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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 1996
CINERGI PICTURES ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-23958 95-4247952
(State or other (Commission (I.R.S. Employer
jurisdiction of Incorporation) File Number) Identification No.)
2308 BROADWAY, SANTA MONICA, CA 90404
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (310) 315-6000
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On December 30, 1996 and January 2, 1997, the Company repurchased an
aggregate of 744,682 shares of Common Stock of the Company, constituting
approximately 5.2% of the 14,191,556 shares of the Company's Common Stock then
outstanding and consisting of 372,341 shares held by Dianne Caplan Lebovits, a
Director and former executive officer of the Company, and 372,341 shares held by
the law firm of Ziffren, Brittenham, Branca & Fischer ("ZBBF"), which acts as
special counsel to the Company. Harry M. Brittenham, a partner in ZBBF, is a
member of the Company's Board of Directors. Ms. Lebovits and ZBBF had each
originally acquired such shares pursuant to separate Stock Purchase Agreements
dated as of January 1, 1994 (each an "Original Purchase Agreement") and in
exchange for payment of the aggregate par value of such shares in cash and a
full recourse secured promissory note in the principal amount of $450,000 (each
a "Purchase Note"). Ms. Lebovits subsequently split her Purchase Note into two
separate notes (the "Purchase Notes") each secured by different collateral.
Pursuant to the terms of the repurchase, in consideration for the sale by ZBBF
of the 372,341 shares to the Company, the Company canceled the Purchase Note of
ZBBF under which $450,000 was then outstanding. Pursuant to the terms of Ms.
Lebovits' Original Purchase Agreement, 51,714 shares of the Common Stock held by
Ms. Lebovits which were not vested at the time of her resignation as Executive
Vice President, General Counsel and Corporate Secretary of the Company on August
15, 1996, were repurchased at the original purchase price (approximately $1.21
per share) by reducing the aggregate balance due under her Purchase Notes by
approximately $62,500. In consideration for the sale by Ms. Lebovits to the
Company of the other 320,627 shares repurchased, the Company canceled the
remaining balances of her Purchase Notes under which approximately $468,000 was
then outstanding (after the $62,500 reduction). As a result of the stock
repurchases, as of January 3, 1997, there were an aggregate of 13,446,874 shares
of the Company's common stock outstanding.
The Company and Warren Braverman, the Company's Chief Operating Officer,
Chief Financial Officer and Executive Vice President and a member of the
Company's Board of Directors, have agreed to amend Mr. Braverman's employment
agreement to extend the term of his employment (due to expire December 31, 1997)
for two years, until December 31, 1999. Pursuant to an amendment to his
employment agreement dated as of January 1, 1997 (the "Amendment"), Mr.
Braverman will receive an annual base salary of $584,000 in 1998 and $613,000 in
1999. Under the existing agreement, Mr. Braverman's annual base salary in 1997
is $556,000. Pursuant to the Amendment, Mr. Braverman also received a signing
bonus of $600,000 of which $300,000 was used to fully repay two loans previously
made by the Company to Mr. Braverman (a $250,000 loan bearing interest at 7% per
annum, which matured December 31, 1996 and under which $250,000 was outstanding
as of such date, and a $50,000 interest free loan maturing September 30, 1997).
The Amendment also eliminated the requirement that Mr. Braverman mitigate his
damages in the event he is entitled under the employment agreement to terminate
his employment. The remaining terms of his existing employment agreement
(including the incentive compensation provisions) were not altered by the
Amendment.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
The Exhibits listed below are filed as part of this Report.
Exhibit No. Description of Exhibit
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10.1 Stock Purchase Agreement dated as of January 2, 1997 by and
between Ziffren, Brittenham, Branca & Fischer and the
Company.
10.2 Stock Purchase Agreement dated as of December 30, 1996 by
and between Dianne Caplan Lebovits and the Company.
10.3 Amendment to Restated Employment Agreement of Warren
Braverman, dated as of January 1, 1997 by and between Warren
Braverman and the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CINERGI PICTURES ENTERTAINMENT INC.
By: /s/ Warren Braverman
----------------------------------------------
Name: Warren Braverman
Title: Chief Operating Officer, Chief
Financial Officer and Executive Vice
President
Date: January 7, 1997
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
10.1 Stock Purchase Agreement dated as of
January 2, 1997 by and between Ziffren,
Brittenham, Branca & Fischer and the
Company. . . . . . . . . . . . . . . . . . . . . . . . . .6
10.2 Stock Purchase Agreement dated as of
December 30, 1996 by and between Dianne
Caplan Lebovits and the Company. . . . . . . . . . . . . 13
10.3 Amendment to Restated Employment
Agreement of Warren Braverman, dated as
of January 1, 1997 by and between Warren
Braverman and the Company. . . . . . . . . . . . . . . . 21
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the 2nd day of January, 1997, by and between Ziffren, Brittenham, Branca &
Fischer ("Seller") and Cinergi Pictures Entertainment Inc., a Delaware
corporation ("Purchaser").
R E C I T A L S:
WHEREAS, pursuant to that certain Stock Sale and Repurchase Agreement dated
as of January 1, 1994 by and between Purchaser and Seller, Seller acquired six
shares of the Purchaser's common stock;
WHEREAS, Seller paid for such shares by paying an amount in cash equal to
the aggregate par value of such shares and by issuing to Purchaser a Secured
Recourse Promissory Note (the "Note") in the principal amount of $450,000,
bearing interest at the rate of 6% per annum and secured in accordance with that
certain Security and Stock Pledge Agreement, dated as of January 1, 1994, by and
between Purchaser and Seller (the "Security Agreement");
WHEREAS, pursuant to a subsequent stock split, the six shares of
Purchaser's common stock acquired by Seller were converted into 372,341 shares
of Purchaser's common stock (the "Shares"), which continue to be owned by Seller
and constitute the only shares of Purchaser's common stock owned by Seller; and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase all of
the Shares on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the representations, warranties, conditions and promises
hereinafter contained, the parties hereto hereby agree as follows:
A G R E E M E N T:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions set
forth herein, at the Closing (as hereinafter defined) Seller shall sell the
Shares to the Purchaser free and clear of all encumbrances (other than the
security interest granted to Purchaser pursuant to the Security Agreement), and
Purchaser shall purchase all of the Shares.
1.2 PURCHASE PRICE. Subject to and on the terms and conditions of this
Agreement, Purchaser shall pay Seller a price of $450,000 for all of the Shares
(the "Purchase Price"), which constitutes the total amount due, principal and
all accrued interest, under the Note. Purchaser and Seller agree that the
Purchase Price shall be paid by canceling the Note, in full consideration for
the sale of the Shares to the Purchaser.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this Agreement, Seller
hereby makes the following representations and warranties to Purchaser, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date (as hereinafter defined).
2.1 OWNERSHIP. Seller is the record and beneficial owner of all of the
Shares and has good and marketable title to the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement).
2.2 AUTHORIZATION AND ENFORCEABILITY.
(a) The execution, delivery and performance of this Agreement (and
all other documents, instruments and agreements executed in connection herewith)
by Seller has been duly authorized by all necessary partnership action on the
part of Seller. This Agreement and all other documents, instruments and
agreements executed by Seller in connection herewith constitute its legally
valid and binding agreements, enforceable against Seller in accordance with
their respective terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforceability of creditors' rights generally, or by
general equitable principles.
(b) Seller has the full and unqualified legal right, power and
authority to sell, transfer, assign and convey to Purchaser complete and
absolute legal and equitable title to all of the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement). On the Closing Date, upon consummation of the
transactions contemplated hereby, the Purchaser will acquire complete and
absolute legal, equitable, good, valid and marketable title to all of the
Shares, free and clear of all encumbrances.
2.3 NO VIOLATIONS. The execution, delivery and other performance by
Seller of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Seller of the
transactions contemplated hereby, do not and will not (i) constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) any provision of any material contract to which Seller is a party or by
which it may be bound; (ii) result in the creation or imposition of any
encumbrance upon, or give to any third person any interest in or right to, any
of the Shares; or (iii) constitute a violation of any provision of Seller's
partnership agreement.
2.4 BROKERS. There is no person acting on behalf of Seller who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
2.5 ACCREDITED INVESTOR; INVESTOR KNOWLEDGE. Seller represents that it is
an "accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act of 1933, as amended. Seller represents that, by reason of its
business and financial experience, it
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has such knowledge, sophistication and experience in business and financial
matters as to be capable of evaluating the merits and risk of the sale of Shares
contemplated by this Agreement.
2.6 ACCESS TO INFORMATION. Seller acknowledges that it has received all
the information that it has requested from Purchaser about Purchaser in order to
make an informed decision with respect to its sale of the Shares. Seller
represents and warrants that it and its accountants, counsel, financial advisers
and other representatives have been given reasonable access to all relevant
information and records of Purchaser and that it has been given adequate
opportunities to obtain any additional information and documents relating to the
sale of the Shares and to ask questions and receive answers about all of the
foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to Seller to enter into this Agreement, Purchaser
hereby makes the following representations and warranties to Seller, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date.
3.1 BROKERS. There is no person acting on behalf of Purchaser who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
3.2 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement (and all other documents, instruments and
agreements executed in connection herewith) by Purchaser has been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement and all other documents, instruments and agreements executed by
Purchaser in connection herewith constitute its valid and legally binding
agreements, enforceable against Purchaser in accordance with their respective
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforceability of creditors' rights generally, or by general
equitable principles.
3.3 NO VIOLATIONS. The execution, delivery and other performance by
Purchaser of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Purchaser of the
transactions contemplated hereby, do not and will not constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) its Certificate of Incorporation or Bylaws.
ARTICLE IV
CLOSING; OBLIGATIONS AT CLOSING
4.1 CLOSING. The closing for the consummation of the transactions
contemplated by this Agreement (the "Closing") shall occur at such date
("Closing Date") and time as may be mutually agreed upon by the parties;
provided, however, that the Closing shall take place on the date of this
Agreement or within fifteen (15) days thereafter, unless the parties shall
otherwise agree.
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4.2 OBLIGATIONS AT CLOSING.
4.2.1 SELLER'S OBLIGATIONS. Seller shall deliver to Purchaser at
the Closing the following:
(a) Stock Certificate No. 2006 (the "Stock Certificate")
representing all of the Shares with a separate stock assignment executed in
blank, in form reasonably acceptable to the Purchaser, together with any
documentary stamps required in connection with such transfer or such other
appropriate documents and instruments of transfer as Purchaser may reasonably
request. Purchaser hereby acknowledges that, pursuant to the Security
Agreement, it currently holds the Stock Certificate.
(b) All other agreements, certificates, instruments and
documents reasonably requested by Purchaser in order to fully consummate the
transactions contemplated hereby and carry out the purposes and intent of this
Agreement.
4.2.2 PURCHASER'S OBLIGATIONS TO SELLER AT CLOSING. Purchaser
shall deliver to Seller at the Closing the following:
(a) The original Note marked canceled, which shall constitute
payment in full of the Purchase Price.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 CONDITIONS PRECEDENT. The obligations of the Purchaser and the Seller
under this Agreement are subject to the satisfaction on or before the Closing
Date of the following conditions:
5.1.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Seller and Purchaser herein shall be true and correct on and
as of the Closing Date and shall not have been false or misleading in any manner
on the date hereof.
5.1.2 PERFORMANCE OF TERMS AND CONDITIONS. All of the terms and
conditions of this Agreement to be satisfied or performed by Seller and
Purchaser on or before the Closing, including the deliveries required to be made
at Closing, shall have been satisfied or performed.
5.1.3 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments and other documents delivered or in accordance with
this Agreement shall be reasonably satisfactory to the party or parties to whom
they are to be so delivered.
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ARTICLE VI
TERMINATION AND WAIVER
6.1 TERMINATION GENERALLY. This Agreement may, by notice given prior to
the Closing, be terminated and abandoned by mutual written consent of the
parties hereto.
6.2 WAIVER OR MODIFICATION OF AGREEMENT. Notwithstanding any provision to
the contrary, any party hereto which is entitled to the benefits of this
Agreement may, and has the right to, waive in writing its rights or benefits of
any term or condition hereof at any time prior to, on or after the Closing Date.
ARTICLE VII
INDEMNIFICATION AND RELEASE
7.1 SELLER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Seller shall indemnify and hold harmless Purchaser and its respective successors
and assigns, officers, directors, shareholders, employees, advisors and agents,
from and against any and all proceedings, judgments, obligations, losses,
damages, deficiencies, settlements, assessments, charges, costs and expenses
(including without limitation reasonable attorneys' fees, paralegals' fees,
investigation expenses, court costs, interest and penalties) arising out of or
in connection with, or caused by, directly or indirectly, any or all of the
following:
7.1.1 Any misrepresentation, breach or failure of any warranty or
representation made by Seller in this Agreement or pursuant hereto.
7.1.2 Any failure or refusal by Seller to satisfy or perform any
term or condition of this Agreement to be satisfied or performed by Seller.
7.2 PURCHASER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Purchaser shall indemnify and hold harmless Seller and its partners, successors
and assigns, from and against any and all proceedings, judgments, obligations,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses (including without limitation reasonable attorneys' fees, paralegals'
fees, investigation expenses, court costs, interest and penalties) arising out
of or in connection with, or caused by, directly or indirectly, any or all of
the following:
7.2.1 Any misrepresentation, breach or failure of any warranty or
representation made by Purchaser in this Agreement or pursuant hereto.
7.2.2 Any failure or refusal by Purchaser to satisfy or perform
any term or condition of this Agreement to be satisfied or performed by
Purchaser.
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ARTICLE VIII
MISCELLANEOUS
8.1 ASSIGNMENT. The respective rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent
of the other parties. This Agreement shall inure solely to the benefit of, and
be binding upon, the parties hereto.
8.2 NOTICES. All notices, consents, requests, claims, demands,
instructions or other communications given or made hereunder by the Purchaser or
Seller shall be in writing and personally delivered or transmitted by registered
or certified mail, postage prepaid, return receipt request, or by telex or
facsimile to the parties at the following addresses:
If to Purchaser, to:
Cinergi Pictures Entertainment Inc.
2308 Broadway
Santa Monica, CA 90404-2916
Attention: Warren Braverman
Fax No. (310) 828-3861
If to Seller, to:
Ziffren, Brittenham, Branca & Fischer
2121 Avenue of the Stars
Thirty-Second Floor
Los Angeles, California 90067
Attention: Harry M. Brittenham
or to such other person or address as any party may from time to time designate
by notice to the others. All such notices, consents, requests, claims, demands,
instructions and other communications shall be deemed to have been received on
the date of personal delivery, telex or facsimile or on the date of receipt if
mailed.
8.3 ENTIRE AGREEMENT. This Agreement and the other agreements and
documents referred to herein set forth the entire understanding of the parties
relating to the subject matter hereof and supersede all prior agreements and
understandings, whether oral or written.
8.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California regardless of the law of
choice of law, or conflicts of law, of that or any other jurisdiction.
8.5 FURTHER ASSURANCES. At any time and from time to time after the
Closing Date, at Purchaser's request and without further consideration, Seller
shall promptly execute and deliver all such further agreements, certificates,
instruments and documents and perform such further actions that the Purchaser
may reasonably request, in order to fully consummate the transactions
contemplated hereby and carry out the purposes and intent of this Agreement.
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8.6 AMENDMENT; WAIVER. No attempted amendment, modification, termination,
discharge or change of this Agreement shall be valid and effective, unless the
parties shall unanimously agree in writing to such amendment. No waiver of any
provision of this Agreement shall be effective unless it is in writing and
signed by the party against whom it is asserted, and any such written waiver
shall only be applicable to the specific instance to which it relates and shall
not be deemed to be a continuing or future waiver.
8.7 SECURITY AGREEMENT. Effective as of the Closing Date, pursuant to
Section 10.1 of the Security Agreement, the Obligations (as such term is defined
in the Security Agreement) shall be deemed terminated and the Security Agreement
shall terminate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PURCHASER:
CINERGI PICTURES
ENTERTAINMENT INC.
By: /s/ Warrren Braverman
--------------------------------------------
Name: Warren Braverman
Title: Chief Financial Officer
SELLER:
ZIFFREN, BRITTENHAM, BRANCA & FISCHER
By: /s/ Kenneth Ziffren
---------------------------------------------
Name: Kenneth Ziffren
Title: Partner
By his signature below, the undersigned (i) acknowledges that he has read,
understands and agrees to the foregoing Agreement, (ii) agrees to waive any
rights he may have to purchase the Shares pursuant to that certain letter
agreement dated April 27, 1994 between Cinergi Pictures Entertainment Inc. and
Ziffren, Brittenham, Branca & Fischer (the "Letter Agreement"), and (iii) agrees
that the Letter Agreement and any rights of the undersigned thereunder shall
hereby terminate.
/s/ Andrew G. Vajna
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Andrew G. Vajna
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the 30th day of December, 1996, by and between Dianne Caplan Lebovits
("Seller") and Cinergi Pictures Entertainment Inc., a Delaware corporation
("Purchaser").
R E C I T A L S:
WHEREAS, pursuant to that certain Stock Sale and Repurchase Agreement
("Stock Agreement") dated as of January 1, 1994 by and between Purchaser and
Seller, Seller acquired six shares of the Purchaser's common stock;
WHEREAS, Seller paid for such shares by paying an amount in cash equal to
the aggregate par value of such shares and by issuing to Purchaser a Secured
Recourse Promissory Note (the "Old Note") in the principal amount of $450,000,
bearing interest at the rate of 6% per annum and secured in accordance with that
certain Security and Stock Pledge Agreement, dated as of January 1, 1994, by and
between Purchaser and Seller (the "Old Security Agreement");
WHEREAS, pursuant to a subsequent stock split (the "Stock Split"), the six
shares of Purchaser's common stock acquired by Seller were converted into
372,341 shares of Purchaser's common stock (the "Shares"), which continue to be
owned by Seller;
WHEREAS, Seller retired a portion of the Old Note by issuing a full
recourse note (the "New Note"; the Old Note and the New Note being sometimes
collectively referred to herein as the "Notes") in the principal amount of
$242,000, bearing interest at the rate of 6% per annum and secured in accordance
with that certain Security and Pledge Agreement, dated as of February 28, 1995,
by and between Purchaser and Seller which granted to Purchaser a security
interest in certain marketable securities (the "New Security Agreement");
WHEREAS, after the issuance of the New Note, the Old Security Agreement
only applied to 186,170 of the Shares;
WHEREAS, Seller resigned her employment with the Purchaser on August 15,
1996;
WHEREAS, pursuant to Section 4(a)(i) of the Stock Agreement, any non-vested
Shares (as described therein) are to be repurchased by the Purchaser if Seller
ceases to be employed by the Purchaser at the price originally paid ($1.20856953
per share after giving effect to the Stock Split) and such price is to be paid
by first applying such price to the balance due under the Notes;
WHEREAS, at the date of Seller's resignation, 51,714 Shares were not
considered vested; and
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WHEREAS, Seller desires to sell, and Purchaser desires to purchase all of
the Shares on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the representations, warranties, conditions and promises
hereinafter contained, the parties hereto hereby agree as follows:
A G R E E M E N T:
ARTICLE I
SALE AND PURCHASE OF SHARES
1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions set
forth herein, at the Closing (as hereinafter defined) Seller shall sell the
Shares to the Purchaser free and clear of all encumbrances (other than the
security interest granted to Purchaser pursuant to the Old Security Agreement),
and Purchaser shall purchase all of the Shares.
1.2 PURCHASE PRICE. Subject to and on the terms and conditions of this
Agreement, Purchaser shall pay Seller as follows:
1.2.1 NON-VESTED SHARES. Pursuant to Section 4(a)(i) of the Stock
Agreement, Purchaser shall pay to Seller for the purchase of 51,714 of the
Shares (constituting the non-vested Shares), the purchase price of $62,500. In
accordance with the Stock Agreement, such amount shall be paid by reducing the
balance due under the Notes.
1.2.2 VESTED SHARES. Purchaser shall pay to Seller for the
purchase of 320,627 of the Shares (constituting all of the Shares other than the
non-vested Shares), the purchase price of $468,426 (which constitutes the total
remaining amount due, principal and all accrued interest, under the Notes after
the reduction set forth in Section 1.2.1). Purchaser and Seller agree that such
purchase price shall be paid by delivering the Notes (marked canceled) to Seller
in exchange for the applicable Shares.
Collectively, the amounts due under Sections 1.2.1 and 1.2.2 shall be
referred to herein as the "Purchase Price", and payment of the Purchase Price in
accordance with Sections 1.2.1 and 1.2.2 shall constitute full consideration for
the sale of the Shares to Purchaser.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Purchaser to enter into this Agreement, Seller
hereby makes the following representations and warranties to Purchaser, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date (as hereinafter defined).
2.1 OWNERSHIP. Seller is the record and beneficial owner of all of the
Shares and has good and marketable title to the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement).
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2.2 AUTHORIZATION AND ENFORCEABILITY.
(a) This Agreement (and all other documents, instruments and
agreements executed in connection herewith by Seller) has been duly executed and
delivered by Seller. This Agreement and all other documents, instruments and
agreements executed by Seller in connection herewith constitute Seller's legally
valid and binding agreements, enforceable against Seller in accordance with
their respective terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforceability of creditors' rights generally, or by
general equitable principles.
(b) Seller has the full and unqualified legal right, power and
authority to sell, transfer, assign and convey to Purchaser complete and
absolute legal and equitable title to all of the Shares, free and clear of any
encumbrances (other than the security interest granted to Purchaser pursuant to
the Security Agreement). On the Closing Date, upon consummation of the
transactions contemplated hereby, the Purchaser will acquire complete and
absolute legal, equitable, good, valid and marketable title to all of the
Shares, free and clear of all encumbrances.
2.3 NO VIOLATIONS. The execution, delivery and other performance by
Seller of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Seller of the
transactions contemplated hereby, do not and will not (i) constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) any provision of any material contract to which Seller is a party or by
which it may be bound; or (ii) result in the creation or imposition of any
encumbrance upon, or give to any third person any interest in or right to, any
of the Shares.
2.4 BROKERS. There is no person acting on behalf of Seller who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
2.5 ACCREDITED INVESTOR; INVESTOR KNOWLEDGE. Seller represents that she
is an "accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act of 1933, as amended. Seller represents that, by reason of her
business and financial experience, she has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risk of the sale of Shares contemplated by this Agreement.
2.6 ACCESS TO INFORMATION. Seller acknowledges that she has received all
the information that she has requested from Purchaser about Purchaser in order
to make an informed decision with respect to her sale of the Shares. Seller
represents and warrants that she and her accountants, counsel, financial
advisers and other representatives have been given reasonable access to all
relevant information and records of Purchaser and that she has been given
adequate opportunities to obtain any additional information and documents
relating to the sale of the Shares and to ask questions and receive answers
about all of the foregoing.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to Seller to enter into this Agreement, Purchaser
hereby makes the following representations and warranties to Seller, each of
which are made as of the date hereof, and shall be deemed made again as of the
Closing Date.
3.1 BROKERS. There is no person acting on behalf of Purchaser who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement and the consummation of the
transactions contemplated hereby.
3.2 AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement (and all other documents, instruments and
agreements executed in connection herewith) by Purchaser has been duly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement and all other documents, instruments and agreements executed by
Purchaser in connection herewith constitute its valid and legally binding
agreements, enforceable against Purchaser in accordance with their respective
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforceability of creditors' rights generally, or by general
equitable principles.
3.3 NO VIOLATIONS. The execution, delivery and other performance by
Purchaser of this Agreement and all other documents, instruments and agreements
executed in connection herewith, and the consummation by Purchaser of the
transactions contemplated hereby, do not and will not constitute a material
violation of or default under (either immediately, upon notice or upon lapse of
time) its Certificate of Incorporation or Bylaws.
ARTICLE IV
CLOSING; OBLIGATIONS AT CLOSING
4.1 CLOSING. The closing for the consummation of the transactions
contemplated by this Agreement (the "Closing") shall occur at such date
("Closing Date") and time as may be mutually agreed upon by the parties;
provided, however, that the Closing shall take place on the date of this
Agreement or within fifteen (15) days thereafter, unless the parties shall
otherwise agree.
4.2 OBLIGATIONS AT CLOSING.
4.2.1 SELLER'S OBLIGATIONS. Seller shall deliver to Purchaser at
the Closing the following:
(a) Stock Certificate No. 2005 (the "Stock Certificate")
representing all of the Shares with a separate stock assignment executed in
blank, in form reasonably acceptable to the Purchaser, together with any
documentary stamps required in connection with such transfer or such other
appropriate documents and instruments of transfer as Purchaser may
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reasonably request. Purchaser hereby acknowledges that, pursuant to the
Security Agreement, it currently holds the Stock Certificate.
(b) All other agreements, certificates, instruments and
documents reasonably requested by Purchaser in order to fully consummate the
transactions contemplated hereby and carry out the purposes and intent of this
Agreement.
4.2.2 PURCHASER'S OBLIGATIONS TO SELLER AT CLOSING. Purchaser
shall deliver to Seller at the Closing the following:
(a) The Notes each marked canceled, which shall constitute
payment in full of the Purchase Price.
(b) A release of the security interest which had been granted
pursuant to the New Security Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 CONDITIONS PRECEDENT. The obligations of the Purchaser and the Seller
under this Agreement are subject to the satisfaction on or before the Closing
Date of the following conditions:
5.1.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of Seller and Purchaser herein shall be true and correct on and
as of the Closing Date and shall not have been false or misleading in any manner
on the date hereof.
5.1.2 PERFORMANCE OF TERMS AND CONDITIONS. All of the terms and
conditions of this Agreement to be satisfied or performed by Seller and
Purchaser on or before the Closing, including the deliveries required to be made
at Closing, shall have been satisfied or performed.
5.1.3 APPROVAL OF DOCUMENTATION. The form and substance of all
certificates, instruments and other documents delivered or in accordance with
this Agreement shall be reasonably satisfactory to the party or parties to whom
they are to be so delivered.
ARTICLE VI
TERMINATION AND WAIVER
6.1 TERMINATION GENERALLY. This Agreement may, by notice given prior to
the Closing, be terminated and abandoned by mutual written consent of the
parties hereto.
6.2 WAIVER OR MODIFICATION OF AGREEMENT. Notwithstanding any provision to
the contrary, any party hereto which is entitled to the benefits of this
Agreement may, and has the right to, waive in writing its rights or benefits of
any term or condition hereof at any time prior to, on or after the Closing Date.
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ARTICLE VII
INDEMNIFICATION AND RELEASE
7.1 SELLER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Seller shall indemnify and hold harmless Purchaser and its respective successors
and assigns, officers, directors, shareholders, employees, advisors and agents,
from and against any and all proceedings, judgments, obligations, losses,
damages, deficiencies, settlements, assessments, charges, costs and expenses
(including without limitation reasonable attorneys' fees, paralegals' fees,
investigation expenses, court costs, interest and penalties) arising out of or
in connection with, or caused by, directly or indirectly, any or all of the
following:
7.1.1 Any misrepresentation, breach or failure of any warranty or
representation made by Seller in this Agreement or pursuant hereto.
7.1.2 Any failure or refusal by Seller to satisfy or perform any
term or condition of this Agreement to be satisfied or performed by Seller.
7.2 PURCHASER'S OBLIGATION TO INDEMNIFY. From and after the Closing Date,
Purchaser shall indemnify and hold harmless Seller and her successors and
assigns, from and against any and all proceedings, judgments, obligations,
losses, damages, deficiencies, settlements, assessments, charges, costs and
expenses (including without limitation reasonable attorneys' fees, paralegals'
fees, investigation expenses, court costs, interest and penalties) arising out
of or in connection with, or caused by, directly or indirectly, any or all of
the following:
7.2.1 Any misrepresentation, breach or failure of any warranty or
representation made by Purchaser in this Agreement or pursuant hereto.
7.2.2 Any failure or refusal by Purchaser to satisfy or perform
any term or condition of this Agreement to be satisfied or performed by
Purchaser.
ARTICLE VIII
MISCELLANEOUS
8.1 ASSIGNMENT. The respective rights and obligations of the parties
under this Agreement shall not be assignable without the prior written consent
of the other parties. This Agreement shall inure solely to the benefit of, and
be binding upon, the parties hereto.
8.2 NOTICES. All notices, consents, requests, claims, demands,
instructions or other communications given or made hereunder by the Purchaser or
Seller shall be in writing and personally delivered or transmitted by registered
or certified mail, postage prepaid, return receipt request, or by telex or
facsimile to the parties at the following addresses:
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If to Purchaser, to:
Cinergi Pictures Entertainment Inc.
2308 Broadway
Santa Monica, CA 90404-2916
Attention: Warren Braverman
Fax No. (310) 828-3861
If to Seller, to:
Dianne Caplan Lebovits
10318 Glenbarr Avenue
Los Angeles, CA 90064
or to such other person or address as any party may from time to time designate
by notice to the others. All such notices, consents, requests, claims, demands,
instructions and other communications shall be deemed to have been received on
the date of personal delivery, telex or facsimile or on the date of receipt if
mailed.
8.3 ENTIRE AGREEMENT. This Agreement and the other agreements and
documents referred to herein set forth the entire understanding of the parties
relating to the subject matter hereof and supersede all prior agreements and
understandings, whether oral or written.
8.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California regardless of the law of
choice of law, or conflicts of law, of that or any other jurisdiction.
8.5 FURTHER ASSURANCES. At any time and from time to time after the
Closing Date, at Purchaser's request and without further consideration, Seller
shall promptly execute and deliver all such further agreements, certificates,
instruments and documents and perform such further actions that the Purchaser
may reasonably request, in order to fully consummate the transactions
contemplated hereby and carry out the purposes and intent of this Agreement.
8.6 AMENDMENT; WAIVER. No attempted amendment, modification, termination,
discharge or change of this Agreement shall be valid and effective, unless the
parties shall unanimously agree in writing to such amendment. No waiver of any
provision of this Agreement shall be effective unless it is in writing and
signed by the party against whom it is asserted, and any such written waiver
shall only be applicable to the specific instance to which it relates and shall
not be deemed to be a continuing or future waiver.
8.7 SECURITY AGREEMENT. Effective as of the Closing Date, pursuant to
Section 10.1 of the Old Security Agreement, the Obligations (as such term is
defined in the Old Security Agreement) shall be deemed terminated and the Old
Security Agreement shall terminate. The New Security Agreement shall also be
deemed terminated as of the Closing Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PURCHASER:
CINERGI PICTURES
ENTERTAINMENT INC.
/s/ Warren Braverman
----------------------------------
Name: Warren Braverman
Title: Chief Financial Officer
SELLER:
DIANNE CAPLAN LEBOVITS
By: /s/ Dianne Caplan Lebovits
------------------------------
By his signature below, the undersigned (i) acknowledges that he has read,
understands and agrees to the foregoing Agreement, (ii) agrees to waive any
rights he may have to purchase the Shares pursuant to that certain letter
agreement dated April 27, 1994 between Cinergi Pictures Entertainment Inc. and
Dianne Caplan Lebovits (the "Letter Agreement"), and (iii) agrees that the
Letter Agreement and any rights of the undersigned thereunder shall hereby
terminate.
/s/ Andrew G. Vajna
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Andrew G. Vajna
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AMENDMENT
TO
RESTATED EMPLOYMENT AGREEMENT
This Amendment to Restated Employment Agreement (the "Amendment") is dated
as of January 1, 1997 by and between Cinergi Pictures Entertainment Inc., a
Delaware corporation ("Company"), and Warren Braverman (the "Executive") and is
made with reference to that certain Restated Employment Agreement between the
Company (then known as "Cinergi Productions Inc.") and Executive dated as of
January 1, 1994, as amended by that certain letter agreement, dated as of
December 16, 1994, by and between Company and Executive (as so amended, the
"Employment Agreement"). Capitalized terms used herein without definition shall
have the respective meanings assigned such terms in the Employment Agreement.
WHEREAS, Executive has been Chief Operating Officer, Executive Vice
President and Chief Financial Officer of the Company since March 1990; and
WHEREAS, during all of the period commencing from the above date, Executive
has been a loyal and dedicated officer and employee of the Company, devoting his
time and energies to the success of the Company; and
WHEREAS, Executive and the Company formalized their relationship by
entering into the Employment Agreement which expires December 31, 1997; and
WHEREAS, the Company is conducting a strategic review of the Company's
business strategy and goals, which includes discussions with third parties
regarding the sale of a partial interest in the Company or the entire Company;
and
WHEREAS, Executive possesses special skills, knowledge, abilities and
experience unique to the Company's business and possesses an intimate knowledge
of the operations of the Company which the Company deems valuable and desires to
maintain; and
WHEREAS, the Board of Directors of the Company recognizes that the
expiration of the Employment Agreement at the end of 1997, as well as the
possibility of a sale of a partial interest in the Company or the entire
Company, may raise uncertainty and questions for Executive, and may result in
the distraction of Executive to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company to foster and encourage the continued
attention and dedication of Executive to his assigned duties, without
distraction, and to secure for the Company the continued services of Executive
for an additional period of time; and
WHEREAS, the Company and Executive have mutually agreed to extend
Executive's term of employment to secure to the Company the continued valuable
services of Executive, all on the terms and conditions hereinafter set forth.
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree to amend the Employment
Agreement as follows:
1. AMENDMENT TO SECTION 1.4.1 OF THE EMPLOYMENT AGREEMENT. Section 1.4.1
of the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
1.4.1 The Term of this Agreement shall commence and this
Agreement shall be effective as of the date first written
above and shall end on December 31, 1999 unless extended or
sooner terminated in accordance with the provisions of this
Agreement (the "Term").
2. AMENDMENT TO SECTION 2.1 OF THE EMPLOYMENT AGREEMENT. Section 2.1 of
the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
2.1 FIXED ANNUAL COMPENSATION. Executive shall receive
Fixed Annual Compensation as follows: Four Hundred Sixty-
Five Thousand Dollars ($465,000) for the period from the
effective date hereof and ending December 31, 1994; Five
Hundred Eight Thousand Dollars ($508,000) for a period of
January 1, 1995 through December 31, 1995; Five Hundred
Thirty-One Thousand Dollars ($531,000) for the period of
January 1, 1996 through December 31, 1996; Five Hundred
Fifty-Six Thousand Dollars ($556,000) for the period of
January 1, 1997 through December 31, 1997; Five Hundred
Eighty-Four Thousand Dollars ($584,000) for the period of
January 1, 1998 through December 31, 1998; and Six Hundred
Thirteen Thousand Dollars ($613,000) for the period of
January 1, 1999 through December 31, 1999. Executive's
Fixed Annual Compensation shall be payable in equal
installments on Company's regular pay dates following
commencement of the Term.
3. AMENDMENT TO SECTION 3.4 OF THE EMPLOYMENT AGREEMENT. Section 3.4 of
the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
3.4 NO MITIGATION. Executive shall not be required to
mitigate the amount of any payment or benefit to Executive
provided for in Section 3.2.2 due to Company's Material
Breach (each, a "Company Breach Benefit") by seeking other
employment or otherwise, nor shall the amount of any Company
Breach Benefit be reduced by any compensation earned by
Executive as the result of employment by another employer or
by retirement benefits after the date of termination. The
Company shall not be entitled to any rights to offset,
mitigate or otherwise reduce the Company Breach Benefits
owing to Executive by virtue of Section 3.2.2 with respect
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to any rights, claims or damages that the Company or its affiliates
may have against Executive, including, without limitation, any claims
by reason of any breach or alleged breach of this Agreement by
Executive.
4. SIGNING BONUS. In order to induce Executive to enter into this
Amendment and extend the Term of the Employment Agreement for two years, the
Company hereby agrees to pay to Executive a signing bonus of $600,000 (the
"Signing Bonus") immediately upon the signing of this Amendment. Executive and
the Company agree that Executive shall use a portion of the Signing Bonus to
immediately repay in full the Executive Loan and the Second Executive Loan.
Upon payment of such loans, the Company hereby agrees to indicate in its
accounting records that such loans have been repaid in full.
5. MISCELLANEOUS.
5.1 Executive has been advised of the desirability for him to obtain
legal counsel to advise him of his rights under this Amendment. Executive
acknowledges that he has read and understands the terms of this Amendment and
that he enters into this Amendment knowingly and intelligently of his own free
will, free of any undue influence.
5.2 This Amendment shall be effective as of the date set forth above.
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making proof of the
Amendment to produce or account for more than one such counterpart.
5.3 On and after the date hereof, each reference in the Employment
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import referring to the Employment Agreement shall mean and be a reference to
the Employment Agreement as amended by this Amendment.
5.4 It is hereby agreed that, except as specifically provided herein,
this Amendment does not in any way affect or impair the terms and conditions of
the Employment Agreement, and all terms and conditions of the Employment
Agreement are to remain in full force and effect unless otherwise specifically
amended, waived or changed pursuant to the terms and conditions of this
Amendment.
5.5 Subject to Section 4.5 of the Employment Agreement, this
Amendment shall be governed by, construed and enforced and the legality and
validity of each term and condition shall be determined in accordance with the
internal, substantive laws of the State of California applicable to agreements
fully executed and performed entirely in California.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first written above.
"Company"
CINERGI PICTURES ENTERTAINMENT INC.
By: /s/ Andrew G. Vajna
----------------------------------------
Name: Andrew G. Vajna
Title: Chief Executive Officer
"Executive"
/s/ Warren Braverman
--------------------------------------------
WARREN BRAVERMAN
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