) Hereof: Number of Shares: 75,000
MILLER, JOHNSON & KUEHN, /s/ STANLEY RAHM AND MARY RAHM
INCORPORATED -------------------------------------
Print Name: Stanley Rahm Trust,
Stanley & Mary Rahm TTEE
dtd 12/17/92
Number of Shares: 250,000
By: /s/ DAVID B. JOHNSON /s/ LEE WESLEY
- ----------------------------- -------------------------------------
David B. Johnson Print Name: Lee Wesley
Number of Shares: 125,000
4
