SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) August 13, 1998
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OUT-TAKES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21322 95-4363944
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1419 Peerless Place, Suite 116, Los Angeles, CA 90035
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 788-9440
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Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
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On August 31, 1998, Out-Takes, Inc., a Delaware corporation (the "Company")
entered into a Share Purchase Agreement (the "Acquisition Agreement") whereby
the Company acquired (the "Acquisition") all of the issued and outstanding
equity interests in Los Alamos Energy, LLC, a California limited liability
company ("LAE"). The purchase price to be paid for the equity interests of LAE
is Four Million Dollars ($4,000,000), which was paid by Promissory Notes (the
"Notes") to the holders of LAE equity (the "Equity Holders") calling for
interest on all outstanding amounts to accrue at the rate of ten percent (10%)
per annum. Payments of principal and accrued interest under the Notes shall be
made monthly in arrears up to the maturity date, which is the fifth anniversary
of the Notes. The Notes may be prepaid at any time without premium or penalty.
The Acquisition Agreement provides that, in the event the Equity Holders
shall desire to do so, they may convert their indebtedness to common stock of
the Company representing in the aggregate ninety percent (90%) of the issued and
outstanding shares of such common stock as of the date of such conversion. The
Acquisition Agreement provides that it is a condition of the conversion that the
Company effect a reverse stock split of one (1) share for every one hundred
(100) shares issued and outstanding as of such date. LAE contemplates that a
significant number of persons currently holding promissory notes and/or working
interests in its electricity production (collectively, "Interest Holders") will
exercise their rights to convert such interests into the equity of LAE, and
subsequently to join in the conversion of the Notes into common stock of the
Company. Presently, management of LAE anticipates that, prior to the conversion
of the Notes and after giving effect to the contemplated reverse stock split,
the Company will issue approximately three million (3,000,000) additional shares
of common stock, and that subsequent to completing the conversion, the Equity
Holders and Interest Holders will own, in the aggregate, approximately two
million eight hundred eighty thousand (2,880,000) shares of the Company's common
stock, representing ninety percent (90%) of the total amount of common stock
estimated to be issued and outstanding as of the date such conversion rights are
exercised.
The indebtedness represented by the Notes is secured by (a) a Security
Agreement, granting a first lien and security interest upon all of the assets of
the Company; and (b) a pledge of the common stock of the Company held by Photo
Corporation Group Pty Limited, an Australian corporation, which is the
controlling stockholder of the Company. The stock pledge grants the Holders
specific rights under certain circumstances, including the right to receive
distributions made by the Company in respect of its common stock and the right
to vote the pledged shares, for so long as the Notes are in force.
The purchase price to be paid by the Company for all of the issued and
outstanding equity of LAE was negotiated based upon several factors, including,
without limitation, the asset value of LAE and its projected income from
operations based, in part, upon management's estimates of its natural gas
reserves and its current contracts.
The Company is engaged in the sale of photographic portraits of children,
adults and family groups. Prior to the acquisition, Out Takes derived
substantially all of its revenue from a retail photographic studio, called
OUT-TAKES , which opened on May 24, 1993 and is located in MCA/Universal's City
Walk project in Los Angeles, California. LAE is engaged in the collection and
distribution of natural gas from properties owned or leased by it in the State
of California, and management of LAE intends to position LAE to become an
important independent power producer, and to benefit as a principal provider of
electricity to consumers in California and elsewhere as deregulation is
implementedLAE will be operated as a wholly-owned subsidiary of the Company.
The Company will continue to operate and seek to grow its photographic business,
and LAE will continue to operate and grow its natural gas distribution business.
Management of the Company believes that the Acquisition has diversified the
revenue sources and enhanced the earnings potential of the Company on a
consolidated basis, which was the purpose of the Acquisition.
The Acquisition will be accounted for using the purchase method of
accounting.
Item 7. Financial Statements and Exhibits
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(a) Financial Statements.
It is impractical to provide the required financial statements of LAE at
the time of filing this Report. It is anticipated that such financial statements
will be filed by amendment as soon as practicable, but in no event later than
sixty (60)days following the date on which this Report must be filed, provided
that such financial statements are required under Rule 3-05 of Regulation S-X.
(b) Pro Forma Information.
It is impractical to provide the required pro forma financial information
with respect to the acquisition of LAE at the time of filing this Report. It is
anticipated that such pro forma financial statements will be filed by amendment
as soon as practicable, but in no event later than sixty (60) days following the
date on which this Report must be filed, provided that such financial statements
are required under Rule 11-01 of Regulation S-X.
(c) Exhibit Index.
Exhibit 10.31 Share Purchase agreement by and among Out-Takes, Inc. and
the Several Named Holders of Equity in Los Alamos Energy, LLC, dated as of
August 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OUT-TAKES, INC.
By: /s/ James C. Harvey
President and Acting
Chief Financial Officer
(Principal Financial and Accounting Officer)
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered into
as of the 31st day of August, 1998, by and between OUT-TAKES, INC., a
corporation duly organized and validly existing under the laws of the state of
Delaware (the "Purchaser") and the several individuals named on the signature
page of this Agreement (collectively, the "Seller").
WHEREAS, the Purchaser is a publicly-traded corporation on the OTC-Bulletin
Board under the symbol OUTT; and
WHEREAS, the Seller collectively owns all of the issued and outstanding
units of equity interest (the "Equity") in LOS ALAMOS ENERGY, LLC, a limited
liability company organized and existing under the laws of the State of
California (the "Company"); and
WHEREAS, the Purchaser desires to purchase from the Seller, and the Seller
desires to sell and convey to the Purchaser, all of the Equity in the Company,
subject to and in accordance with the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
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, intending to be legally bound, hereby agree as follows:
PURCHASE AND SALE OF THE EQUITY. Upon execution of this Agreement by both
parties, and subject to the fulfillment of all Closing Conditions (as such term
is defined below) contained in Section 7 below, the Purchaser hereby irrevocably
agrees to purchase, and the Seller agrees to sell, transfer and convey to the
Purchaser, all of the Equity in the Company outstanding as of the Closing (as
defined below). Such units of Equity, once delivered to the Purchaser as set
forth herein, shall be validly issued, fully paid and non-assessable. The
Seller may elect, in its sole discretion at any time prior to the Closing, to
convert its form of organization from a limited liability company to a
corporation, in which case each reference to the Company shall be deemed to
refer to the new corporation, and each reference to units of Equity in this
Agreement shall be deemed to refer to shares of capital of the new corporation.
CONSIDERATION TO BE PAID FOR THE EQUITY. As consideration for the Equity to be
purchased hereunder, the Purchaser shall deliver to the Seller promissory notes,
substantially in the form of Exhibit A attached hereto, totaling four million
dollars ($4,000,000) in the aggregate (collectively, the "Promissory Note").
The Promissory Note shall have a maturity of five (5) years, and shall bear
interest at the rate of ten percent (10%) per annum until paid in full. As
security for the Note, at the Closing, the Purchaser shall deliver to the Seller
a security agreement (the "Security Agreement") substantially in the form of
Exhibit B attached hereto, and a stock pledge agreement (the "Stock Pledge")
substantially in the form of Exhibit C attached hereto. The security interests
granted in the Security Agreement and the Stock Pledge shall remain in full
force and effect until the Note has been repaid in its entirety, or converted as
set forth in Section 3 below.
3. CONVERSION OPTION IN THE NOTE. The Note shall contain an option (the
"Conversion Option") to convert the indebtedness represented thereby into such
number of shares of voting common stock of the Purchaser as shall represent
ninety percent (90%) of the shares of such voting stock issued and outstanding
as of the date of conversion, on a fully-diluted basis (the "Conversion
Shares"). In the event that the Seller desires to exercise the Conversion
Option, it shall notify the Purchaser of such fact, and commence such actions
not later than ninety days from the date of the Note. Within thirty (30) days
after the Purchaser determines that the Conversion may be lawfully completed (or
such other time as is mutually agreed between the parties), there shall be a
closing of the Conversion Option (the "Conversion Closing"). At such Conversion
Closing, the Seller shall deliver to the Purchaser the Note marked Paid in Full,
and the Purchaser shall deliver to the Seller, or its nominees, a certificate or
certificates evidencing the issuance to the Seller of the Conversion Shares,
which Conversion Shares when so delivered shall be validly issued, fully paid,
and non-assessable. The Conversion Closing shall be subject to the condition
that the Purchaser shall have effected a reverse stock split of one (1) share
for every one hundred (100) shares of the Purchaser outstanding as of such date.
The Conversion Closing shall only occur if the foregoing condition has been
fully satisfied or waived prior to or simultaneously with such Conversion
Closing as set forth herein.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Each Seller hereby
represents and warrants to the Purchaser, as to himself only and not jointly, as
of the date hereof, the following:
(a) each Seller is an adult individual, and has full power and capacity to
enter into, execute, deliver and perform this Agreement in accordance with its
terms, which Agreement, once so executed and delivered by such Seller, shall be
the valid and binding obligation of such Seller, enforceable against him by any
court of competent jurisdiction in accordance with its terms;
(b) no Seller, is bound by or subject to any contract, agreement, court
order, judgment, administrative ruling, law, regulation or any other item which
prohibits or restricts such party from entering into and performing this
Agreement, or which requires the consent of any third party prior to the entry
into or performance of this Agreement, in accordance with its terms.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Seller, as of the date hereof, the following:
the Purchaser is a corporation duly organized and validly existing under the
laws of the State of Delaware, and has full power and authority to enter into
and perform this Agreement in accordance with its terms;
the individuals signing this Agreement on behalf the Purchaser are the duly
elected executive officers of the Purchaser so indicated, and have full power
and authority to execute and deliver this Agreement for and on behalf of the
Purchaser, which Agreement, once so executed and delivered, shall be the valid
and binding obligation of the Purchaser, enforceable against it by any court of
competent jurisdiction in accordance with its terms;
the Purchaser is not bound by or subject to any contract, agreement, court
order, judgment, administrative ruling, law, regulation or any other item which
prohibits or restricts such party from entering into and performing this
Agreement, or which requires the consent of any third party prior to the entry
into or performance of this Agreement, in accordance with its terms;
(d) a majority of the Purchaser's voting stock is owned by PCG, which
controls, beneficially and of record, fourteen million four hundred ten thousand
(14,410,000) shares of the Company's common stock and a beneficial interest in
another approximately eight hundred eighty five thousand (885,000) shares of
the Company's common stock (common stock being the only voting securities of the
Company outstanding as of the date hereof), on a fully-diluted basis,
representing approximately seventy-five percent (75%) of the total number of
shares of common stock issued and outstanding as of the date hereof;
(e) the Purchaser has been given every opportunity to review all documents,
and ask all questions of the Seller and the executive officers of the Company,
as it shall have requested prior to executing and delivering this Agreement to
the Seller; and
the Purchaser has been advised to consult with its attorney and tax advisor
regarding the consequences of purchasing the Equity.
INDEMNIFICATION. The parties each hereby agree that they shall be responsible
for, and shall hold harmless and indemnify the other party from and against, any
and all obligations, liabilities, losses, costs, charges, damages or expenses
(including, but not limited to, reasonable attorneys fees and court costs
incurred in defense thereof) of whatever type or nature to the extent that any
such Claim shall result from or arise out of the breach by such party of any
agreement, undertaking, representation or warranty contained in this Agreement
(including, without limitation, all exhibits and other documents entered into
pursuant hereto).
7. CLOSING. The transactions contemplated by this Agreement shall be
consummated at such location, at such time and on such date as the parties shall
mutually agree (the "Closing"). At the Closing, each Seller shall deliver to
the Purchaser a certificate evidencing his respective portion of the Equity
being acquired hereunder, and the Purchaser shall deliver to each such Seller an
originally-signed Note, evidencing such Seller's pro rata portion of the
Purchase Price, together with originally-signed copies of the Security Agreement
and the Stock Pledge, and each party shall further deliver such documents and
instruments as the other party may reasonably request to further the
transactions to be consummated at the Closing (all of such delivery items being
referred to herein as the "Closing Conditions").
8. MISCELLANEOUS PROVISIONS.
(A) NOTICES. All notices, requests, demands and other communications to be
given hereunder shall be in writing and shall be deemed to have been duly given
on the date of personal service or transmission by fax if such transmission is
received during the normal business hours of the addressee, or on the first
business day after sending the same by overnight courier service or by telegram,
or on the third business day after mailing the same by first class mail, or on
the day of receipt if sent by certified or registered mail, addressed as set
forth below, or at such other address as any party may hereafter indicate by
notice delivered as set forth in this Section 8(a):
If to the Seller: Sellers of Equity in the Company
c/o Los Alamos Energy, LLC
466 Bell Street
Los Alamos, CA 93440
Attn: Mr. Hannes Faul
Managing Member
(with a copy) to: Feldhake, August & Roquemore
600 Anton Boulevard, Suite 1730
Costa Mesa, CA 92626
Attn: Kenneth S. August, Esquire
Partner
If to the Purchaser: Out-Takes, Inc.
1419 Peerless Place
Suite 116
Los Angeles, California 90035
Attn: Mr. Peter C. Watt
President
(with a copy) to: Photo Corporation Group Pty. Limited
P.O. Box 415
Chester Hill, N.S.W. Australia 2162
Attn: Mr. Michael C. Roubicek
Group Commercial Manager
(B) BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the
binding agreement of the parties hereto, enforceable against each of them in
accordance with its terms. This Agreement shall inure to the benefit of each of
the parties hereto, and their respective successors and permitted assigns;
provided, however, that this Agreement may not be assigned (whether by contract
or by operation of law) by either party without the prior written consent of the
other party.
(C) ENTIRE AGREEMENT. This Agreement constitutes the entire and final
agreement and understanding between the parties with respect to the subject
matter hereof and the transactions contemplated hereby, and supersedes any and
all prior oral or written agreements, statements, representations, warranties or
understandings between the parties, all of which are merged herein and
superseded hereby.
(D) WAIVER. No waiver of any provision of this Agreement shall be deemed to
be or shall constitute a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
(E) HEADINGS. The headings provided herein are for convenience only and
shall have no force or effect upon the construction or interpretation of any
provision hereof.
(F) 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.
FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such other and further
documents and to perform such other and further acts as may be reasonably
necessary to carry out the purposes and provisions of this Agreement.
GOVERNING LAW; VENUE. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to the principles of conflicts of laws applied thereby.
(I) INJUNCTIVE RELIEF. Each party hereby agrees that should either party
materially breach any of its respective obligations under this Agreement,
including without limitation any exhibit or other document entered into between
the parties pursuant hereto, the non-breaching party would have no adequate
remedy at law, since the harm caused by such a breach may not be easily measured
and compensated for in damages. Accordingly, the parties agree that in addition
to such other remedies as may be available to the non-breaching party at law,
such party may also obtain injunctive or other equitable relief including, but
not limited to, specific performance, to compel the breaching party to meet its
obligations under this Agreement. All of such remedies available to any party
hereunder shall be cumulative and non-exclusive.
(J) CONFIDENTIALITY. By their execution hereof, each party hereby
acknowledges to the other that certain information furnished to it by the other
party is proprietary to such disclosing party, and neither the receiving party,
nor any affiliate, employee, officer, director, shareholder, agent or
representative of such receiving party shall have any rights to distribute or
divulge any of such Confidential Information to any third party without the
disclosing party's prior, written consent, or to use any such Confidential
Information in any way detrimental to the disclosing party or its affiliates, or
which would otherwise destroy, injure or impair any of the disclosing party's
rights in or in respect of any such Confidential Information including, without
limitation, by using of such Confidential Information to establish or assist any
person or entity which is, or will be, directly or indirectly in competition
with the disclosing party. For purposes of this Agreement, the term
"Confidential Information" shall mean any and all proprietary information
belonging to the disclosing party, whether tangible or intangible, written or
oral, including, without limitation, any non-public intellectual property
rights, trade secrets, designs, books and records, computer software and files,
and lists of (and/or information concerning) such disclosing party's financial
condition, customers, suppliers, vendors, sources, methods, techniques and other
business relationships or information.
(K) SEVERABLE PROVISIONS. The provisions of this Agreement are severable,
and if any one or more provisions is determined to be illegal, indefinite,
invalid or otherwise unenforceable, in whole or in part, by any court of
competent jurisdiction, then the remaining provisions of this Agreement and any
partially unenforceable provisions to the extent enforceable in the pertinent
jurisdiction, shall continue in full force and effect and shall be binding and
enforceable on the parties.
(L) EXHIBITS. All Schedules and Exhibits attached hereto are hereby
incorporated by reference herein as an integral part of this Agreement, with the
same force and effect as if the same had been written herein in their entirety.
SURVIVAL. The provisions of Sections 4, 5, 6 and 8(j) shall expressly survive
any expiration, termination or revocation of this Agreement by either party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
THE PURCHASER:
OUT-TAKES, INC. ATTEST:
By: /s/ By: /s/
Peter C. Watt Michael C. Roubicek
President Secretary
THE SELLER:
HANNES FAUL WITNESS:
/s/ /s/
LANCE HALL WITNESS:
/s/ /s/
THE INWOOD 1991 TRUST WITNESS:
By: /s/ /s/
James C. Harvey
Trustee
1430.002/alamos/ot-spa3
<PAGE>
EXHIBIT A TO
PURCHASE AND SALE AGREEMENT
THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER THE LAWS OF ANY STATE, AND MAY
NOT BE RESOLD, ASSIGNED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE MAKER THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
OUT-TAKES, INC.
CONVERTIBLE PROMISSORY NOTE
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$_________ August __, 1998
FOR VALUE RECEIVED, OUT-TAKES, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter referred to as the
"Maker"), hereby promises to pay to the order of
_______________________________, an adult individual residing in the County of
________, State of California (hereinafter referred to as the "Payee"), at
Payee's principal address located at ________________________, _______
California, 9____, or such other place or places as the Payee may hereafter
direct from time to time, in lawful money of the United States and in
immediately available funds, the principal sum of _____________________ DOLLARS
($_________). This Convertible Promissory Note (hereinafter referred to as the
"Note") shall accrue simple interest at the rate of ten percent (10%) per annum.
Amounts of principal and accrued interest due and payable in respect of this
Promissory Note shall be paid out of gross operating revenues, as available,
with payments to be made monthly in arrears up to ninety-nine percent (99%) of
gross revenues from operations, being applied first to accrued interest and then
to principal, with the balance due on August __, 2003 (the "Maturity Date"),
unless this Note is earlier converted in accordance with the provisions set
forth below (the "Conversion Date"). The principal amount of this Promissory
Note shall be due and payable on the Maturity Date, unless earlier converted in
accordance with the provisions set forth herein.
This Promissory Note may be converted into shares of common stock of the
Maker, having a par value of One Cent ($0.01) per share, (the "Common Stock") in
whole or in part, in the manner set forth below. Each Promissory Note shall be
convertible into such number of shares of Common Stock of the Maker as are
obtained by (a) calculating the total outstanding amount of principal and
accrued interest owed by Maker to all sellers of Los Alamos Energy, LLC
(pursuant to that certain Purchase and Sale Agreement dated as of August 31,
1998, by and between Maker and the several sellers named therein (the "Purchase
Agreement") as of the effective date of such conversion (the "Conversion Date");
(b) determining what percentage of such total amount is represented by the
indebtedness evidenced by this Note; and (c) multiplying such percentage by the
total number of Conversion Shares available (as such term is defined in the
Purchase Agreement).
The indebtedness represented by this Promissory Note constitutes senior
secured indebtedness of the Maker, and shall be senior in right of payment to
all other indebtedness of the Maker. By its execution of this Note, the Maker
represents and warrants that it is not subject to any indebtedness which would
be senior to, or pari passu with, the indebtedness to the Payee evidenced by
this Note, other than in accordance with the Purchase Agreement.
The Maker hereby agrees and covenants with the Payee that, in the event
that the Maker shall hereafter become in default under this Promissory Note, the
Maker shall not make or authorize any dividend or other distribution to
shareholders of the Maker prior to the repayment in full of any amounts
outstanding hereunder.
Upon the occurrence of either of the following specified Events of Default
(each herein called an "Event of Default"):
(i) Breach of Agreements. The Maker shall be in breach or violation, for a
period of three (3) days, of any material agreement, undertaking, obligation,
representation, warranty or statement contained in this Promissory Note, the
Purchase Agreement, or any other Exhibit or document entered into by the Maker
pursuant thereto; or
(ii) Insolvency. The Maker shall suspend or discontinue its business, or
make an assignment for the benefit of creditors or a composition with creditors,
shall file a petition in bankruptcy, shall be adjudicated insolvent or bankrupt,
shall petition or apply to any tribunal for the appointment of any custodian,
receiver, liquidator or trustee of or for it or any substantial part of its
property or assets, shall commence any proceedings relating to it under any
applicable bankruptcy, reorganization, arrangement, readjustment of debt,
receivership, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or there shall be commenced against the
Maker any such proceeding which shall remain undismissed or unstayed for a
period of forty-five (45) days or more, or any such order, judgment or decree
shall be entered, or the Maker shall by any act or failure to act indicate its
consent to, approval of or acquiescence in any such proceeding or in the
appointment of any such custodian, receiver, liquidator or trustee; or the Maker
shall take any action for the purpose of effecting any of the foregoing;
then, and in any such event, and at any time thereafter if any Event of Default
shall be continuing, the Payee may, by written notice to the Maker, declare the
entire principal of this Promissory Note, and any accrued but unpaid interest in
respect thereof, to be forthwith due and payable. The Maker hereby expressly
waives presentment, demand, protest or other notice of any kind.
This Promissory Note shall inure to the benefit of the Payee, his or her
heirs, executors, successors and permitted assigns. The obligations of the
Maker arising hereunder shall become the obligations of any successor in
interest or permitted assignee thereof, whether by contract or by operation of
law.
This Promissory Note shall be governed by and construed in accordance with
the internal laws of the State of California applicable to the enforcement and
operation of such instruments in the State, and without giving effect to the
principles of conflicts of laws which may be applied thereby. Any action
brought under or in respect of this Promissory Note shall be brought only in a
court of competent jurisdiction sitting in the County of Los Angeles, State of
California. If any suit or other proceeding shall be instituted with respect to
this Promissory Note, the prevailing party shall, in addition to such other
relief as the court may award, be entitled to recover reasonable attorneys'
fees, expenses and costs of investigation.
IN WITNESS WHEREOF, the Maker hereby sets its hand and seal in the County
of Los Angeles, State of California, as of the date and year first above
written.
THE MAKER:
OUT-TAKES, INC. ATTEST:
[SEAL]
By: _________________________ By: ____________________
Peter C. Watt Michael C. Roubicek
President Secretary
1430.002/alamos/conv-no2.doc
<PAGE>
EXHIBIT B TO PURCHASE AND SALE AGREEMENT
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is made and entered into as of
this ___th day of August, 1998 by and between OUT-TAKES, INC., a corporation
organized and existing under the laws of the State of California (the "Grantor")
and the several individuals named on the signature page of this Agreement
(collectively, the "Secured Party").
WHEREAS, the Grantor and the Secured Party have entered into that certain
Purchase and Sale Agreement, dated as of August ___, 1998 (the "Purchase
Agreement"), pursuant to which Grantor has purchased (the "Acquisition") all of
the equity securities issued and outstanding of LOS ALAMOS ENERGY, LLC, a
California limited liability company (the "Subsidiary"); and
WHEREAS, the Grantor has delivered to the Secured Party, as the Purchase
Price for the Acquisition, a Secured Promissory Note in the amount of Four
Million Dollars ($4,000,000) dated as of even date herewith (the "Note"); and
WHEREAS, in order to induce the Secured Party to accept the Note as
consideration for the Acquisition, the Grantor has agreed to provide the Secured
Party with a security interest in and first lien upon all of its assets and the
assets of the Subsidiary, and the parties now desire to enter into this
Agreement to evidence the same;
NOW, THEREFORE, in consideration of the foregoing premises and the promises
and covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
1. Grant of Security Interest. Grantor hereby assigns, conveys and grants
to Secured Party a continuing security interest in and first lien upon all of
Grantor's right, title and interest in and to all of the assets and properties
owned or used by the Grantor in the conduct of its business, or the business of
the Subsidiary, now owned or hereafter acquired at any time during the term
hereof, whether tangible or intangible, fixed, movable or fixtures, of whatever
kind or nature and wherever located, including, without limitation, all cash and
cash equivalents, securities, accounts receivable, plant and equipment,
inventory, rolling stock, materials, supplies, intellectual property rights,
contract rights, choses in action, and any proceeds from the sale, lease,
transfer or other disposition of any of such assets, whether for cash or
property (all of the foregoing being herein referred to collectively as the
"Collateral"). The security interest granted herein is intended to secure the
prompt payment, when due, of all amounts due and payable to Secured Party under
the Note including, without limitation, all principal amounts due thereunder,
all interest accrued thereon, and all applicable late charges or other fees due
under the Note, as well as the performance in full of all of Grantor's
obligations under the Purchase Agreement (collectively, the "Secured
Obligations").
2. Transfers and Other Liens. Grantor hereby acknowledges to, and agrees
with, Secured Party that for so long as this Agreement shall be in effect,
Grantor, without the prior written consent of the Secured Party, shall not:
(a) sell, assign or otherwise dispose of, any or all of the Collateral
(except in the ordinary course of business); or
(b) create or permit to exist or be created any lien, mortgage, security
interest, or other charge or encumbrance upon or with respect to the Collateral,
other than the Secured Obligations; or
(c) move the Collateral from any location other than the Grantor's principal
place of business located at the address set forth in Section 6(b) below.
Remedies Upon an Event of Default.
- ---------------------------------------
In the event that the Grantor shall fail to perform fully any Secured Obligation
on the date such performance is due, or if the Grantor should breach or be in
default of any other provision of the Note, the Purchase Agreement or this
Agreement (any of such occurrences being hereinafter referred to as an "Event of
Default"), to the extent that such Event of Default is not cured or waived
within ten (10) days after the occurrence of such Event of Default, then the
Secured Party shall be entitled to foreclose upon and take possession of the
Collateral, in satisfaction (full or partial as the case may be) of the
indebtedness owed by Grantor. Promptly after retaking possession of the
Collateral upon any such foreclosure, the Secured Party shall, after deducting
therefrom any amounts expended by the Secured Party in enforcing the Note, the
Purchase Agreement or this Agreement and/or repossessing the Collateral
(including, without limitation, the cost of reasonable attorneys' fees), remit
to the Grantor the difference between the liquidation value of the Collateral on
the date of repossession thereof and the sum of any amounts paid to the Secured
Party to purchase the Collateral in a liquidating sale. The parties hereby
agree that any such payment to Grantor upon such foreclosure may be made in
stock of the Grantor or a five (5)-year promissory note bearing interest at the
rate of ten percent (10%) per annum, or some combination thereof, as determined
in the sole discretion of the Secured Party.
The Secured Party hereby agrees with the Grantor that, in the event it shall
exercise any or all of its remedies upon an event of default set forth in Clause
3(a) above, it shall look first to satisfy all of the Secured Obligations out of
the assets of the Subsidiary, which it shall exhaust as fully as reasonably
possible prior to looking to the assets of the Grantor to satisfy any remaining
Secured Obligations.
4. Continuing Security Interest; Termination of Same.
------------------------------------------------------
(a) This Agreement shall create a continuing security interest in the
Collateral, and shall (i) remain in full force and effect until all of the
Secured Obligations of Grantor shall have been paid or performed in full; (ii)
be binding upon the Grantor, its successors and permitted assigns; and (iii)
inure to the benefit of the Secured Party and their respective successors,
heirs, executors, administrators, transferees and assigns.
(b) Upon the payment or performance in full of all Secured Obligations, and
any fees, costs and penalties owing thereon, the security interest granted
hereby shall automatically terminate. Upon any such termination, the Secured
Party shall execute and deliver to the Grantor such documents as the Grantor
shall reasonably request to evidence such termination and to effect the release
of the Collateral.
5. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, the Purchase Agreement or the Note, and no consent to any departure
by the Grantor herefrom or therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Secured Party, and then such waiver
or consent shall be effective only in the specific instance and for the express
written purpose for which given.
6. Notices. In the event that any notice or other communication is to be
sent pursuant to this Agreement, such notice shall be in writing, sent by telex
or by certified mail, return receipt requested, or by delivery in person, or by
overnight courier, addressed as follows, or to such other address as either
party may notify the other of in accordance with the provisions hereof:
if to Secured Party, to: c/o Mr. Hannes Faul
466 Bell Street
Los Alamos, CA 93440
(with a copy) to: Feldhake, August & Roquemore
600 Anton Boulevard, Suite 1730
Costa Mesa, CA 92626
Attn: Kenneth S. August, Esquire
Partner
<PAGE>
if to Grantor, to: OUT-TAKES, INC.
1419 Peerless Place
Suite 116
Los Angeles, CA 90035
Attn: Mr. Peter C. Watt
President
(with a copy) to: Photo Corporation Group
Pty. Limited
P.O. Box 415
Chester Hill, N.S.W.
Australia 2162
Attn: Mr. Michael C. Roubicek
Group Commercial Manager
All notices and other communications hereunder shall be deemed given when
telexed or delivered, or upon receipt if mailed, in accordance with this
paragraph.
7. Further Assurances. Grantor agrees to execute and deliver immediately
upon request, financing statements on Form UCC-1 for recordation with the
California Secretary of State; and (b) such other documents as may be necessary
to perfect the Secured Parties' security interests in the Collateral.
8. Entire Agreement. This Agreement, together with the Note, constitutes
the entire agreement between Grantor and Secured Party, with respect to the
subjects contained herein, and supersedes any prior agreements or
understandings, whether written or oral, express or implied.
9. Governing Law; Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflicts of law. Any action brought by any party to enforce any
of the terms or provisions of this Agreement or the note, or otherwise in
connection with or relating to this Agreement, shall be brought only in the
courts of the State of California in the county of Los Angeles, and the parties
hereby accept the exclusive jurisdiction of such courts for all disputes arising
under this Agreement, the Purchase Agreement or the Note.
10. Miscellaneous. All other provisions of the Purchase Agreement,
including, without limitation, the specific clauses setting forth the governing
law and venue of this Agreement, the right of further assurances, severability,
specific performance and other injunctive relief, and every other aspect of the
performance, interpretation relationship between the parties and other
miscellaneous provisions, are hereby incorporated herein by reference from the
Purchase Agreement, and are of force and effect as fully as if the same had been
repeated herein in their entirety.
IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly executed
and delivered as of the date first above written.
THE GRANTOR:
OUT-TAKES, INC. ATTEST:
By: _____________________ By: _____________________
Peter C. Watt Michael Roubicek
President Secretary
THE SECURED PARTY:
LOS ALAMOS ENERGY, LLC WITNESS:
By: ____________________________ By: ________________________
Hannes Faul
Managing Member
THE INDIVIDUALS: WITNESS:
_____________________ ___________________
_____________________ ___________________
1430.002/alamos/002/sec2-agt.doc
<PAGE>
EXHIBIT C TO THE PURCHASE AND SALE AGREEMENT
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement") is made and entered into as
of this ___ day of August, 1998 by and between PHOTO CORPORATION GROUP PTY
LIMITED, a corporation organized and existing under the laws of the Commonwealth
of Australia (hereinafter referred to as the "Pledgor"), and the several
individuals named on the signature page of this Agreement (collectively, the
"Pledgee").
WHEREAS, the Pledgor owns, beneficially and of record, fourteen million
four hundred ten thousand (14,410,000) shares of common stock of Out Takes,
Inc., a Delaware corporation (the "Company") and a beneficial interest in
another approximately eight hundred eighty five thousand (885,000) shares of
the Company's common stock (common stock being the only voting securities of the
Company outstanding as of the date hereof), on a fully-diluted basis,
representing approximately seventy-five percent (75%) of the total number of
shares of common stock issued and outstanding as of the date hereof (the
"Pledged Shares"); and
WHEREAS, the Company and the Pledgee have entered into that certain
Purchase and Sale Agreement, dated as of August 31, 1998 (the "Purchase
Agreement"), pursuant to which the Company has purchased (the "Acquisition") all
of the equity securities issued and outstanding of LOS ALAMOS ENERGY, LLC, a
California limited liability company (the "Subsidiary"); and
WHEREAS, the Company has delivered to the Pledgee, as the Purchase Price
for the Acquisition, a Secured Promissory Note in the amount of Four Million
Dollars ($4,000,000) dated as of even date herewith (the "Note"), which Note is
secured by the assets of the Company pursuant to that certain Security Agreement
between the parties dated as of even date herewith (the "Security Agreement");
and
WHEREAS, in order to induce the Pledgee to accept the Note as consideration
in full for the Subsidiary, the Pledgor has agreed to enter into and perform
this Agreement for the benefit of the Pledgee, subject to and in accordance with
the terms hereof.
NOW, THEREFORE, in consideration of the foregoing premises and the promises
and covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
<PAGE>
SECTION ONE
GRANT OF SECURITY INTEREST AND PLEDGE
------------------------------------------
1.01 PLEDGED COLLATERAL. The Pledgor hereby grants to the Pledgee, as
security for the prompt and full performance of all of the Company's covenants,
agreements and obligations to the Pledgee contained in the Purchase Agreement,
the Note and the Security Agreement (collectively, the "Guaranteed
Obligations"), a first perfected lien upon and security interest in and to, and
pledges, assigns and sets over to the Pledgee, all of the Pledged Shares,
together with any additional shares of any class of capital stock of the Company
hereafter acquired by the Pledgor for any reason, as well as any option, warrant
or right exercisable or exchangeable for or convertible into any such stock and,
subject to the provisions of Section 2(c) below, any cash, property or other
securities at any time and from time to time receivable or otherwise
distributable in respect thereof, exchanged therefor, derived therefrom,
substituted therefor, or otherwise subjected to the lien hereof pursuant to any
provision hereof, and the proceeds thereof (all of which Pledged Shares,
additional shares, cash, property, securities and proceeds being hereinafter
collectively referred to as the "Pledged Collateral"). Nothing in the foregoing
Section 1.01 is intended to create any pledge of or lien upon any shares of the
Series A Redeemable Preferred Stock which is to be issued to the Pledgor
subsequent to the date hereof in accordance with that certain Letter Agreement,
dated as of even date herewith, by and between the Pledgor and the Company.
1.02 POSSESSION OF PLEDGED COLLATERAL. Except as otherwise expressly
permitted herein, all certificates for the Pledged Shares, certificates for any
additional shares, dividends, cash, property and securities comprising part of
the Pledged Collateral shall be delivered by the Pledgor to the Pledgee or its
designated agent or representative upon the execution and delivery of this
Agreement, and the Pledgor shall deliver to the Pledgee proper instruments of
assignment therefor duly executed and endorsed in blank by the Pledgor and such
other instruments or documents as the Pledgee may request sufficient to transfer
the title thereto to the Pledgee or its nominee. Any Pledged Collateral which
may at any time be in the possession of the Pledgor shall be promptly delivered
to the Pledgee, and prior thereto shall be deemed to be held in trust by the
Pledgor on behalf of the Pledgee as the Pledgee's agent.
1.03 OBLIGATIONS SECURED. The security interests of Pledgee under this
agreement secure all of the Guaranteed Obligations of the Company. By their
execution hereof, the parties acknowledge and agree that all provisions,
covenants, agreements and undertakings set forth in the Purchase Agreement, the
Security Agreement and the Note are hereby incorporated into this Agreement and
are of full force and effect as fully as if repeated herein in their entirety.
SECTION TWO
GRANT OF RIGHTS TO PLEDGEE
--------------------------
So long as any Guaranteed Obligation shall remain outstanding, the parties
hereby agree that the following provisions shall remain in full force and
effect:
the Pledgee shall have the right to vote and give consents with respect to the
Pledged Shares, and any additional securities comprising a part of the Pledged
Collateral, on all matters which are subject to vote or consent by the
shareholders (or the holders of such additional securities), of the Company, and
to consent to, ratify or object to any action taken at, or waive notice of, any
meeting of the shareholders;
the Pledgee shall be entitled to receive, for its own account, any dividends,
distributions or other items received by the shareholders of the Company by
virtue of their ownership of shares, including, without limitation, any cash,
property or securities distributed to such shareholders at any time and from
time to time during the term of this Agreement, which amount shall be applied
first against accrued interest on, and then the principal balance of, the Note;
and
the Pledgee shall be entitled to exercise on behalf of the Pledgor any
subscription, exchange or conversion privileges accruing to the Pledgor by
virtue of its ownership of the Pledged Collateral, and upon such conversion,
exchange or conversion, any and all securities received by the Pledgor in
respect thereof shall automatically become and be a part of the Pledged
Collateral.
The Pledgor acknowledges to, and agrees with, the Pledgee that the provisions
contained in this Section Two are material and integral in inducing the Pledgee
to enter into and perform the Purchase Agreement and the Note, and the Pledgor
irrevocably grants the rights herein contained voluntarily and with the intent
of vesting the Pledgee with all of the rights of a shareholder in the Company,
with the same force and effect as if such Pledged Shares or other securities
were owned beneficially and of record by the Pledgee, for so long as this
Agreement remains in effect.
SECTION THREE
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR
--------------------------------------------------
3.01 INCORPORATION BY REFERENCE OF WARRANTIES IN THE PURCHASE AGREEMENT.
The Pledgor, by its execution of this Agreement, hereby makes for the benefit of
the Pledgee all of the representations and warranties contained in the Purchase
Agreement as of the date hereof, which representations and warranties are deemed
by the parties to be incorporated by reference herein and of the same force and
effect as fully as if they had been repeated in this Section 3.01 in their
entirety.
3.02 ADDITIONAL REPRESENTATIONS AND WARRANTIES. In addition to the
representations and warranties set forth above, the Pledgor hereby specifically
represents and warrants, as of the date hereof, the following:
(a) the Pledgor is the true and lawful owner, of record and beneficially, of
the Pledged Shares, free and clear of any lien, security interest, pledge,
hypothecation, charge, liability or other encumbrance (other than the lien and
security interest created herein), and such Pledged Shares have been validly
issued, fully paid and non-assessable in accordance with applicable law and the
Articles of Incorporation and Bylaws of the Company;
except as may be otherwise reflected in a legend on the face or reverse side of
the certificates evidencing ownership of the Pledged Shares, there are no legal
restrictions or limitations relating to the Pledged Shares, or the ownership or
transferability thereof by the holders thereof;
(c) the Pledged Shares represent, as of the date hereof, approximately
seventy-five percent (75%) of the total number of shares of common stock of the
Company, on a fully-diluted basis; and
(d) other than the Pledged Shares and other shares of common stock
outstanding, as of the date hereof, except as otherwise set forth on Schedule A
attached hereto, the Company has no other shares of any class of capital stock
or any other security including, without limitation, any option, warrant or
right exercisable or exchangeable for or convertible into any such shares of
stock or other securities issued and outstanding.
SECTION FOUR
RIGHTS OF THE PLEDGEE UPON DEFAULT
---------------------------------------
Upon any Event of Default under this Agreement, the Note, the Security Agreement
or the Purchase Agreement, the Pledgee shall, subject to compliance with all
requirements of applicable law, and in addition to all other rights or remedies
it may have, have the rights set forth in this Section 4:
4.01 VOTING AND OTHER RIGHTS. Immediately and without further notice,
whether or not the Pledged Collateral shall have been registered in the name of
the Pledgee or its nominee, the Pledgee shall have, with respect to the Pledged
Collateral, the right to cause title thereto to be permanently vested in itself
for all purposes, to continue to exercise all voting rights, and all other
corporate rights and all conversion, exchange, subscription or other rights,
privileges or options pertaining thereto as if it were the absolute beneficial
and record owner thereof, including, without limitation, the right to exchange
any or all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the Company, or upon
the exercise by the Company of any right, privilege, or option pertaining to any
of the Pledged Collateral and, in connection therewith, to deliver any of the
Pledged Collateral to any committee, depository, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine, all
without liability except to account for property actually received by it; but
the Pledgee shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so or
delay in so doing.
4.02 SALE OF PLEDGED COLLATERAL.
-----------------------------
(a) Upon five (5) days written notice to the Pledgor but without further
demand, advertisement or notice of any kind, all of which are hereby expressly
waived, the Pledgee shall have the right to sell, assign and deliver the whole
or any part of the Pledged Collateral, at any time or times, within or without
the State of California, at public or private sale or at any broker's board or
on any securities exchange, for cash, on credit, or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Pledgee determines to be commercially reasonable, and in connection
therewith the Pledgee at any sale may bid for or purchase the whole or any part
of the Pledged Collateral so offered for sale, free from any right of
redemption, stay or appraisal on the part of the Pledgor, all of which rights
the Pledgor hereby waives and releases, to the full extent permitted by law.
(b) (i) If at any time or times, in the opinion of the Pledgee, it
should be necessary or desirable, in order for the Pledgee to dispose of all or
any part of the Pledged Collateral in any sale or sales pursuant hereto, to
comply with or to register or qualify all or any part of the Pledged Collateral
under the Securities Act of 1933, or under any similar federal statute then in
effect, or any rules or regulations thereunder, and/or to comply with the laws
of any state regulating the sale of securities or any rules or regulations
thereunder, the Pledgor shall, upon the request (and expense) of the Pledgee, as
expeditiously as possible and in good faith, use its best efforts to cause the
Company to effect and continue such registration, qualification and/or
compliance.
(ii) Notwithstanding the foregoing, the Pledgor recognizes that the Pledgee
may be unable to effect a public sale of all or a part of the Pledged Collateral
or that it may be commercially unreasonable to do so, and may find it
appropriate or necessary to resort to one or more private sales to a restricted
group of purchasers who will be obligated to agree, among other things, to
acquire such securities for their own account, for investment and not with a
view for distribution or resale thereof. The Pledgor acknowledges that any such
private sales may be at places and on terms less favorable to the seller than if
sold at publics sales and agrees that such private sales shall be deemed to have
been made in a commercially reasonable manner, and that the Pledgee shall have
no obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act; and
(iii) The Pledgee may take all such further acts as it may in its sole
discretion deem necessary or advisable for the Pledgee's protection or for
compliance with any provision of law or regulation, even if such act might,
whether by limiting the market or by adding to the costs of sale or otherwise,
depreciate prices that might otherwise be obtained for the Pledged Collateral
being sold or otherwise restrict the net proceeds available from the sale
thereof. Upon consummation of any such sale, the Pledgee shall have the right
to assign, transfer, endorse and deliver to the purchaser or purchasers thereof
the Pledged Collateral so sold. Each such purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of the
Pledgor, and the Pledgor hereby waives, to the full extent permitted by law, all
rights of redemption, stay or appraisal which the Pledgor now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. For purposes of this Section 4.02, an agreement to sell all
or any part of the Pledged Collateral shall be treated as a sale of such Pledged
Collateral, and the Pledgee shall be free to carry out the sale of any Pledged
Collateral pursuant to any such agreement and the Pledgor shall not be entitled
to the return of any such Pledged Collateral subject thereto, notwithstanding
that after the Pledgee shall have entered into such an agreement, all Events of
Default may have been remedied.
4.03 RIGHTS CUMULATIVE. The rights and the remedies provided in this
Agreement are cumulative and in addition to any rights and remedies which the
Pledgee may have under the Purchase Agreement, the Note, the Security Agreement
or this Agreement. As used in this Agreement, the term "Event of Default" shall
have the same meaning given to it in the Security Agreement.
SECTION FIVE
APPOINTMENT OF THE PLEDGEE AS ATTORNEY-IN-FACT
---------------------------------------------------
The Pledgor hereby irrevocably constitutes and appoints the Pledgee as its
attorney-in-fact, with full power of substitution, for the purpose of carrying
out the provisions of this Agreement and taking any action and executing any
instrument which the Pledgee may deem necessary or advisable to accomplish the
purposes hereof, which appointment is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, the Pledgee shall have the
right, after the occurrence of an Event of Default, with full power of
substitution, either in the name of the Pledgee or in the name of the Pledgor to
ask for, demand, sue for, collect, review, receipt and give acquittance for any
all moneys due or to become due by virtue of any Pledged Collateral, to endorse
checks, drafts, orders and other instruments for the payment of money payable to
the Pledgor representing any interest or dividend or other distribution payable
in respect of the Pledged Collateral or any part thereof or on account thereof,
and to sell, assign, endorse, pledge, transfer and make any agreement
respecting, or otherwise deal with, the same; provided, however, that nothing
herein contained shall be construed as requiring or obligating the Pledgee to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by it, or to present or file any claim or notice, or take
any action with respect to the Pledged Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby,
and no action taken by the Pledgee or omitted to be taken with respect to the
Pledged Collateral or any part thereof shall give rise to any defense,
counterclaim or offset in favor of the Pledgor or to any claim or action against
the Pledgee, except for gross negligence or willful misconduct.
SECTION SIX
DISCHARGE OF THE PLEDGOR
---------------------------
At such time as all of the Guaranteed Obligations shall have been fully paid,
performed and otherwise satisfied, then all rights and interests in such Pledged
Collateral as shall not have been sold or otherwise applied by the Pledgee
pursuant to the terms hereof and shall still be held by it shall be transferred
and delivered, without recourse or representation to the Pledgor at the
Pledgor's expense, and the right, title and interest of the Pledgee therein
shall cease.
SECTION SEVEN
MISCELLANEOUS PROVISIONS
-------------------------
All other provisions of the Purchase Agreement, including, without limitation,
the specific clauses setting forth the governing law and venue of this
Agreement, the right of further assurances, severability, specific performance
and other injunctive relief, and every other aspect of the performance,
interpretation relationship between the parties and other miscellaneous
provisions, are hereby incorporated herein by reference from the Purchase
Agreement, and are of force and effect as fully as if the same had been repeated
herein in their entirety.
SECTION EIGHT
NOTICES
-------
In the event that any notice or other communication is to be sent pursuant to
this Agreement, such notice shall be in writing, sent by telex or by certified
mail, return receipt requested, or by delivery in person, or by overnight
courier, addressed as follows, or to such other address as either party may
notify the other of in accordance with the provisions hereof:
if to Pledgee, to: c/o Mr. Hannes Faul
466 Bell Street
Los Alamos, CA 93440
(with a copy) to: Feldhake, August & Roquemore
600 Anton Boulevard, Suite 1730
Costa Mesa, CA 92626
Attn: Kenneth S. August, Esquire
Partner
if to Pledgor, to: Photo Corporation Group Pty. Limited
P.O. Box 415
Chester Hill, N.S.W. Australia 2162
Attn: Mr. Michael C. Roubicek
Group Commercial Manager
All notices and other communications hereunder shall be deemed given when
telexed or delivered, or upon receipt if mailed, in accordance with this
paragraph.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written.
THE PLEDGOR:
PHOTO CORPORATION GROUP PTY LIMITED ATTEST:
[SEAL]
By: _________________________ By: _________________________
Peter C. Watt Michael Roubicek
President Secretary
THE PLEDGEE:
INDIVIDUALS WITNESS:
__________________________ __________________________
__________________________ __________________________
__________________________ __________________________
1430.002/alamos/pldg-ag2
