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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 )*
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Reddi Brake Supply Corporation (formerly known as Wesco Auto Parts Corporation)
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(Name of Issuer)
Common Stock, $.0001 par value
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(Title of Class of Securities)
757275 10 2
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(CUSIP Number)
John M. Liviakis, 2420 "K" St., Suite 220, Sacramento, CA 95816, (916) 448-6084
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 25, 1996
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(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).
(continued on following pages)
(Page 1 of 19 Pages)
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CUSIP No. 757275 10 2 SCHEDULE 13D Page 2 of 19 Pages
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(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Liviakis Financial Communications, Inc.
68-0311399
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
00
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
California
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(7) SOLE VOTING POWER
NUMBER OF 684,000
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 0
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH 684,000
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(10) SHARED DISPOSITIVE POWER
0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
684,000
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(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.1%
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(14) TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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1. SECURITY AND ISSUER.
The title of the class of equity securities to which this statement
relates is common stock, $0.0001 par value (the "Common Stock"), issued by Reddi
Brake Supply Corporation, a Nevada corporation formerly known as Wesco Auto
Parts Corporation (the "Corporation"). The principal offices of the Corporation
are located at 1376 Walter Street, Ventura, California 93003.
2. IDENTITY AND BACKGROUND.
This statement is filed by Liviakis Financial Communications, Inc., a
California corporation ("LFC"). LFC's principal business is as a consultant in
the areas of investor communications, financial and investor public relations
and corporate finance, and the address of LFC's principal business is 2420 "K"
Street, Suite 220, Sacramento, California 95816. LFC's President is John M.
Liviakis, its Vice President is Robert B. Prag, and its Chief Financial Officer,
Secretary and Treasurer is Renee A. Liviakis. John M. Liviakis, Robert B. Prag
and Renee A. Liviakis are LFC's directors. John M. Liviakis, Robert B. Prag, and
Renee A. Liviakis are all citizens of the United States, and their business
address is LFC's principal business address set out above.
During the last five years, none of LFC, John M. Liviakis, Robert B.
Prag, and Renee A. Liviakis has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), and during such period
none of them has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, the result of which was to
subject such person to a judgment, decree or final order enjoining further
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
3. SOURCE AND AMOUNT OF FUNDS OF OTHER CONSIDERATION.
This Schedule 13D was originally filed to report 980,000 shares of the
Corporation's Common Stock which LFC received on November 12, 1993 in
consideration of undertaking the engagement pursuant to a Consulting Agreement,
effective October 15, 1993 between the Corporation and LFC (the "Consulting
Agreement"), a copy of which is attached hereto as Exhibit "A".
On or about November 9, 1994, LFC surrendered to the Corporation for
cancellation 100,000 of such shares of Common Stock pursuant to an agreement
reached with the Corporation. Pursuant to this agreement, the Corporation agreed
to register the balance of 880,000 shares of Common Stock held by LFC for
resale, pursuant to the Securities Act of 1933.
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When the Corporation had failed so to register the 880,000 shares of
Common Stock by October 1995, LFC filed suit against the Corporation alleging
breach of contract. That litigation was settled pursuant to a Mutual Release of
All Claims between the Corporation and LFC dated March 15, 1996 (the "Mutual
Release"), a copy of which is attached hereto as Exhibit "B". In accordance with
the Mutual Release, the Corporation on or about April 9, 1996 delivered to LFC
80,000 shares of Common Stock.
4. PURPOSE OF TRANSACTION.
LFC acquired the shares of Common Stock pursuant to the Consulting
Agreement and Mutual Release with the intention to hold such securities for
investment purposes.
LFC and its officers and directors have no plans or proposals which
relate to or would result in, among other things, any extraordinary corporate
transaction to which the Corporation would be a party or by which it would be
affected; the sale or transfer of a material amount of assets of the Corporation
or any wholly owned subsidiaries; any change in the Corporation's present Board
of Directors or management; any material change in the present capitalization or
dividend policy of the Corporation; any material change in the Corporation's
business or corporate structure; any changes in the Corporation's charter,
bylaws, or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Corporation by any person; causing a class of
securities of the Corporation to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system of
a registered national securities association; causing any securities of the
Corporation to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or any
similar action.
5. INTEREST IN SECURITIES OF THE ISSUER.
As of the close of business on April 25, 1996, LFC held 684,000 shares
of Common Stock. LFC believes that these shares represented approximately 4.1%
of the shares of Common Stock issued and outstanding, based on the 16,596,996
outstanding shares reported in the Corporation's Quarterly Report on Form 10- Q
filed for the quarterly period ended March 31, 1996. LFC has the sole voting and
investment power with respect to all such shares. LFC did not engaged in any
transaction in shares of Common Stock during the 60 days preceding April 25,
1996, except for (i) the receipt on or about April 9, 1996 of the 80,000 shares
of Common Stock pursuant to the Mutual Release and (ii) the sale of 260,000
shares of Common Stock on April 25, 1996 effected by LFC in brokers'
transactions on the Nasdaq National Market System at a price of $2.10 per share.
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6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or relationships
between the persons named in Item 2 above and any person with respect to any
securities of the Corporation.
7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Consulting Agreement, dated effective as of October 15,
1993, between the Corporation and LFC.
Exhibit B - Mutual Release of All Claims between the Corporation and
LFC dated March 15, 1996.
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.
Date: May 17, 1997 LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
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By: /s/ John M. Liviakis
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John M. Liviakis, President
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EXHIBIT "A"
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of October 15, 1993 is
entered into by and between WESCO AUTO PARTS CORPORATION, a Nevada corporation
(herein referred to as the "Company") and LIVIAKIS FINANCIAL COMMUNICATIONS,
INC., a California corporation (herein referred to as the "Consultant").
RECITALS
WHEREAS, Company is a publicly held corporation with its common stock
traded on the NASDAQ over-the-counter market; and
WHEREAS, Consultant has experience in the area of investor
communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to assist
Company in its communications and public relations with existing shareholders
and brokers, dealers and other investment professionals as to the Company's
current and proposed activities; and
WHEREAS, on or before the date first set forth above, the Consultant began
to perform such services on behalf of the Company by undertaking such acts as
setting up an infrastructure for public relations activities on behalf of the
Company, speaking with analysts and investment advisory services concerning
coverage of the Company and giving the Company advice on matters of corporate
finance and strategic planning.
NOW THEREFORE, in consideration of the promises and the mutual covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Term of Consultancy. Company hereby agrees to retain the Consultant to
act in a consulting capacity to the Company, and the Consultant hereby agrees to
provide personal services to the Company, for an initial term of twenty-four
(24) months commencing upon the date first set forth above (the "Commencement
Date").
2. Duties of Consultant. The Consultant agrees to provide the following
specified consulting services through its officers and employees:
(a) Provide financial public relations and investor relations for
the Company, including the dissemination of current information concerning the
Company to relevant public markets through brokers, dealers and other investment
professionals;
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(b) Provide advice and counsel to the Company regarding its
relations with investment markets; and
(c) Provide assistance for corporate finance activities of
the Company.
3. Allocation of Time and Energies. The Consultant hereby promises to
perform and discharge well and faithfully the duties which may be assigned to it
from time to time by the officers and duly authorized representatives of the
Company in connection with the conduct of its financial and investor public
relations and communications activities, so long as such activities are in
compliance with applicable securities laws and regulations. Consultant shall
diligently and thoroughly provide the consulting services required hereunder.
Although no specific hours-per-day requirement will be required, the Consultant
and the Company agree that Consultant will perform the duties set forth
hereinabove in a diligent and professional manner. At the request of the
Company, the Consultant will inform the Company of its specific activities
concerning the Company.
4. Remuneration. As full and complete compensation for services
described in this Agreement, the Company shall compensate
Consultant as follows:
4.1 For undertaking this engagement, the Company agrees to pay the
Consultant a fee payable in 980,000 unregistered, restricted shares (the
"Shares") of the Company's Common Stock which have been determined by the
Company's Board of Directors, based on an evaluation by an independent valuation
firm, to be $1.58 per share, a discount of 45% of the bid price of the Company's
Common Stock at the close of business on October 14, 1993. The Company shall
issue the Shares to the Consultant as soon as practicable after the Commencement
Date and the Shares shall be, when issued, fully paid and non-assessable. The
Shares shall be evidenced by a stock certificate issued in the name of Liviakis
Financial Communications, Inc. and bearing the following restrictive legend:
"The shares represented by this certificate may not be
transferred before October 15, 1995 without the issuer's prior
written consent, as provided in a Consulting Agreement dated
October 15, 1993. Further, such shares have been issued
without registration under the Securities Act of 1933 (the
"Act"), or any applicable state securities laws, in reliance
upon certain exemptions therefrom. Accordingly, these shares
may not be transferred unless the issuer has received a
reasonably satisfactory opinion of counsel that such transfer
is exempt from registration under the Act and any applicable
state securities laws."
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4.2 The Consultant hereby agrees that it will not, for a period of
two years from the Commencement Date, offer, sell, contract to sell, transfer,
assign, pledge, encumber, hypothecate or otherwise dispose of or agree to
dispose of any of the Shares without the Company's prior written consent.
4.3 Consultant acknowledges that the issuance of any shares of
Common Stock pursuant to this Agreement (the "Shares") will not be registered
under the Securities Act of 1933 (the "Act"), and accordingly all shares will be
"restricted securities" within the meaning of Rule 144 of the Act. As such, the
Shares may not be resold or transferred unless the Company has received an
opinion of counsel reasonably satisfactory to the Company that such resale or
transfer is exempt from the registration requirements of the Act.
4.4 In connection with the acquisition of Shares hereunder,
the Consultant represents and warrants to the Company as follows:
(a) Consultant has received a copy of the Company's Report on
Form 10-K for the fiscal year ending June 30, 1993, as
well as a copy of the Company's Report on From 10-Q for
the quarterly period ending March 31, 1993. Consultant
acknowledges that the it has been afforded the
opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the
Company concerning an investment in the Shares, and any
additional information which he Consultant has requested.
(b) Consultant's investment in restricted securities is
reasonable in relation to its net worth, and the net
worth of its President and principal shareholder, John M.
Liviakis, which is, in each case, in excess of ten (10)
times the Consultant's cost basis in the Shares.
Consultant has had experience in investments in
restricted and publicly traded securities, and Consultant
has had experience in investments in speculative
securities and other investments which involve the risk
of loss of investment. Consultant acknowledges that an
investment in the Shares is speculative and involves the
risk of loss. Consultant has the requisite knowledge to
assess the relative merits and risks of this investment
without the necessity of relying upon other advisors, and
Consultant can afford the risk of loss of his entire
investment in the Shares.
(c) Consultant is acquiring the Shares for it's own account for
long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable
securities laws.
5. Additional Covenants of the Company. The Company shall use
its best efforts to cause the following events to occur on or
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before the contemplated Regulation S Placement referred to in Paragraph 5(f)
below:
(a) The surrender by Allen J. Sheerin of 400,000 shares of
Common Stock back to the Company for cancellation;
(b) The Company's repurchase of 1 million shares of Common Stock
from Allen J. Sheerin for $1.50 each, provided that to the extent that Section
500 of the California General Corporate Law does not permit the Company to
repurchase all of the shares referred to in Paragraphs 5(a) an 5(b) hereof on or
before the First Closing, Sheerin shall sell, and the Company shall repurchase,
any such remaining shares as soon as permitted by Section 500;
(c) The retirement by Allen J. Sheerin of 100% of his Class C
Warrants and 50% of his Class D Warrants back to the Company (assuming this
accounts for 75% of his outstanding warrants);
(d) Allen J. Sheerin's agreement to lockup all of his remaining
outstanding Common Stock, escrowed stock and stock secured from the exercise of
Class D Warrants for eighteen months with a limited ability to sell shares for
the ensuing one year;
(e) Up to 150,000 shares of Common Stock being retired to the
Company from other shareholders (friends of Sheerin);
(f) The Company's entering into an underwriting agreement
providing for a Regulation S placement on terms at least as favorable as
heretofore approved by the Consultant; and
(g) The following individuals/entities agreeing to a stock lockup
provision for 18 months (except as otherwise noted) with their lockup shares to
be placed in trust with Black & Co., Portland, Oregon, ATTN: Jeff Salzwadel:
(i) 340,000 shares of Common Stock held by "other Wesco
company shareholders", which shall include every and all Wesco
directors, officers, and insiders;
(ii) 100% of Gordon Werner's and Jay Matulich's common stock
holdings or common stock which could be derived from warrants
being held by either;
(iii) 100% (583,000 shares) of Bruce Douglas' outstanding
Common Stock will be locked up for 6 months, 66% will be
locked up for 18 months, and the 34% that will be unlocked
after 6 months will be sold in no amount greater than 16,518
shares per month (which represents 1/12 of the 34%);
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(iv) 100% of any current common stock holdings, or stock
holdings which may come about as a result of a fee paid to,
the investment banking firm indicated in the Term Sheet for
future financings(s), as well as any Common Stock derived from
the exercise of warrants currently being held or warrants that
may come about as a result of a fee paid to such firm for
future financings(s);
(v) As much "Gruntal/Private Investors" stock as
possible; and
(vi) West Covina Unit Trust ("WCUT") will agree to lock up
all of its Common Stock for 18 months, however, WCUT will
have the right to sell up to $150,000 of stock for such 18
month period.
6. Expenses. In the spirit of sparing critical working capital for the
Company, Consultant agrees to pay for all its expenses (phone, mailing, labor,
etc.), other than extraordinary items (travel, luncheons, etc.) approved by the
Company prior to its incurring an obligation for reimbursement.
7. Confidential Proprietary Information and Trade Secrets. Consultant
acknowledges that all financial information, records, documents, materials,
specifications, business or investment strategies or ideas and similar items
relating to the business of the Company (referred to herein as "Confidential
Information") whether prepared or generated by Consultant pursuant to this
Agreement or otherwise coming into the possession or knowledge of Consultant,
shall remain the exclusive, confidential property of the Company except to the
extent authorized for public dissemination by the Company. Consultant further
acknowledges and agrees that all such Confidential Information constitutes trade
secrets of the Company.
During the term of this Agreement and for a one-year period commencing
upon the termination of the Agreement, Consultant, its agent, and employees,
shall not disclose any of such Confidential Information to any third party
without the prior written consent of the Company and shall take all reasonable
steps and actions necessary to maintain the confidentiality of such Confidential
Information. Consultant, its agent, and employees, shall not use any of such
Confidential Information in competition with the Company nor with any of its
officers, directors, or affiliates or for the Consultant's financial benefit
during the term of this Agreement or during the one-year period commencing upon
termination hereof, without the Company's prior written consent.
Consultant recognizes and acknowledges that the Company's trade secrets
and business plans as they may exist from time to time are valuable, special and
unique assets of the Company's
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business, access to and knowledge of which may be essential to the performance
of the Consultant's duties hereunder. The Consultant will not, during or after
the term of this Agreement, in whole or in part, disclose such trade secrets or
business plans to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever, not shall the Consultant make use of any such
property or information for its own purposes or for the benefit of any person,
firm, corporation or other entity (except the Company) under any circumstances
during or after the term of this Agreement, provided that after the expiration
of this Agreement these restrictions shall not apply to such trade secrets and
business plans which are then, or from time to time thereafter become, in the
public domain (provided that Consultant was not responsible, directly or
indirectly, for permitting such trade secrets or confidential information to
enter the public domain without the Company's consent) or which are obtained
from a third party which is not obligated under an agreement of confidentiality
with the Company.
8. Covenants not to Interfere. The Consultant agrees that during the term
of this Agreement and for a period of two (2) years after the date of
termination of this Agreement, Consultant will not interfere with, disrupt or
attempt to disrupt the relationship, contractual or otherwise, between the
Company and any customer, supplier, lessor or employee of the Company or any of
its subsidiaries, or any of the Company' shareholders.
9. Injunctive Relief. If there is a breach or threatened breach of the
provisions of paragraphs 7 or 8 of this Agreement, the Company shall be entitled
to an injunctive relief restraining the Consultant from such breach. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies for such breach of threatened breach.
10. Other Representations. Consultant represents that he is not required to
maintain any licenses and registrations under federal or any state regulations
necessary to perform the services set forth herein. Consultant acknowledges
that, to the best of his knowledge, the performance of the services set forth
under this Agreement will not violate any rule or provision of any regulatory
agency having jurisdiction over Consultant nor do such services to the Company
represent any conflict with Consultant's other clients or business affairs.
Consultant acknowledges that to the best of his knowledge, Consultant is not the
subject of any investigation, claim, decree or judgment involving any violation
of the SEC or securities laws.
11. Indemnification. If any claim or action should be brought against the
Company by a third party as a result of the services rendered by Consultant
contemplated herein, Consultant hereby agrees to indemnify and hold the Company
harmless for all costs, expenses and liabilities resulting from any such action
of claim;
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provided, however, that the Consultant shall have no obligation to indemnify
Company for the public dissemination of information in a timely manner relating
to the Company which the Company has authorized to be disseminated to the
public.
The Company acknowledges that it has been represented by independent
legal counsel in the preparation of this Agreement. Consultant represents that
it has consulted with independent legal counsel and/or tax, financial and
business advisors, to the extent he deemed necessary.
12. Conflict of Interest. In performing the services contemplated by this
Agreement, if Consultant should at any time have a direct or indirect interest,
be it financial, professional or otherwise, in the performance of this
Agreement, Consultant hereby agrees to advise the Company of such interest
immediately.
13. Status as Independent Contractor. Consultant's engagement pursuant to
this Agreement shall be as independent contractor, and not as an employee,
officer or other agent of the Company. Neither party to this Agreement shall
represent or hold itself out to be the employer or employee of the other.
Consultant further acknowledges the compensation provided hereinabove is a gross
amount of compensation and that the Company will not withhold from such
compensation any amounts as to income taxes, social security payments or any
other payroll taxes. All such income taxes and other such payment shall be made
or provided for by Consultant and the Company shall have no responsibility or
duties regarding such matters. Neither the Company or the Consultant possess the
authority to bind each other in any agreements without the express written
consent of the entity to be bound.
14. Attorney's Fee. In the event an action is commenced between
the parties regarding the enforcement or interpretation of the
Agreement, the prevailing party shall be entitled to recover all
reasonable legal expenses including, but not limited to, attorney's
fees and court costs.
15. Waiver. The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by such other party.
16. Notices. All notices, requests, and other communications hereunder
shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:
To the Company: Wesco Auto Parts Corporation
Allen J. Sheerin, Chairman and CEO
1705 West Garvey Avenue North
West Covina, CA 91790
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To the Consultant: Liviakis Financial Communications, Inc.
John M. Liviakis, President
2113 "P" Street
Suite C
Sacramento, California 95816
17. Choice of Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of
California.
18. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the alleged breach thereof, or relating to Consultant's
activities or remuneration under this Agreement, shall be settled by binding
Arbitration in California, in accordance with the applicable rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrators shall be binding on the parties and may be entered in any court
having jurisdiction thereof.
19. Complete Agreement. This Agreement instrument contains the entire
agreement of the parties relating to the subject matter hereof. This Agreement
and its terms may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension discharge is sought.
20. Indemnification. The Company warrants and represents that all relevant
written documents or materials furnished to Consultant by the Company with
respect to financial affairs, operations, profitability and strategic planning
of the Company are accurate and Consultant may rely upon the accuracy thereof
without independent investigation. The Company will protect, indemnify and hold
harmless Consultant against any claims or litigation including any damages,
liability, cost and reasonable attorney's fees with respect thereto resulting
from Consultant's communication or
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dissemination of any said written information, documents or materials.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
"Company" WESCO AUTO PARTS CORPORATION
By: /s/ ALLEN J. SHEERIN
--------------------------------
Allen J. Sheerin
Chairman and CEO
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By: /s/ JOHN M. LIVIAKIS
--------------------------------------
John M. Liviakis
President
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EXHIBIT "B"
MUTUAL RELEASE OF ALL CLAIMS
THIS AGREEMENT, dated March 15, 1996 for reference purposes only, by
and between LIVIAKIS FINANCIAL COMMUNICATIONS, INC. ("LIVIAKIS") and REDDI BRAKE
SUPPLY CORPORATION ("REDDI BRAKE"), is made with reference to the following
facts:
A. WHEREAS, on or about October 11, 1995, LIVIAKIS commenced an
action against REDDI BRAKE entitled Liviakis Financial Communications, Inc. vs.
Reddi Brake Supply Corporation, Los Angeles Superior Court Case No. BC 136 943
(the "Action");
B. WHEREAS, on or about November 30, 1995, REDDI BRAKE filed an
Answer to the Complaint;
C. WHEREAS, on or about February 16, 1996, LIVIAKIS and REDDI
BRAKE stipulated to submit their dispute to binding arbitration, which has yet
to commence; and
D. WHEREAS, it is the mutual wish and desire of all of the
parties hereto that a full and final adjustment and settlement of all their
rights, duties, interests and claims, if any, which may exist now or in the
future, be had on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants herein contained, and other valuable consideration receipt of which is
hereby acknowledged, each party hereto covenants, agrees and promises with the
other, as follows:
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1. The foregoing recitals are incorporated by reference herein,
and by this reference expressly made a part of this Agreement.
2. Within 15 days from the execution of this Agreement, REDDI
BRAKE shall caused to be issued and delivered to LIVIAKIS 80,000 shares of REDDI
BRAKE common stock. Such shares shall be fully paid and non-assessable shares of
REDDI BRAKE's common stock and shall be evidenced by a stock certificate which
shall bear the following restrictive legend:
"THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS EITHER THE REGISTRATION
PROVISIONS OF SAID ACT AND SUCH LAWS HAVE BEEN COMPLIED WITH OR
APPLICABLE EXEMPTIONS FROM REGISTRATION ARE AVAILABLE."
3. The REDDI BRAKE shares of stock shall be registered by REDDI
BRAKE under Section 5 of the Securities Act of 1933, as amended, at no cost to
LIVIAKIS, pursuant to a registration statement that will be declared effective
as soon as practicable but in any event on or before November 30, 1996.
4. Concurrent with the delivery of the 80,000 REDDI BRAKE shares
of stock, LIVIAKIS shall deliver to REDDI BRAKE's counsel a fully executed
Request for Dismissal With Prejudice of the Action in a form substantially
identical to Exhibit "A", attached hereto.
5. Except for the obligations set forth in this Agreement, each
of the parties to this Agreement, for and on behalf of itself and its respective
principals, agents, officers, directors and affiliates, hereby releases and
absolutely forever
<PAGE> 17
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discharges each other party to this Agreement, together with its respective
principals, agents, officers, directors and affiliates, of and from any and all
debts, claims, obligations, damages, liabilities, demands, costs, expenses,
indebtedness and causes of action of every kind and nature whatsoever, whether
now known or unknown, suspected or unsuspected, fixed, conditional or
contingent, which they ever had, may now have, or may hereafter have, against
each other for any injury, damage, loss or expense (collectively, the "claims"),
whether such claims have been or could be asserted in the Action.
6. Each of the parties hereto shall, at any time hereafter, make,
execute and deliver any and all papers or documents as any party hereto may
reasonably require for the purpose of giving full effect to this Agreement and
each of its provisions.
7. Each of the parties to this Agreement expressly waive the
protections of Section 1542 of the California Civil Code, and expressly waive
and release any rights or benefits arising thereunder. Section 1542 of the
California Civil Code states:
"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".
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Page 18 of 19
8. It is further expressly understood and agreed that nothing
contained in this Agreement shall be construed as an admission by any party of
any liability to any other party hereto, with respect to any of the claims or
actions settled hereby, nor as an admission of the truth of any of the
allegations or charges made in connection with such claims or actions.
9. The covenants, conditions, promises, rights and duties
contained herein shall apply to and bind the heirs, successors, executors,
administrators, attorneys, assigns, partners, officers, directors and
shareholders of the parties hereto.
10. Should any party hereto sue to enforce any of the provisions
of this Agreement, the prevailing party shall be entitled to court costs and
reasonable attorney's fees.
11. This release contains the ENTIRE AGREEMENT and understanding
concerning the subject matter among the parties and supersedes and replaces all
prior negotiations and proposed agreements, whether written or oral. Each of the
parties hereto acknowledge that no other party, nor any agent or attorney of any
other party, has made any promise, representation or warranty whatsoever,
express or implied, not contained herein, concerning the subject matter hereof,
to induce them to execute this release, and acknowledges that each has not
executed this release in reliance upon any such promise, representation or
warranty not contained herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement
on this _____ day of March, 1996.
DATED: 4/10, 1996 LIVIAKIS FINANCIAL COMMUNICATIONS,
INC.
By: /s/ JOHN M. LIVIAKIS
-------------------------------
Its: President
DATED: 3/29, 1996 Reddi Brake Supply Corporation
By: /s/ S. GERALD BIRIN
-------------------------------
Its: Chief Financial Officer
APPROVED AS TO FORM AND CONTENT:
SHAPIRO, ROSENFELD & CLOSE
Edward M. Rosenfeld
By: /s/ EDWARD M. ROSENFELD
-----------------------------
Edward M. Rosenfeld
Attorney for Liviakis Financial
Communications, Inc.
ERVIN, COHEN & JESSUP
Allan B. Cooper
Mark T. Kawa
By: /s/ MARK T. KAWA
-----------------------------
Mark T. Kawa
Attorney for Reddi Brake Supply
Corporation
